Turn seen in economy
‘If this (data) holds, this is the bottom,’ Idaho’s longtime chief economist says
BOISE – New, not-yet-published labor data show surprising and “heartening” news for Idaho, Gov. Butch Otter’s chief economist said Thursday: The state’s economy appears to have hit bottom and is ready to begin emerging from the recession.
Mike Ferguson, in an address to the Boise City Club, said the new data finally give him reason for optimism. Though Idaho’s been hit much harder than most states by the economic downturn, the new data show that the fall in the state’s nonfarm employment levels halted in October, Ferguson said, and then, from October to November, showed a slight increase.
“If this holds, this is the bottom,” Ferguson said. Bob Maynard, chief investment officer for the state’s PERSI retirement fund, who spoke after Ferguson, said, “That’s the most optimistic I’ve heard Mike in a couple of years.”
Ferguson has been the state’s chief economist for more than 25 years, serving under five governors. Maynard has headed PERSI’s $10.4 billion investment fund for 17 years.
Idaho’s been hard-hit in the recession, Ferguson said, because three employment sectors – computers and electronics, wood products, and construction – loom larger in Idaho’s total employment picture than in most states, and all fell faster in Idaho than they did nationwide.
The reasons include sharp layoffs at Micron Technology, which previously had been the state’s largest private employer, starting in 2007; an end to expansions by Albertsons, a grocery store chain that was headquartered in Boise until its buyout by SuperValu Inc. in 2006; and the collapse of Tamarack Resort in central Idaho, which had helped drive the construction sector.
Idaho’s wood products industry fell by half as a share of the state’s total employment, dropping from 1.3 percent in 2001 to 0.7 percent now. The high-tech sector dropped by two-thirds, from 3.9 percent of Idaho jobs to 1.7 percent.
Construction employment fell from 8.7 percent of Idaho’s jobs in July 2006 to 5.8 percent in July 2009. “That’s huge,” Ferguson said.
Before the downturn, Idaho had “a couple of decades of exceptional economic performance,” Ferguson said. A measure called the coincident index, which compares growth in states from 1992 to their economic peak before the downturn, ranked Idaho second in the nation, after only Nevada.
Said Ferguson, “It’s not time to pop the corks on the champagne bottles yet, but if we continue to see this decline arrested, I think we’ll be shifting from ‘When are we going to hit the bottom?’ to ‘What is the path out of this?’ ”