Economic Prospects Mixed City Consumers Wary Despite Job, Wage Gains, Forecaster Says

Continued population and job growth, and an increase in wages relative to inflation and housing costs, will bless Spokane’s economy in 1996, but retail sales may again impose a puzzling drag on local prosperity.

That’s the prediction local economic handicapper Shaun O’L. Higgins offered Wednesday to the Spokane Advertising Federation in his 13th Annual Local and Regional Economic Facts and Forecast.

Although Spokane is on a five-year roll of improving employment, increased personal income, higher property values, job growth and population growth, consumers are oddly pessimistic, Higgins said, in their assessment of Spokane’s past and future economic performance relative to the national economy.

Even more puzzling, though, Higgins said, are results of a local consumer confidence survey showing that Spokane citizens have felt consistently better off each quarter since the survey began in 1993.

“This presents a confusing view of current and future consumer behavior in the market,” Higgins said. “Incomes are rising. Jobs are increasing significantly. Inflation is in check and consumers feel significantly better off.

“And yet consumers are not spending in conditions in which they should be spending.”

Higgins, who is the director of marketing and sales for The Spokesman-Review and president of New Media Ventures Inc., said the unwillingness to spend put a significant blemish on Spokane’s 1995 economic performance.

At the start of 1995, Higgins and many other local economic observers predicted retail sales growth of 9 to 11 percent for the year. The reality, he said, will be 2 percent or less once figures for the third and fourth quarters are in.

Job growth, which he predicted to be 3,200 to 3,700, was actually 4,500.

One answer to the reluctance to spend, he suggested, may be consumers’ decision to pay off some of the debt they have been amassing over the past three years.

In 1996, Higgins believes, consumers will overcome their spending jitters by the second quarter, and by year end will have increased retail sales by 6 percent over 1995’s performance.

But he thinks the retail industry needs to focus on improving that figure by a marketing effort aimed at promoting shopping events in Spokane, “a Bloomsday for shoppers.”

“We must become more competitive and more aggressive in once more attracting shoppers from Canada, where traffic is down significantly,” Higgins said.

The second area Higgins urged the community to focus on is attracting higher quality jobs that will help close the gap between Spokane’s median salary level, and that of the state, which is 20 percent higher.

, DataTimes