Spokane7
49°
October 28, 2009 in Business
State economist warns of second dip in recession
Cautious consumers and regional banks burdened with bad debts could trigger a second “dip” to a double-dip recession in Washington, the state’s lead economic forecaster said today.
Arun Raha, executive director of the Washington State Economic and Revenue Forecast Council, said single-family housing starts are down 75 percent from the peak of two years ago, and “multi-family is dead.”
Commercial construction has plunged, he said, and there is more downside to go. Hiring for residential building may start to recover by mid-2010, but prospects are bleak for new commercial activity before the end of next year.
Raha said another contraction in credit is possible as regional banks struggle with bad loans made to contractors.
He said manufacturing is starting to recover, but the service sector is still shedding jobs. Employers probably will not start hiring until the spring, he said.
Slow construction, poor auto sales and deflated real estate values have sapped state revenues, Raha said, he does not foresee a return to 2008 levels until 2012.
Caldwell: West Point trained local bankers to survive 
Rifleman__Dodd on October 28 at 3:11 p.m.
The first DIP was Gregoire… the second DIP is the one who sees it. Arun Raha.
Scoutster on October 28 at 4:36 p.m.
There remains 20% of home prices that have to be written off on somebody’s balance sheet.
Since you and I don’t have lobbyists in DC, I’m guessing it will be the public who eats it, probably mostly homeowners (the banks aren’t going to want it).
Double dip is probably true, with the 2nd dip being even deeper and bleaker than the first.