Industrial-Related Permanent Layoffs Increase in OC

Industrial-using companies are leading layoffs in Orange County. Aerospace, energy and manufacturing industries are among the industries with the highest layoffs in the market, according to research from JLL. While temporary layoffs still account for the majority of lost jobs in Orange County, permanent closures increased 47% in November, the greatest increase since the onset of the pandemic.

“November was interesting in that the number of industrial-using companies that recorded layoffs through EDD’s WARN system was relatively low, however, each of the layoff rounds comprised of at least 100 layoffs,” Jared Dienstag, research manager at JLL, tells GlobeSt.com. “The manufacturing and aerospace industries have been hit hard during the economic downturn. These two industries make up 75 percent of the industrial-using layoffs in November, and 59 percent of total industrial layoffs since the onset of the pandemic.”

Ecommerce activity has boomed during the pandemic, and as a result, the industrial sector overall is outperforming the rest of the market, despite the strong layoffs from some industrial-using companies. “Lack of demand for non-essential items and air travel has put strain on manufacturers and aerospace companies,” says Dienstag. “While this economic downturn is causing some industrial tenants to give back space, there is strong demand from other industries to absorb the space if the space can be usable for modern day occupiers. If the space is obsolete once the tenant vacates, then there is risk of the property sitting empty for an extended period, or until the property gets re-purposed.”

Industrial isn’t the only industry struggling through the pandemic. Overall, permanent layoffs increased in November. The layoff trends are mirroring the severity of the COVID-19 outbreak,” says Dienstag. “The second half of summer saw businesses begin to return as the pandemic numbers started to decline, which enabled layoffs to drop. However, the COVID numbers have risen during the fall and as we enter, winter, which has delayed businesses re-opening, plans. Some companies from harder hit sectors that were able to hold off on conducting layoffs earlier during the pandemic have since gone through rounds of layoffs. Even with layoffs rising in October and November, they remain far below what we saw during the first half of the pandemic. Total combined layoffs in March and April outpace May through November 4 to 1.”

The increased outbreak will also impact employment trends into next year. “Increases of COVID cases significantly impacts the jobs market while slowing down recovery efforts,” says Dienstag. “With that said, widespread distribution of the vaccine cannot come soon enough. While most of the population is not currently estimated to receive the vaccination until spring or summer 2021, the fact that it will soon be available is a great start. If this can help contain the spread of the virus, then businesses will be in better position to start to resume normal activity.”