Handicapper Sees Prosperity, Pain In City’s Future Higgins Calls For Changes To Ensure That Spokane Continues To Thrive In Future Years

Spokane will enjoy an “overall environment of gung-ho prosperity” in 1998 according to one veteran observer of the local economy.

“1998 promises to be a good year for the Spokane area, but a year which will create pockets of chaotic activity - even pain - amid an overall environment of prosperity,” Shaun O’L. Higgins told the Spokane Advertising Federation Wednesday.

But, he warned, the city will not reap the full benefits of the global economy in the 21st Century unless some critical changes are made.

Higgins, director of marketing and sales for The Spokesman-Review, and president of New Media Ventures Inc., offered his 15th annual economic forecast and demographic report to the advertising federation.

Although he is careful to note that he is an “economic handicapper” rather than a trained economist, Higgins’ annual forecast has become a staple among Spokane’s economic evaluations.

When he offered his first forecast in 1983, Higgins recalled, he looked back on 1982, a year in which “we had just witnessed the worst unemployment since World War II. Spokane County posted a 12.3 percent jobless rate that year, and we considered things good here compared to surrounding counties, some of which faced unemployment rates above 20 percent.”

By contrast, 1997 saw the jobless rate dip below 4 percent in one month, October, and hover slightly above 4 percent for the year.

The area saw non-ag wage and salary job growth of about 1.6 percent - a total of nearly 2,900 new jobs during the year.

Local business confidence is high, he said, and local consumer confidence is at record levels.

Higgins said employment will rise another 2.2 percent in 1998 with retail, construction and services being key growth elements. That growth will create about 4,000 new non-agricultural jobs, he said.

Unemployment rates, though, will creep up to 5 or 6 percent for the year.

Housing sales will be flat over 1997 figures, Higgins said, with prices increasing 2 to 3 percent.

Retail sales, which he said will have grown 5 to 6 percent when the final 1997 results are gathered, will grow another 6 to 6.5 percent in 1998.

That result is partly fueled by the explosion of retail space here, driven by the expansion of major national chains into Spokane. But, Higgins cautioned, that will produce “a furious battle for the consumers’ dollar,” and that’s where the “pockets of pain” could slip in. By the end of 1998, some companies - particularly in the consumer electronics and building supply sectors - will likely be pushed out of business, he said.

Mining will produce mixed results in 1998, Higgins said, with gold prices continuing to fall and silver prices continuing to strengthen. Wheat and lumber will be weak spots in the local economy, but tourism will continue its strong growth.

In order to sustain this overall economic performance into the 21st Century, Higgins warned that Spokane must immediately begin to address some problem areas.

“First,” he said, “we must recognize that diversity is an economic issue as well as a social justice issue.”

Higgins cited several instances of local companies having difficulty recruiting workers here because of Spokane’s reputation for being a white, conservative enclave.

The area must change this image by “showing interest and tolerance and by wooing those who are not us.”

Spokane must also address its ongoing income-gap disparity. We have more low income families and fewer high income families than most U.S. cities. He estimated the area has a $740 million lower income annually than if we were at the national average. Workers will leave Spokane for more attractive areas of employment if the issue is not addressed, he said.

He said local economic developers should formulate a strategy to exploit expansion of the copyright industries, which is the fastestgrowing sector of the U.S. economy. Movies, video games and software are at the heart of this industry.

Rochester, N.Y., he said, turns out a patent every five years for each 130 citizens in its market. For Spokane, the figure is one in 4,000. Higgins said the Spokane Intercollegiate Research and Technology Institute can play a critical role. He said economic planners should also seek the advice of local companies like Cyan - which created the popular CD-ROM games Myst and Riven - and other local successful creators of art and music and literature.

Higgins said Spokane must also stop benchmarking itself against Seattle and compare itself to cities more like us. He cited Cedar Rapids, Iowa, and Roanoke, Va., as examples. Both are geographically isolated. Neither has a major research university, both lack ethnic diversity. But both, he said, consistently outperform Spokane economically.

, DataTimes