The San Bernardino County Sun from San Bernardino, California • Page 18

Inside: Bond prices take a diveB5 Markets: Stocks and mutual Businessmoney Maria Da Varenna Bualnasa Editor (909) 386-3852 Fax (909) 885-8741 The Sun Page B8 Friday September 10, 1993 0.56 0.58 2.30 6.98 tFn(Sj? AMEX 453.38 NYSE 253.74 DOW 3589.49 NASDAQ 737.71 Area economy Dow closings last 24 days. OOOU 1 oi 3640 V'y' 3620 3600 af 3580 An Inland Empire business survey shows the area economy on a definite upswing. By John Whitehair Sun Business Writer Finally, some good news about the Inland Empire's economy has arrived. The region's purchasing managers, in a report released Thursday, said the local manufacturing sector expanded last month and they expect the area's economy to continue on an upward trend. The Inland Empire "Report on Business" duplicates the National Association of Purchasing Managers' monthly survey, which is considered a benchmark indicator of national economic trends.

of 150 purchasing managers responded. More purchasing managers will be surveyed for the next report, Farahbod said. Researchers ask purchasing managers' opinions on prices, deliveries, inventories, purchases, production and the economy. The findings in the report include: The supplier deliveries index revealed deliveries of supplies have slowed, which means an increase in economic activity. The inventory index shows that inventories are declining, a sign of an expanding economy.

It may be difficult to keep adequate inventories in the face of rising demand. The order backlog index indi- L. 3S60 The Riverside County Economic Development Agency funds the report, and the Institute of Applied Research and Policy Analysis at California State University, San Bernardino, conducts the surveys. Although the report shows the area's economy is on an upswing, Institute directors cautioned that they need several more months of data to show accurate economic trends. "Then we can predict the future direction of the area's economy," said Kamy Farahbod, an associate director of the institute.

"In terms of predictions it will be more accurate." Farahbod said the reports will be issued quarterly. In the first report, 94 FMTWTFMTWTFMTWTFMTWTFTWT 0.06 0.10 0.35 3.00 OIL BOND DOLLAR GOLD 42 GALLON 30 YEAR U.S. IN YEN NEW YORK 16.97 5.96 105.43 354.20 cated some increase in August's economic activity compared with July. The index increases in reponse to economic expansion and falls in response to economic decline. The new orders index showed possible economic expansion since nearly 48 percent of the purchasing managers reported an increase in new orders, which was more than twice the 23 percent who saw their orders contract.

The new orders increase could spur the need for additional output and could result in new jobs. The manufacturing employment index suggested that manufacturing employment remained unchanged in August. Almost 23 percent of the purchasing managers reported an increase in the number of workers and an equal percentage reported a decline. Workers comp State cuts minimum rate 7 Employers are told to pressure their insurers to reduce premiums. By Douo Willis The Associated Press SACRAMENTO State Insurance Commissioner John Garamendi lowered the state's minimum rate on workers compensation policies by 7 percent Thursday and told California employers that it's now up to them to put pressure on their insurers to cut premiums.

Garamendi's announcement implements one of the workers compensation reform bills signed in July by Gov. Pete Wilson. But Garamendi said lowering the state-mandated minimums only allows insurers to start competing on price and doesn't mandate the cuts. "Employers must ask their insurers, 'Where's my rate Garamendi told a Capitol news conference where he announced the reduced minimum rate. He said insurers should give the 7 percent reduction because other workers compensation reforms enacted by the Legislature have increased the penalties for fraud and reduced the number of claims which workers compensation insurers are paying.

"It's very clear the number of claims have gone down," Garamendi said. "The industry can afford to lower rates." The 7 percent reduction in the minimum rate is a first step toward total abolition of the minimum next year, when the second phase of the reform package enacted in June takes effect. Assemblyman Steve Peace, D-Chula Vista, principal author of the minimum rate repeal bill, said insurance companies would be wise to voluntarily take advantage of the chance to lower their rates to the new floor set by Garamendi in order to position themselves to be competitive when the minimums are eliminated next year. Those that don't, will suffer, he said. Garamendi said if every insurer reduced workers compensation rates by 7 percent, it would save California employers $600 million in the coming year.

The rollback in the minimum rate is retroactive to July 16, the day Wilson signed the workers compensation bills. LARRY ROSEThe Sun Evelyn and Frank White of Lake Arrowhead decided to remodel their home a couple of years ago and do the job themselves. They are standing in their kitchen, which was recently renovated. wis SWEET mm People who can't sell are remodeling instead ByjARED E. Bell Sun Business Writer rank and Evelyn White wanted a little interior decorating done to their home.

Business in brief Dow records a slight gain as bonds fall, rates climb The stock market managed to post modest gains Thursday, after two losing sessions, as investors focused on positive economic news and ignored rising interest rates. The Dow Jones industrial average registered minor changes most of the day and finished with an increase of 0.56 at 3,589.49. oJ Stocks rising in price outnumbered those 'declining by about 9 to 7 on the New York 'Stock Exchange. Volume on the floor of the Big Board came to 257.15 million shares, from 278.40 million on Wednesday. Wall Street shrugged off some early weakness associated with a slump in bond prices and a corresponding jump in interest rates.

LOCKHEED OFFICIAL TO RETIRE: John Dallay, director of communications for Ui Lockheed Commercial Aircraft Center at Norton Air Force Base and Lockheed Air- craft Service Co. in Ontario, said he will retire r.i next month. Dailey has been in the aerospace industry for 40 years. He has been with Lockheed for -1-25 years. Dailey said he will re-enter the area's business sector on a part-time basis after he retires.

ni BOND OFFERING PUT ON HOLD: Rohr Inc. has decided to scrap its proposed million public offering, saying the de-aonand for high-yield coupon bonds has soft-oiened. It also said the number of bonds expected -to enter the market in the next several months 0 has increased significantly, and Rohr's bond underwriters preferred to delay the offering. The Chula Vista-based firm expects to is-G sue at least $100 million by August 1994 to financial agreements. MORENO VALLEYTO REFINANCE DEBT: ft Moreno Valley city officials will refinance a 2 'multi-million dollar debt incurred to snare 3 the Moreno Valley Mall.

Rick Teichert, city finance director, said city wants to refinance its $13-milllon debt 'lobecause of current low interest rates. Half of the sales tax the city receives from '-the mall will be used to pay the debt, he said. ,3 Officials are expecting the mall to generate about $1.6 million in sales tax for the first year, Teichert said. In its first two quarters it "j(has generated about $700,000. DUO PLANS NEW VEGAS RESORT: -''Hard Rock America, which had abandoned plans to build a hotel-casino with Harrah's, said Thursday it will team with Lake Tahoe rcasino operator Harvey's for an $80 million -1 project.

01 Hard Rock founder Peter Morton said ''construction will begin later this year for the "rock music-themed resort adjacent to the company's Las Vegas restaurant. Morton said Hard Rock and Harvey' Hotel nA Casino have formed a corporation to build and operate a 12-story, 325-room resort east of the Las Vegas Strip. UB REFINERIES TO BE RETOOLED: Chevron Corp. announced plans to spend $950 million to equip its California refineries, in Richmond and El Segundo, to make clean--er-burning but costlier gasoline. The projects to make so-called "reformulated" fuel, along with a previously an-' nounced refinery upgrade at Richmond, will -create 3,000 temporary construction jobs at the peak of activity in 1995, a company spokesman said.

No new permanent jobs are expected from the investment, however. IMPLANT SETTLEMENT OFFERED: Combatants in the legal fight over the dangers of silicone breast implants say they are close to a $4.75 billion settlement that would com-j pensate women for everything from simple discomfort to disfigurement. Midland-based Dow Corning which was the largest maker of silicone gel breast implants until it stopped making them last i year, revealed the settlement offer Thursday morning. The proposal could eliminate thousands of lawsuits filed against Dow Corning and others involved in manufacturing and distribution of the implants. It would pay for checkups for women with implants, removal of the devices and for treat-1 ment of varied illnesses.

From Sun Staff and Wire Reports i Dealing with contractors Here are soma tips from the experts for people thinking about hir-; -ing a remodeling contractor: Ask friends and neighbors if they can recommend contractors with whom they've had good experiences. References can be the best way to find a reputable contractor. Interview three to five remodelers. Get references from recent customers and see if you can visit these homes. At the very least talk to the people.

Ask If the work was done on time and for the specified cost Also ask about how good the contractor was about cleaning up at the end of each day. Review a number of bids. Be skeptical of bids that are much higher or lower than the others. High bids might not mean higher quality, and a low bid may be unreallstically low, possibly resulting in overruns later on. Draft a detailed contract.

Specify when work is supposed to begin and end. You might want to negotiate a discount if work Is not completed on time, or a bonus for early completion. Detail the materials to be used. Also specify a payment schedule that compensates the contractor as work is completed. You shouldn't have to pay for the whole Job up front.

But a couple years and several renovation projects later, the Lake Arrowhead residents have embraced the nationwide trend of homeowners' investing money to remodel their homes. The recession and declining housing prices have made many Southland residents renovate their homes instead of moving. Nationwide, $103.4 billion was spent on renovations last year, up 6 percent from $97.5 billion in 1991, according to the U.S. Census Bureau. The gap between the amount of money spent on renovations and new construction has narrowed consistently since the 1980s, according to the National Association of Home Builders.

NAHB economists expect remodeling spending to exceed new construction expenditures within a dwellings and taking a loss. And Dawne Kenney of Closet World agreed, noting that 45 percent of her San Bernardino County clients in the last six months were re-See REMODELB5 few years. Russell Grance of Loma Linda's building department said that trend is evident in the Inland Empire as more residents add on to their existing homes instead of selling the Activity in Southland may remain flat until 1995 Retail sales Inland empire's retail outlook Chart lists retail sales for the last four quarters; the dollar amount of saies; ana me percent cnange rrom the same quarter a year earlier. Period Total Sala Chans: 3rd 1993 $1.16 billion 3.2 4th 1993 $1.69 billion 3.5 JASSS. $1.19 billion 6.0 2nd 1994 $1.28 billion 3.2 tosAfS tourca: Manatf amant HoHmns The outlook is more positive for the Inland Empire, where third-quarter sales may rise 3.2 percent.

By Teresa J. Gaines Sun Business Writer The sound of a cash register ringing up sales is music to the ear of any retailer. But it's not a tune that soon will be played with any frequency in the Southland, according to an area economist. Retail sales in the Los Angeles metropolitan area will be flat for the next few quarters, said Ira Kalish, economist for Management Horizons, a division of Price Waterhouse. And no significant relief is likely before 1995.

The Inland Empire's numbers look a little better, but part of that increase is because sales in the region sank so low a few years ago, he said. "Our expectation is that retail sales in the back-to-school season in Southern California will be quite weak, especially relative to the rest of the country," said Kalish, who authored the Management Horizons retail report. In the third quarter, sales of general merchandise, apparel, furniture and other items will be up 3.2 percent in the San Bernardino-Riverside area compared with a year ago. It appears that Orange County will take the biggest beating this quarter, posting a projected 4.5 percent decline in sales from a year ago, Kalish said. One reason for Orange County's sales plunge is that the area did well last year when other parts of the Southland fared poorly, he said.

Sales in the Los Angeles metropolitan area, meanwhile, will increase 1.3 percent compared with a year ago. James Padinha, an economist for First Interstate Bancorp, generally agreed with Kalish's findings. "We know a couple of things for sure," he said. "One is that Northern California will do better than Southern California. Southern California is definitely keeping the entire state in a recession." Kalish said it will be 1995 before the Southland begins to emerge from the recession because of the defense industry's demise.

"I think that the dislocative effect of the defense spending cutbacks are not yet over," he said. "Although the worst is probablybehind us, it's to take some time before that whole situation is sorted out." MONEY HOT LINE Call 900-773-C000 for stock quotas. Cost: 95 cant per mlnul..