By MARK VAN DE KAMP
NEWS-PRESS BUSINESS EDITOR

A good question for the economy is, where will the jobs be in 2004?

After all, Santa Barbara County's job market had virtually no net employment growth on the South Coast from 2001 well into 2003, economist Mark Schniepp said. Fast-growing Santa Maria added 250 jobs last year.

Job losses in manufacturing have shown a "disturbing" trend for the county, said Bill Watkins, director of the UCSB Economic Forecast Project.

Jobs in manufacturing tend to be the highest-paying in the county, he said. Instead, the area is creating jobs in retail and services, which usually pay the lowest wages.

Nationally, the extremely weak December unemployment report raised concerns that the economy could still be in the grips of a jobless recovery two years after the 2001 recession ended. And with the grim California state budget situation and high workers' compensation costs, some businesses are thinking twice about expansion.

This year and next, the bright spot in Santa Barbara County will be in the north, economists predict.

About 1,000 jobs will be created in the Santa Maria Valley, Mr. Schniepp forecasts. The bulk of those will be in service and retail jobs, and some in construction as hundreds of homes are built.

In the Santa Ynez Valley, dozens of jobs will be created by the new hotel at the Chumash Casino Resort.

The hotel is expected to open July 4. The 106-room hotel and resort will have 100 employees (25 part time). Recruiting began this month.

Turning to the South Coast, there is constant recruiting done by Cottage Health System and by Raytheon. Cottage runs three hospitals in Santa Barbara, Goleta and Solvang.

Last year, Cottage Health System hired 513 people. Its turnover rate was 16.7 percent, down from 17.5 percent in 2002.

Raytheon, which has approximately 1,950 employees, hired about 200 people last year and anticipates hiring 200 more this year, spokesman Ron Colman said. The company anticipates overall local work force will be stable.

Companies looking to increase staffing recently include Santa Barbara-based Expertcity, acquired for $225 million by Citrix Systems in December, Bargain Network, based in Goleta.

Many companies on the South Coast, however, have trouble recruiting because of high housing costs. This often prevents companies from expanding and creating more jobs, pushing figures higher for unemployment.

But the official unemployment rate for the county is lower than the state's. Santa Barbara County's unemployment rate in December rose to 4.8 percent, its highest level for that month since 1997, according to the state's Employment Development Department.

December's rate compares to 4.6 percent in November and 4.2 percent for December 2001. A total of 177,300 people in the county were employed in wage and salary jobs as of December.

While the recent rate is at a four-year high for the month of December, it still represents a fairly steady job market compared to the 8 percent unemployment rate of December 1992, when the state was coming out of a deep recession.

For the year ending in December, Santa Barbara County lost 800 jobs. In contrast, between 2000 to 2001, the county created 1,400 jobs.

Mr. Schniepp said the local region will continue to trail other areas in job creation because of the lack of affordable housing.

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