MAKE IT IN L.A "bringing manufacturing back to the industry cluster" - Los Angeles International Textile Show
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MAKE IT IN L.A.!!!
“bringing manufacturing back to
the industry cluster”
Los Angeles International Textile Show
California Market Center
March 29, 2011
Presented By: Ilse Metchek, CFA President
Outline • Los Angeles: The Fashion Center • Why Manufacturing Matters • 10 Reasons for a Positive Outlook • Trends and Challenges
LOS ANGELES: THE FASHION CENTER
Fashion Industry Value to the
Region’s Economy
2009 1997
Apparel & Textile $41.9 billion $22.8 billion
Industry
Sales/Value of $36.3 billion (L.A.)
Shipments $5.6 billion (O.C.)
Total # Employed 121,308 143,598
Apparel &
Textiles 105,953 (L.A.)
15,355 (O.C.)
Source: Calif. EDD: Bureau of Census, LAEDC November 2009Apparel Industry
Regional Employment
Los Angeles:
Employment Establishments
Core Industry Segments
Textile Mills 10,058 455
Apparel Manufacturing 64,886 3,655
Apparel Wholesaling 27,797 3,112
Noncore Industry Segments
Textile Product Mills 7,625 354
Manufacturing:Accessories 1,115 38
Independent Fashion Design 832 186
Services
SUBTOTAL 112,313 9,746
Source: Calif. NAICS Report November 2009Related Industry Segment
Employment
Related Industry Segments #Employment #Establishments
Independent Fashion Designers 1,050 1,050 (contracted consultants)
Independent Showrooms 2,771 888 (all categories)
Textile Reps 1,240 1,240 (wholesale trade agents & brokers)
Home-Based Agents/Brokers 865 517 (no office address)
Outside Services 220 55 (packaging, labeling, support)
Technology 69 22 (custom computer programming)
Fulfillment 1,100 12 (support services to imports)
Labor Compliance 130 4 (consulting services)
Equipment Leasing 240 4 (commercial rental)
Educators 750 21 (teachers and administration)
Distribution 560 6 (specialized local freight)
Related Industry Segments Totals 8,995 3,802
Grand Total - all Segments 121, 308
Source: U.S. Census Household Survey & Industry Experts’ ApproximatesDirect Employment: NYC vs. LA
Fashion Employees in NY and LA
73,822
120,822
New York City Los Angeles
Source: LAEDC, November 2010Current Employment Trend • Traditional employment is shrinking as the ranks of the self-employed grow. • Product and brand managers focus on what they do best; outsourcing other tasks; ie. design services, contracting, marketing. • Laid-off executives starting their own businesses as an alternative to employment.
Los Angeles: the Fashion Destination • New Trade Shows all the time! • Celebrity ‘star power’ creates runway fashion and consumer interest....not Paris! • Growth of Orange County’s ‘Surf Style’
WHY MANUFACTURING MATTERS… …..the ‘multiplier’ factor
Los Angeles Continues To Be The Largest
Manufacturing Center in the Country
Manufacturing Employment (000’s) By Metropolitan Region
2009, 2010
Source: California Employment Development DepartmentManufacturing Payroll Levels Are Comparable or
Better Than Other Industries
Total Employment, Annual Payroll and Per Capita Pay for L.A. County 2008
2009 Total Employment Annual Payroll (000's) Per Capita (000's)
Manufacturing 453,162 $21,131,902 $46.6
Construction 153,858 $7,304,398 $47.5
Wholesale Trade 280,991 $14,203,755 $50.5
Retail Trade 413,506 $10,825,929 $26.2
Transportation 164,246 $7,203,301 $43.9
Real estate 88,787 $4,207,585 $47.4
Education services 124,486 $4,206,231 $33.8
Healthcare 460,082 $21,293,391 $46.3
Accommodation / food
services 354,147 $6,181,399 $17.5
Source: 2009 County Business PatternsMade in America
By Region
“When you see an ad emphasizing
that a product is “Made in America,” are you….”
Likely to Buy Region (% of Group)
East Midwest South West
More Likely to Buy it 60% 67% 61% 57%
Neither more nor less 3 2 4 5
likely to buy it
(Balance…no opinion)
Source: Harris Interactive (July 2010), October 2010Made in America
By Age
(% of All U.S. Adults… “When you see an ad emphasizing
that a product is “Made in America,” are you….”)
Likely to Buy 2009 2010 Age (% of Group)
18-34 35-44 44-54 55+
More Likely to Buy it 59% 61% 44% 61% 66% 75%
Neither more nor less 37 35 52 37 30 22
likely to buy it
Source: Harris Interactive (July 2010), October 2010The Multiplier Factor –
What a manufacturing plant means to LA
• Direct Jobs
• Indirect Jobs
• Induced Jobs
Source: CD Tech analysis, November 2010)Direct Jobs Direct jobs are held by the employees who work at the manufacturer.
Indirect Jobs Indirect jobs are sustained by purchases of goods and services by the firm to produce a final product.
Induced Jobs Induced jobs are generated by the spending of employees whose wages are sustained by both direct and indirect spending.
Ex: Apparel Manufacturer A firm specializing in Domestic Production of Apparel in LA County has 100 workers. These are the direct jobs!
The Multiplier:
100 direct jobs create
33 indirect jobs in LA County
8 Administrative Services
8 Professional and Technical Services
7
Management of companies
4
3 Contract Manufacturing
3 Wholesale Suppliers
8 All Other Sectors
These are the indirect jobs!The Multiplier:
100 direct jobs create:
27 induced jobs in LA County
6 Health and Social Services
5 Retail trade
3 Food Services
3 Other services, ex: dry cleaning, delivery, etc.
2 Finance & Insurance
8 All Other Sectors
These are the induced jobs!Total Employment 100 direct jobs 33 indirect jobs 160 jobs 27 induced jobs
Multiplier Impact in Selected Industry Sectors
Industry Direct Indirect Induced Total
General Merchandise Stores 100 9 13 122
Ornamental & Architectural Metal Mfg 100 36 32 168
Bread and Bakery Product Mfg 100 33 27 160
Upholstered Household Furniture Mfg 100 19 20 139
Women’s Cut and Sew Apparel Mfg 100 113 46 25910 REASONS FOR A POSITIVE OUTLOOK
#1 - The Internet
• The manufacturing sector specializes
in smaller Lots, and quicker turns - a
requirement for internet suppliers.
• Successful Los Angeles internet sites
include: Hautelook.com,
Billion Dollar Babes.com
Shape.com.#2 - Global Trade • 46% of all duties paid to U.S. Customs comes from importation of Apparel and Textiles • Apparel and Textiles together are the 2nd largest commodity sector coming through the Ports of L.A. (after automobiles)
#3 - Global Demographics
• As the major port of the Pacific Rim, the region
has access to both developed and
underdeveloped markets for exports AND
imports:
China
Vietnam
Australia
Korea#4 - Global Connections • LA’s Pacific Rim location is closest to growth of Asian middle class • No Other City has the ethnic Diversity of Los Angeles
Diversity of Cultures
Los Angeles County is the largest county in the nation, with one of the most
most Diverse populations in the world.
Born Outside U.S.
36% of total population were born outside the United States.
Approximately 3.5 million Los Angeles County residents
Group Number Percent
Asian 824,416 66%
Latino 2,085,813 49%
Pacific Islanders 42,888 26%
Non-Hispanic White 499,036 16%
Non-Hispanic Black 61,515 6%
Total Population – Foreign Born 3,449,444 36%
Total Population LA County: 9,581,788#5 - Domestic Demographics The multi-ethnic mix keeps ‘new’ ideas coming from every culture: Witness the ‘army’ of ethnic food trucks……………only in L.A.
#5 – Intramural Competition
California Registration Report
for Manufacturers and Contractors:
(State Labor Code Requirement)
Year # Registered
2008 4,300
2009 4,805
….an increase of 6.3%
Newcomers Keep the Established „Players‟ Sharp#7 – Entrepreneurial Abundance
L.A.’s Manufacturing Businesses Are Dominated
By Small and Mid-Sized Companies
Total Business Establishments for L.A. County 2008: 14,772
Source: 2008 County Business Patterns#8 – Diverse Financial Community
• A significant field of specialists:
Factors: CIT, Merchants, Millberg, etc.
Banks: Wells Fargo, City National
Union Bank, Manufacturers Bank
Hamni, Hana, Leumi, East West, etc#9 – Education • 19 Southern California Higher Educational Institutions with Fashion Degree Courses. …..all with full enrollment • Too much talent to do anything but succeed
#10 – Government Intervention…
0r Lack of it
• No Help might be the BEST help of allTRENDS AND CHALLENGES
Manufacturing Sector Patterns “Manufacturing merits attention due to relatively high pay—the average salary is above the average for all industries. Domestic Apparel manufacturing has a high multiplier.” “While job losses continue to mount in the manufacturing sector, there are opportunities for some industries like apparel / textiles and food processing. (Source: CD Tech Conference, November 2010)
Manufacturing Challenges • Strong competitive pressures from offshore production. • Investment in equipment, technological upgrades, and workforce training, are opportunity areas to grow the sector.
Education for the Future •Entrepreneurial opportunity is the growth pattern for California. •This ever-changing global business requires well trained creative individuals who understand the process of bringing product to consumers.
The California Fashion Association (CFA) is the
Business-to-business forum for California's
Apparel and Textile Industries.
Please visit our website:
www.CaliforniaFashionAssociation.org
Email: info@calfashion.orgYou can also read
