The adult entertainment industry is producing fewer films in Los Angeles, likely due to a mandatory condom use law among performers.

Permits for pornography productions have dropped a staggering 90 percent from 2012, down to 40 in the last year. According to data from FilmLA Inc, a nonprofit group that handles filming permits for the Los Angeles area, 2014 has only had 20 permits issued so far.

"We've seen a dramatic drop in permits," President of FilmLA Paul Audley said. "It is a cause for concern that people who are manning the cameras, lights and other things on those sets are not working anymore .... It's not helpful to have another segment of the industry leave the region."

The entertainment industry at large has been hit by other major cities and states offering tax breaks for film crews. California is also in the midst of one of the state's highest unemployment rates. Declining DVD sales and free porn available online have also caused porn companies to downsize.

Although some crews may be shooting footage illegally without a permit, X-rated movie producers are taking their business outside of L.A. to places like Nevada, Florida and Europe.

"We're not shooting in L.A. anymore," Steven Hirsch, founder and co-chairman of Vivid Entertainment said. "We'd like to stay here. This is our home, where we've produced for the last 30 years. But if we're forced to move, we will."

Penthouse Entertainment, a company that creates 80 titles a year and owns 10 television channels, said they have ended all local filming.

"This month we're shooting 10 movies in Brazil," managing director for Penthouse Entertainment, Kelly Holland said. "Last month, we shot five movies in Europe. It's just too complex to shoot here."

The San Fernando Valley, where much of the filming takes places, has suffered from the decline. And while these porn productions only contribute less than 5 percent of all film permits, the local economy gained between 10,000 and 20,000 jobs annually and had $4 billion in annual sales.

"Losing an industry like that is going to have hugely negative consequences," Stuart Waldman, president of the Valley Industry and Commerce Association, said. "We're not just talking about actors or the filmmakers, but everyone from the grips and caterers to assistants. These are people who live in the San Fernando Valley, buy homes, cars, send their kids to school and go to the dry cleaners. If they move, all the money goes with them."