Washington’s top economic forecaster Wednesday said the recession is over, for now.
Arun Raha, executive director of the Washington state Economic and Revenue Forecast Council, said a potential second “dip” is possible if consumers remain cautious and regional banks burdened with real estate and development debt cannot provide enough credit to support renewed economic growth.
Working for the state is its longtime position as a leading exporter, he said.
In the past, Raha said, foreign economies trailed the United States during an economic recovery. Thanks to global stimulus efforts, other economies are growing in sync with the U.S., which should boost Washington export sales unusually quickly, he said.
“We will out-perform the country,” he said.
But his forecast for state revenues was downbeat, as it has been since the recession’s outset.
Raha said he does not expect general-fund revenues to return to 2008 levels until 2012.
Depressed retail, auto and home sales have significantly reduced sales tax and excise tax proceeds, he said, and property tax collections are growing at less than half the pace of 2005.
He said single-family housing starts are down 75 percent from the peak two years ago, and “multifamily is dead.”
Commercial construction has plunged, he said, and there are more losses ahead.
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.
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, but unemployment rates will likely remain high as renewed hiring coaxes workers who have been on the sideline back into the labor market.