Slow economic growth expected in Spokane region, experts say
A longtime regional economic forecaster on Wednesday told Spokane business leaders they should learn a lesson from long-suffering fans of the Chicago Cubs baseball team.
“For Cubs fans, it’s always ‘wait until next year,’ ” said John Mitchell, speaking to several hundred people at the annual Greater Spokane Incorporated economic forecast.
“That’s what economists have had to say the past three years, as they dealt with a slow recovery,” Mitchell said.
“The economy is growing,” Mitchell said, “but not as quickly as it has after earlier downturns.”
Mitchell – a Portland consultant well-known for ending his presentations with a poetic year-in-review – said the recovery since 2010 has been “a sluggish upturn,” and next year will be more of the same.
Mitchell was followed by Grant Forsyth, Avista’s chief economist. He agreed with Mitchell that 2014 will be a year of modest job gains, increased consumer spending and continued recovery in the housing market.
Both also said the continuing politicized budget battles in Washington. D.C., contribute to a cloud of uncertainty that deters business planning. Mitchell said the wrangling over the Affordable Care Act is a second layer of uncertainty.
Forsyth cited a recent survey that found that policy uncertainty – partisan battles over taxes and federal spending limits – has increased unemployment.
The study, published by the Federal Reserve Bank of San Francisco, said unemployment would be 6.5 percent at the end of 2012, instead of 7.9 percent, if the federal policy picture weren’t muddied.
Spokane and Kootenai counties, when taken together, enjoyed a 2 percent projected growth in total jobs in 2013. But 2014 won’t match that total, Forsyth said.
“I see only a growth of about 1.5 percent” in employment for 2014, he said. Much of that slowdown comes from construction companies not matching their big job growth during 2012, he said.
Forsyth said one worrisome warning sign for the local economy is a decline in average wages.
Adjusting for inflation, Forsyth said Spokane County’s average wage in 2012 grew by 1 percent. But in the first quarter of 2013, average wages here fell 0.5 percent.
Average wages in Kootenai County during 2012 fell 0.3 percent and were flat for the first quarter of 2013.
Employers in the local labor market have enough workers to choose from, eliminating in most sectors the usual pressure to increase wages when competing for good employees, Forsyth said.
The positive signs for the local economy are continued consumer spending and another expected year of housing recovery, Forsyth said.
Taxable sales in Spokane County are running well above the growth in household income, he said.
“And I expect housing growth to continue, largely because lenders will remain optimistic about the future,” Forsyth said.