SAN FRANCISCO — Despite this week’s downgrade of the rail corridor that connects them to the nation, the ports of Long Beach and Los Angeles are beginning to show signs of growth again, adding to evidence that the Great Recession is easing, analysts, economist and port officials say.

In December, traffic rose at both the Los Angeles Harbor Department and the Port of Long Beach, the two busiest U.S. container ports, the first time both posted positive numbers in the same month since early 2007.

Analysts say shipping volumes are still way below the boom years of the middle of the last decade, and it could take four or five years for business to return to its previous peak. But the worst seems to be over for America’s gateway to trade with Asia.

“We’ve definitely hit bottom,” said John Husing, an economist with Economics & Politics Inc. who has been studying the Southern California economy and the trade patterns for more than four decades. “The question is how far and how fast” the recovery will go.

The recovery didn’t come soon enough to spare the Alameda Corridor Transportation Authority a credit hit, as Moody’s Investors Service downgraded the rail agency’s senior and subordinate debt this week. The Carson, Calif.-based joint-powers authority owns and operates the 20-mile rail freight corridor that links the two ports to downtown Los Angeles and the U.S. rail network.

Moody’s downgraded $965.8 million of senior-lien revenue bonds to A3 from A2 and $738.5 million of subordinate-lien bonds to Baa1 from A3. The agency put the ratings on watch list for possible further downgrade, citing a slowdown in traffic and declining debt-service coverage ratios.

But Moody’s analyst Baye Larsen said she agrees that the port complex is starting to see a pickup.

“The downgrade [of ACTA] largely reflected cargo declines that already occurred and resulting declines in coverage,” Larsen said in an interview. “There are some signs of recovery for both the ports of L.A. and Long Beach.”

Long Beach suffered a 22% drop in container traffic in 2009. Business slowed sharply in November 2008, as retailers realized the impact of the bankruptcy of Lehman Brothers on the U.S. economy. From its peak in 2007, Long Beach’s traffic fell 31% through 2009.

But business picked up at the end of the year. Container traffic rose 8.7% from a year earlier in December, the first year-over-year gain since December 2007.

“I believe the rebound has started and that the worst is behind us,” Port of Long Beach executive director Richard D. Steinke said in a “state of the port” speech last week. “In the last couple of months, we have seen definite reasons to be cautiously optimistic.”

He said exports were up by 30% in December, while imports rose 13%. The only category of container traffic to decrease was empty containers.

The improvement was less pronounced in Los Angeles, where declines have been smaller. Container traffic fell 14% for all of 2009 and was 20% lower than its 2006 peak. But the bigger port by volume eked out a year-over-year gain of 0.4% in December, its first year-over-year gain since August 2008.

December was the first month that both Los Angeles and Long Beach posted positive year-over-year results since February 2007.

Exports were particularly strong. The number of loaded, outbound containers from Los Angeles rose 40%, while the number of empty outbound containers fell 20%.

In recent years, the port has shipped many more empty containers than full containers to Asia because of the trade imbalance between the U.S. and China. But U.S. exports are surging on the weak dollar.

The number of full containers leaving the Los Angeles harbor outstripped empty containers by 28% in December. While the number of outbound full export containers is still well below the number of full import containers, the gap is narrowing.

“The spike in loaded outbound containers was a nice way to put a tough year behind us,” Port of Los Angeles executive director Geraldine Katz said in a statement. “We are cautiously optimistic about 2010, hoping that consumer confidence will start improving inbound volumes and the market recovery overseas will continue to drive our export volumes.”

A July forecast by the Tioga Group Inc. and HIS Global Insight predicted a growth of more than 4% in traffic at Long Beach and Los Angeles this year. That’s below long-term trends, but an improvement from the declines of 2008 and 2009. The two ports paid for the study.

The ports seem to have escaped the recession with their double-A ratings from all three credit rating agencies intact. Both are rated AA by Standard & Poor’s and Fitch Ratings and Aa2 by Moody’s.

“They’re both just very financially strong,” said Seth Lehman, a Fitch analyst in New York. His agency has a negative outlook on the port sector, but the Southern California ports built up big reserves during the years that traffic boomed, when they were straining to keep up with growth in trade with China.

“The downturn has given a number of the ports a breather,” Lehman said. “Ports have been holding back a bit over the last year to two years, and I expect that they’ll resume capital spending as the growth returns.”

The resumption of growth is largely being driven by the inventory cycle at U.S. retailers, according to Husing, the Southern California economis.

“Clearly, the national retailers kept their inventories cut to the absolute bare bones this last Christmas,” he said. “Now that Christmas is over, they’re having to restock their shelves.”

Many of the goods flowing to American mass merchandisers such as Wal-Mart Stores Inc. and Target Corp. flow through Southern California’s ports en route from China. 

“I can tell you just by watching the trains go down the canyon where I live that the inventory cycle is alive and well,” said Husing, who lives near one of Union Pacific Corp.’s main West Coast shipping routes. “As long as we have inventory replenishment, we’re going to be seeing an upswing.”

But port watchers cautioned that they expect only slow improvement.

“We expect this to be a protracted recovery,” said Moody’s Larsen.

Husing said a full recovery to 2006 traffic levels would take until 2014 or 2015. IHS Global Insight and the Tioga Group predicted that the ports would fully recover lost ground by 2013.

“We’re nowhere near normal,” he said.

Husing said the recovery will be weak because of slow growth in consumer spending in the U.S. He said the country’s auto and housing sectors — traditionally leaders of economic recoveries and big contributors to the boom in Southern California imports in the last decade — are both in for slow recoveries.

“There was a big loss in ’08 and an even bigger one in ’09,” he said. “So we’ve got a lot of coming back to do.”

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