Transcript Slide 1

The Economy:
What’s Happening in the Inland
Northwest
and When Will It Be Better?
An Economic Overview and Forecast for 2009
by
SHAUN O’L. HIGGINS
Director, Sales & Marketing, The Spokesman-Review
Spokane Valley Chamber of Commerce
Mirabeau Park Hotel
Spokane Valley, Washington
February 11, 2009
Order of the Presentation
Perspective on the Present Situation
*
A Changing Market: Psychographics and “Animal
Spirits”
*
A Look at Jobs, Income and Housing Trends
in the Inland Northwest
*
2009 Regional Economic Forecast
“ Where angels fear to tread…”
Caveats and Disclosures
I’m a handicapper, not a formally trained economist. . .
I do, however, hang out with economists and try to keep up
with the literature!
Listen for “qualifying phrases. I’ll try to signal the most
important ones.
The accuracy/inaccuracy of previous forecasts doesn’t mean a
thing!
My opinions do not necessarily reflect those of Cowles
Company or The Spokesman-Review.
The presentation will last about 25 minutes. There may be
time for a few questions at the end.
Sources and Acknowledgments
The Economist
The Financial Times
The Kiplinger Washington Letter
Marple’s Business Newsletter
The Spokesman-Review
The Pacific Northwest Inlander
Puget Sound Business Journal
The Spokane Journal of Business
U.S. Census Bureau
U.S. Conference of Mayors
Belden & Associates
Spokane Regional Convention & Visitors Bureau
Greater Spokane, Incorporated
Sources and Acknowledgments
Washington State Employment Security, Labor Market & Economic Analysis
Branch
Blue Chip Job Growth Update ,Seidman Center, Carey School of Business,
Arizona State University
Office of Federal Housing Enterprise Oversight
Bureau of Economic Analysis, U.S. Department of Commerce
Mayor’s Economic Forecasting Committee, City of Spokane
Eastern Washington University
Spokane Community Indicators
Star USA: Barbara Beddor & Toby Steward
Ann Glendening
Shawn Shukle
Julie Read
Barbara Jones
Greater Spokane Valley Chamber of Commerce
The Inland Northwest
The Inland Northwest
► 23
Counties in Three States
► 1,017,200 people (0.34% of U.S.
Population)
► 36,534 Square Miles
► $17.5 Billion in After-Tax Income
► $16 Billion in Retail Sales
► $19.9 Billion in GDP (0.2% of U.S. GDP)
Sources: U.S. Census; July 2007 estimates (latest available); Bureau of Economic
Analysis-U.S. Department of Commerce, September 26, 2007 (covering 2001-2005
GDP trends by Metro area; 2007 Demographics USA; Spokesman-Review Market
Research, Misha Barbour; derivations and comparatives by Shaun O’L. Higgins
POPULATION ESTIMATES
January 1, 2001-July 1, 2007, Inclusive
Area
2001
2007
U.S.
283,876,400 301,045,500
Idaho
1,315,700
1,472,800
Montana
910,000
947,600
Washington
5,971,200
6,402,300
Spokane
422,200
446,706
Lewiston-Clarkston CBSA
58,500
59,600
Missoula CBSA
97,100
101,417
Coeur d’Alene CBSA
111,600
134,200
Change
6.0 %
11.9 %
4.1 %
7.2 %
5.8 %
1.8 %
4.4 %
20.3%
U.S Population has since grown to more than 306 million!
Source: US Census Bureau, 2007 (latest available for all data sets). Derivations by SOH.
ESTIMATED MEDIAN HOUSEHOLD INCOME
(EBI)
2001-2007
Region
U.S
Idaho
Montana
Washington
Spokane
Lewiston-Clarkston CBSA
Missoula CBSA
Coeur d’Alene CBS
2001
2007
$39,129
$34,806
$30,184
$44,682
$34,747
$33,458
$33,646
$35,250
$41,255
$37,696
$34,200
$44,523
$38,051
$35,418
$35,707
$36,628
Change
5.4%
8.3%
13.3%
0.4%
9.5%
5.9%
6.1%
3.9%
Source: S&MM Surveys of Buying Power, 2001-2005/American Demographics 2007 Derivations by SOH
Psychographics 1984,1994, 2008
► WORRIERS:
From 30% to 30% to 20%
► ADVENTURERS:
► SEEKERS:
► DOERS:
From 26% to 28% to 36%
From 26% to 22% to 30%
From 20% to 20% to 15%
Spokane Psychographics
1984-2008
40
35
30
25
Percentage
of
Adults
20
1984
1994
2008
15
10
5
0
DOERS
ADVENTURERS
SEEKERS
Psychographic Classifications
WORRIERS
Job-Creation Performance Snapshot
November 2008 over November 2007
Non-Agricultural Wage and Salary Jobs
Area
WASH
U.S. Rank ‘08 Rank ‘07 %
(Growth Rate)
Change
16
Tri-Cities
12
Spokane
226
Yakima
121
IDAHO
47
Coeur d’Alene 181
Boise-Nampa
296
MT
18
Missoula
183
U.S.
NA
Job Growth
5
-0.08
- 2,300
1
71
70
8
3
162
6
218
NA
2.02
-1.31
-0.25
-2.66
-0.86
-3.15
-0.20
-0.87
-1.47
1,900
- 2,900
200
-17,600
- 500
- 8,.800
900
500
-2,050,000
Total Jobs
2008
2007
2,972.700
2,9750,000
95.800
93,.900
219,300
222.200
79,900
80,100
645,000
662,600
57,900
58,400
270,300
279.300
446,900
447.800
57,300
57,800
137,100,000 139,150,000
On an annualized basis, Spokane employment will be up
slightly in 2008 over 2007!
Source: Blue Chip Job-Growth Update, W. P. Carey School of Business, Arizona State University 1/2/2009
3rd QUARTER 2008 HOUSING PRICE TRENDS
(292 U.S. Markets)
Area
1 Year
IDAHO
Boise-Nampa
Coeur d’Alene
-2.02 %
-3.98%
-4.44%
WASHINGTON
Spokane
Tri-Cities
Wenatchee
Yakima
-2.13%
-0.70%
4.11%
- 1.47%
1.27%
5 Years
31
217
198
245.86%
56.22%
62.03%
20.05%
69.17%
33.30%
32
122
13
150
68
395.12%
1.00%
-0.72%
52.49%
43.52%
12
123
290.64%
CALIFORNIA
-20.27%
24.8%
50
378.35%
U.S.
-4.00%
NA
269.40%
MONTANA
Missoula
53.41%
50.95%
70.02%
U.S. Rank ( 1Yr)
Since 1980
28.78%
Source: Office of Federal Housing Enterprise Oversight. Derivations by SOH
3 KEY POINTS IN THIS
1.Only homes sold since the 3Q/2007 have seen value
decline below original purchase price—
and not all of them!
2. Few Spokane County homeowners are
“UNDERWATER”-But, about 8% are likely feeling at least
a little
“DAMPNESS”!
3. In Spokane, this seems to happen about to this
degree about once a decade!
Spokane Home Prices/Sales
1999-2008
Year
Buyers
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
5,443
5,324
5,898
6,243
7,218
7,758
8,373
7,792
6,935
4,911
Median Price
3Q
$106,800
$105,000
$110,000
$111,500
$119,900
$129,000
$150,000
$175,000
$185,400
$184,100
Value 3Q
2008
$193,700
$189,600
$189,400
$185,900
$194,300
$188,900
$186,900
$199.600
$184,100
$178,750 (4Q)
Change
+81.4%
+80.6%
+72.2%
+66.7%
+62.1%
+46.2%
+24.6%
+ 7.8%
- 0.7%
- 2.9%
Total estimated January-December 2008 value decline: -3.4%-3.6
Source: Spokane Association of Realtors/MLS/Rob Higgins. Estimates by SOH
3rd QUARTER 2008 HOUSING PRICE TRENDS
COMPARATIVES: BEST & WORST
MSA
Austin TX
Augusta GA
Rapid City SD
Houma-Thibodeux LA
Houston, TX
Vallejo-Fairfield CA
Salinas CA
Modesto CA
Stockton CA
Merced CA
Swimming
1 Year
5.6%
5.5%
5.4%
5.2%
5.2%
Drowning
-33.3%
-34.1%
-36.7%
-41.4%
-43.3%
5 Years
35.3%
39.0%
29.7%
43.3%
27.1%
-5.6%
-1.8%
-6.7%
-15.0%
-15.0%
Source: Office of Federal Housing Enterprise Oversight, January 2009. Derivations by SOH
Executive Summary
The recession has arrived in the Inland
Northwest . . .
. . . but it arrived later here—3rd or 4th
quarter 2008, than for the nation as a
whole (4th quarter 2007).
Though it arrived later, it will not stay
longer. There are too many good things
in the pipeline here and our strengths
are not in the hardest hit sectors of the
economy.
Executive Summary
To date, the impacts of recession have
been milder here than for the nation as
a whole. Employment has held a bit
steadier in most parts of the region ,
housing prices are much stabler in most
parts of the region.
We will continue to be an economic
refuge for those seeking to retire and
preserve wealth (particularly, we will
see growing in-migration from
California)
Executive Summary
In 2009:
More of the same, with gradual improvements
on all fronts beginning mid-year, with
continuing improvement throughout the year.
 Strong dollar will hinder agricultural exports
and weaken tourism from Canada.
 Inland Northwest will outperform the sstate
and nation on most indicators.
 Much stronger 4th quarter for Retail (no
weather records. Merry Christmas!
Executive Summary
Prepare for a strong 2010
KEY EVENTS






National-teams face off in Women’s
Hockey
U.S. Figure Skating Championships.
Vancouver Olympics
Infrastructure spending kicks in
Housing prices grow again
Markets, jobs, GDP all growing
“Those who come through
this pinch
will reap the future.”
--Sir Winston Churchill
Thank you!
[email protected]