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HEADLONG RUSH OUT OF AILING, FLAILING CALIFORNIA WILL SLOW OR REVERSE AS ITS ECONOMY REVIVES

SHARE HEADLONG RUSH OUT OF AILING, FLAILING CALIFORNIA WILL SLOW OR REVERSE AS ITS ECONOMY REVIVES

For the past four years, the state's nagging recession has produced a steadily increasing migration of Californians to other Western states, helping fuel booms in their economies and populations.

But now, with the long-suffering California economy finally turning around, that trend will slow or reverse itself, a new report from the Federal Reserve Bank of San Francisco says, helping key industries recover here while slowing economies in Nevada, the Northwest and Rocky Mountain states.Another forecast takes the conclusion by Fed economist Joe Mattey even further.

By 1996 or 1997, California - which has been losing more than 100,000 people net to other states each year since 1991 - could see a net increase of 150,000 to 200,000 residents from other states annually, says David Hensley of Salomon Brothers securities in New York.

That reversal may please not-in-my-back-yarders in nearby states inundated with California refugees so far in the 1990s.

"Their response is `Great! Let's have that happen,"' Hensley said.

But he says some will get a rude shock as growth-sensitive businesses - notably home building, financial institutions and retailing - feel a pinch from the slowing in California migration.

In their new states, ex-Californians have been stimulating the economies by spending the proceeds from their home sales and new jobs on housing, furnishings and consumable products.

Now, "employment growth is likely to be restrained noticeably in Idaho, Nevada, Oregon and Washington," concludes Mattey's report.

The conclusion isn't as obvious as it might seem. It assumes that economics is the main driving force behind the California exodus. A minority view contends that quality of life and social conditions also are major factors.

But the economists say that the cycles of previous migrations from California and elsewhere show that financial circumstances - and specifically the availability of jobs - have driven the population ebbs and flows.

California has a population and economy much larger than any nearby state. So any reversal of migration patterns will have a smaller impact on California than the outflow has had on states such as Nevada and Idaho.

Still, Hensley notes, net immigration to California of 150,000 to 200,000 people from other states would not be negligible.

"That's almost 60,000 households," he said. "That would make a hell of an impact on the construction industry. It'll be very noticeable in financial institutions, the retailers and the home builders. It'll help firm up house prices and rents."

Since 1990, California's population has grown to more than 32 million from less than 30 million because of foreign immigration and births.

But after decades of attracting people from other states as well, California has been exporting many more residents than it has been importing. From 1990 to early 1993, the state showed a net loss of 381,000 people to other states, Mattey concludes from Internal Revenue Service data.

For the 12 months ended in June, more than 600,000 Californians moved out, compared with 413,000 residents of other states who moved in, according to state government estimates.

According to the UCLA Business Forecast Project, Southern California lost residents at more than double the rate of Northern California during that time.

"It would appear that even Northern California had some out-migration, 1989-92, from black and white households," said demographer Nancy Bolton of UCLA. "There was out-migration at a much higher level than I had thought."

Nearby Washington, Oregon and Nevada received the largest numbers of Californians. Recent immigrants from California numbered about 5 percent of Nevada's 1990 population, and accounted for more than half the growth in the state's labor supply, Mattey estimates.