The sharp reduction in production following this year's labor scare could continue through the fourth quarter, already having reduced entertainment industry employment in Southern California by 14,500 jobs from a December 2000 peak of 263,000 workers, according to a study being released today.
The Mid-Year Update from the Los Angeles County Economic Development Corporation predicts the nation, California and Southern California narrowly will avoid a recession in 2001 but see growth drop sharply because of the tech downturn, energy crisis and a slowdown in sectors including motion picture production.
"There will be a slow economic climb-out in 2002," LAEDC chief economist Jack Kyser said. "You have the studios working off their inventory and also the problems with advertising spending dropping dramatically."
Hollywood dodged a bullet when studios reached new, strike-averting contracts with writers and actors, but challenges persist beyond the slowdown induced by the first-quarter production frenzy, according to the report.
Production will suffer from the nationwide slump in advertising spending, cost savings efforts that take television and movie production to Canada and other foreign locales and increasing network reliance on nonscripted "reality" programming, the report concludes.
Owing to these factors, entertainment employment in the Los Angeles region will likely stay the same as last year, at 135,000 jobs. Across the whole state of California, the entertainment industry is expected to add just 300 jobs, raising the average to 149,800. Kyser said these figures were based on data from the state employment department, which tends to understate the number of people actually working in the entertainment industry.
By its adjusted count, LAEDC estimates 263,000 people worked in entertainment in Southern California in December last year. That number has fallen to 248,500.
The report said another labor showdown looms in July 2002 when the Directors Guild of America's contract expires.
The report forecasts that the 2001 boxoffice will increase 8.5% to $8.31 billion.
Jesse Hiestand writes for The Hollywood Reporter