Southern California, known as the entertainment capital of the world, may face an economic slowdown in coming years due to the ongoing housing slump and anticipated labor problems in the entertainment industry, according to a forecast released Wednesday.

The report by the Los Angeles County Economic Development Corp., a nonprofit business support group, said economic growth in the region will be "slightly slower but still solid" this year, noting that six of the region's industries, including aerospace, biomedicine and tourism, have good growth prospects.

But the group's chief economist Jack Kyser said that the housing market in Southern California would be a drag on economic growth, and the region's two signature industries, entertainment and international trade, could also encounter some rough going.

The two-year forecast identifies film and television production as the most notable of the industries at risk, due to Hollywood's upcoming contract negotiations with three key labor unions: the Writers Guild of America in October and both the Screen Actors Guild and the Directors Guild of America in June 2008.

The report also noted that the entertainment industry faced challenges from the outsourcing of production to cheaper venues abroad, as well as the proliferation of content distribution options.

Meanwhile, international trade also faces risks because a federal law expected to take effect this year will require that all transportation workers have certain credentials.

There are about 20 to 30 percent of the area's truck drivers believed to be undocumented, Kyser said, adding that such a law would lead to an overall short supply of truck drivers at local ports.

A 10-year forecast for the Southern California region released last week by the Center for Continuing Study of the California Economy in Palo Alto identified several of the same industries as vibrant growth engines, including trade, professional services and tourism.

But the center, like the latest report, expressed concern that growth would be hampered by quality-of-life problems that have plagued the region for years, including traffic congestion, poor- performing schools and a shortage of affordable housing.

Source: Xinhua