In January 2006, Orange, Calif.-based Chapman University — home of the newly created Roger C. Hobbs Institute for Real Estate, Law and Environmental Studies — issued its California manufacturing index, which showed that the state's manufacturing sector has outperformed the nation for six consecutive quarters, led by high-tech productivity and employment. In California, high-tech industries represent 26.3 percent of the manufacturing sector, says the report, while they represent only 12.6 percent of manufacturing employment nationally.
   Other economic forecasts issued by the center point to both promising and distressing trends in the Inland Empire, Orange County and L.A. communities.
   In the Inland Empire, while job growth has slowed from a torrid 4.6-percent pace in 2004, the center projects 2.1-percent job growth in 2006, led by trade, transportation, utilities and services. Total residential and nonresidential building permit valuation is also expected to slow, but still total a whopping $12.4 billion.
   In Orange County, where construction jobs ballooned by more than 50 percent over the past seven years, a residential slowdown is in order. Thankfully for most, the slowing trend extends to affordability, in a county where it takes 50 percent of a family's income to make a mortgage payment. Housing appreciation is expected to dip from 10.3 percent in 2005 to -4.2 percent in 2006.
   A survey of 2,500 Californians last year by the Public Policy Institute of California found that nearly a third of residents under 35 said the cost of housing was making them consider moving to a less expensive area — two-thirds said they were thinking of leaving the state.
   Over the past four years, payroll employment in Los Angeles County has fallen by 0.8 percent even as the state total grew by 1.7 percent and Orange Co. grew by 5.8 percent. Manufacturing employment in L.A. County during that period fell by 17.1 percent, or 98,000 jobs.
   Another study of the L.A. economy, released in December 2005 by the Milken Institute, in large measure corroborates a similar study conducted by the Los Angeles Economic Development Corp. last year, effectively giving credit for the area's economic staying power to the thousands of small businesses created in the wake of major manufacturers' departures.
   "The City of Los Angeles is a city of tremendous resilience, best described as an economy with a core in large business and a future in small business," the study states. "At the same time, the city also remains polarized between high-end and low-end jobs. It suffers from a labor force that is disproportionately unskilled."
   The institute calls for increased training efforts; it recommends targeting that training toward sectors like residential building construction, financial services, motion pictures and hospitals. One aid in picking up the slack, says the report, would be better use of the research capabilities at the University of Southern California (USC) and the University of California-Los Angeles (UCLA).
   The latter institution is now seeing funding from the state, the Semiconductor Industry Association and Intel for its Western Institute of Nanoelectronics, which will ramp up in 2006 with initial grants of $18.2 million.