Economic growth in the Northwest, powered in large part by inmigration, will outstrip that for the nation as a whole for at least the next year, First Interstate Bank Senior Vice President William Conerly said Wednesday.

Conerly, the bank’s Portlandbased economist for the region, said individuals willing to accept less pay in return for a higher quality of life continue to enter the area.

The young, well-educated immigrants are finding employment with new high-tech companies that have supplanted timber and other natural resource producers as the Northwest’s economic mainstay, he said.

Knowledge-based industry has become so powerful, Conerly said, that King County has added jobs even as the Boeing Co. has laid off thousands of employees.

But Conerly warned that jobs tied to the production of computers and peripherals could be jeopardized by a downturn in business capital investment, something he said is not out of the question as the Federal Reserve Bank tries to contain inflation by raising interest rates.

And household computer purchases will slump when discretionary buying falls, he added. That would hurt one of the major growth industries in the Northwest.

“When the recession comes, we’re going to see significant layoffs,” he said.

Although an economic contraction is possible, Conerly said a slowdown from last year’s torrid expansion is more likely.

The Fed, by raising interest rates when inflation was still modest, headed off a problem that would have brought about a recession when the monetary brakes were finally applied, he said.

Conerly said he expects economic growth between 2 percent and 2.5 percent for the year, with inflation at the producer level remaining below 2 percent.

“The bond markets are pretty convinced this slow growth is in place,” he noted.