Economists give region pat on back
If the economy looks a little soft in the Inland Northwest, remember how far the region has come, two economists said Friday.
Employment registered a normal winter downturn, said Washington Trust Senior Vice President Steve Scranton, but weigh those losses – some of which were recovered in March – against the 22,000 jobs added in the last five years.
Year-over-year job growth as of March was 5.7 percent in Coeur d’Alene, second best in the nation, he said. Spokane was 153rd with a 0.7 percent gain.
While the nation eked out a 0.35 percent advance over the same period, Scranton added, Washington’s increase was 1.7 percent. Idaho, with job losses in Boise, inched ahead 0.1 percent.
“It’s kind of hard to have a recession if you are adding jobs,” he said.
Scranton said housing prices are off about 3 percent after a 50 percent jump – $133,000 to $201,000 – since March 2003. In the truly hard-hit markets, prices have fallen 30 percent, he said.
He said economic stability will depend on how the nation’s major financial institutions recover their footing after billions in losses, and whether spillover fear and uncertainty does not brake the broader economy. Most Northwest banks avoided lending practices now haunting investment banks, he said.
The next two years will be tough, Scranton predicted, with consumers demanding more value for their dollar, and tight margins for business as a result. Surviving businesses will emerge with a bigger piece of the markets, he said.
Avista Corp. economist Randy Barcus also sees 2008 and 2009 as aberrations nationally and locally.
Economic growth, employment and housing starts should return to more traditional levels by 2010, he said.
The Spokane housing market, Barcus predicted, will strengthen as those in the Southwest rebound, allowing would-be immigrants to the Northwest to liquidate their home equity and move. Vacant properties in markets like Las Vegas will sell faster than some foresee because outside investors, including foreigners, will snap up what they perceive to be bargains, he said.
Construction and population growth in the area will remain above average, with the housing mix shifting to more multifamily as more choose the flexibility of renting, he said.
Barcus was not optimistic on energy prices, charting only minor easing in oil prices over the next few years.
Both economists predicted consumers will spend their tax rebates despite surveys that indicate they will save the money, or use it to pay down debt.