For industries nationwide, recovery from the coronavirus pandemic is a “tale of two economies,” said Steve Scranton, chief investment officer and economist for Washington Trust Bank.
Scranton spoke Friday at a Greater Spokane Incorporated virtual event that was attended by 220 people.
In his “macro view” of the economy, he said those who can work remotely and those businesses in manufacturing and construction likely will fare well.
“In fact, it might even be going great for you,” Scranton said. “But, if you are in a job where you actually have to be on site, be able to serve your customers, you’re saying this still is not a good situation and when is it going to get better?”
Spokane and Coeur d’Alene both made significant progress in workforce recovery, but the cities differ in stages of regaining jobs, Scranton said.
Coeur d’Alene recovered 102.9% of its jobs in February, compared to February 2020, in part because Idaho reopened businesses faster than Washington following coronavirus-related shutdowns, Scranton said.
Spokane recovered 94.5% of jobs lost due to the pandemic in February, compared with February 2020.
Construction, education and health services, and professional and business services led job recovery in February in Spokane, Scranton said.
Leisure and hospitality continues to struggle with job recovery and that’s occurring nationwide. In Spokane, the leisure and hospitality sector regained 73% of its jobs in February compared to the same time last year, he said.
“So that’s where it’s really critical, again, the sooner we can lift restrictions, we’ll see more recovery in the leisure and hospitality sector,” he said. “But really until we fully lift them, we won’t know what the full story is there.
“We won’t know the final damage, what type of scarring has happened to our economy, both in Spokane, the state of Washington and the U.S. as a whole, until we fully lift the restrictions and we discover how many of those closed doors were temporary and reopened or were permanently closed.”
Scranton predicts short-term interest rates will remain low and long-term rates will be volatile.
Remote workers will be a boon for Spokane’s economy and tax base long term. Although the recent influx of new residents has increased demand on the region’s housing market, the surge is expected to be temporary, Scranton said.
“I think that it’s going to be a stress on our infrastructure for the near term,” Scranton said, referring to the area’s population increase. “But long term, I think that it’s very positive for Spokane to have a bigger population, and a more diversified population for jobs and everything else.”
The national economy is set to surge in 2021 due to federal spending that’s occurring and businesses reopening, Scranton said, adding the economy could level off in 2022, depending on what occurs with President Biden’s infrastructure plan.
“I think we should all enjoy it, benefit from it,” Scranton said, referring to this year’s potential economic growth. “But don’t plan for that to be the norm. Plan for the two to three percent type of growth.”
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