Asian Crisis May Hurt California
LOS ANGELES (AP) _ The financial crisis that has spread through Asia is expected to hit California next year and slow growth in the state’s rebounding economy, with export businesses and the tourism industry bearing the brunt of it.
``It’s going to be a foot on the brake,″ said Jack Kyser, chief economist for the Los Angeles Economic Development Corp. ``The longer Asia’s problems go on, the heavier the foot.″
Kyser sharply revised his forecast for California exports, among other economic indicators, after watching South Korea fall into turmoil in recent weeks. In his upcoming annual report, Kyser now writes that California exports will slow markedly next year, from a growth rate of 9 percent this year to just 1 percent.
In several reports to be released this week, economists at UCLA and other universities, the economic development panel and other private and public organizations agree California will be hit on the export side. Tourism, transportation, agriculture and engineering services are all expected to feel the pinch from Asia’s troubles.
``We expect weaker exports to Asia of computers and related machinery ... and other goods and services to produce slower growth, rather than declines in those industries since the domestic market will remain robust,″ said Tom K. Lieser, associate director of the Business Forecasting Project at UCLA’s Anderson School.
In UCLA’s widely followed quarterly forecast, to be released today, Lieser said the ``cracks in the Pacific Rim will cause leaks in California,″ particularly in Silicon Valley, with its high concentration of electronics manufacturing.