the economy: what’s happening in the inland northwest and when will it be better?
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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 - PowerPoint PPT PresentationTRANSCRIPT
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. HIGGINSDirector, Sales & Marketing, The Spokesman-Review
Spokane Valley Chamber of CommerceMirabeau Park Hotel
Spokane Valley, WashingtonFebruary 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 DisclosuresI’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 Sources and AcknowledgmentsAcknowledgments
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
SourcesSources and and AcknowledgmentsAcknowledgments
Washington State Employment Security, Labor Market & Economic Analysis Branch
Blue Chip Job Growth Update ,Seidman Center, Carey School of Blue Chip Job Growth Update ,Seidman Center, Carey School of Business, Arizona State UniversityBusiness, 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 UniversitySpokane Community Indicators
Star USA: Barbara Beddor & Toby Steward
Ann GlendeningShawn Shukle
Julie ReadBarbara Jones
Greater Spokane Valley Chamber of Commerce
The Inland NorthwestThe Inland Northwest
The Inland NorthwestThe Inland Northwest►23 Counties in Three States23 Counties in Three States►1,017,200 people (0.34%1,017,200 people (0.34% of U.S. of U.S.
Population)Population)►36,534 Square Miles36,534 Square Miles►$17.5 Billion in After-Tax Income$17.5 Billion in After-Tax Income►$16 Billion in Retail Sales$16 Billion in Retail Sales►$19.9 Billion in GDP (0.2% of U.S. GDP)$19.9 Billion in GDP (0.2% of U.S. GDP)
Sources: U.S. Census; July 2007 estimates (latest available); Bureau of Economic Sources: U.S. Census; July 2007 estimates (latest available); Bureau of Economic Analysis-U.S. Department of Commerce, September 26, 2007 (covering 2001-2005 Analysis-U.S. Department of Commerce, September 26, 2007 (covering 2001-2005 GDP trends by Metro area; 2007 Demographics USA; GDP trends by Metro area; 2007 Demographics USA; Spokesman-ReviewSpokesman-Review Market Market
Research, Misha Barbour; derivations and comparatives by Shaun O’L. Higgins Research, Misha Barbour; derivations and comparatives by Shaun O’L. Higgins
POPULATION ESTIMATESJanuary 1, 2001-July 1, 2007, Inclusive
Area 2001 2007 Change
U.S. 283,876,400 301,045,500 6.0 %Idaho 1,315,700 1,472,800 11.9 %
Montana 910,000 947,600 4.1 %Washington 5,971,200 6,402,300 7.2 %Spokane 422,200 446,706 5.8 %Lewiston-Clarkston CBSA 58,500 59,600 1.8 %Missoula CBSA 97,100 101,417 4.4 %Coeur d’Alene CBSA 111,600 134,200 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 2001 2007 Change
U.S $39,129 $41,255 5.4%Idaho $34,806 $37,696 8.3%Montana $30,184 $34,200 13.3% Washington $44,682 $44,523 0.4%Spokane $34,747 $38,051 9.5%Lewiston-Clarkston CBSA $33,458 $35,418 5.9%Missoula CBSA $33,646 $35,707 6.1%Coeur d’Alene CBS $35,250 $36,628 3.9%
Source: S&MM Surveys of Buying Power, 2001-2005/American Demographics 2007 Derivations by SOH
Psychographics 1984,1994, Psychographics 1984,1994, 20082008
►WORRIERS: From 30% to 30% to WORRIERS: From 30% to 30% to 20%20%
►ADVENTURERS: From 26% to 28% to ADVENTURERS: From 26% to 28% to 36%36%
►SEEKERS: From 26% to 22% to SEEKERS: From 26% to 22% to 30%30%
►DOERS: From 20% to 20% to DOERS: From 20% to 20% to 15%15%
0
5
10
15
20
25
30
35
40
Percentage of
Adults
DOERS ADVENTURERS SEEKERS WORRIERS
Psychographic Classifications
Spokane Psychographics1984-2008
1984
1994
2008
Job-Creation Performance SnapshotNovember 2008 over November 2007 Non-Agricultural Wage and Salary Jobs
Area U.S. Rank ‘08 Rank ‘07 %Change Thousands of Jobs
(Growth Rate) Job Growth 2008 2007
WASH 16 5 -0.08 - 2,300 2,972.700 2,9750,000 Tri-Cities 12 1 2.02 1,900 95.800 93,.900 Spokane 226 71 -1.31 - 2,900 219,300 222.200 Yakima 121 70 -0.25 - 200 79,900 80,100 IDAHO 47 8 -2.66 -17,600 645,000 662,600 Coeur d’Alene 181 3 -0.86 - 500 57,900 58,400 Boise-Nampa 296 162 -3.15 - 8,.800 270,300 279.300 MT 18 6 -0.20 - 900 446,900 447.800 Missoula 183 218 -0.87 - 500 57,300 57,800 U.S. NA NA -1.47 -2,050,000 137,100,000 139,150,000
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 5 Years U.S. Rank ( 1Yr) Since 1980
IDAHO -2.02 % 53.41% 31 245.86% Boise-Nampa -3.98% 50.95% 217 Coeur d’Alene -4.44% 70.02% 198 WASHINGTON -2.13% 56.22% 32 395.12% Spokane -0.70% 62.03% 122 Tri-Cities 4.11% 20.05% 13 Wenatchee - 1.47% 69.17% 150 Yakima 1.27% 33.30% 68
MONTANA 1.00% 52.49% 12 290.64% Missoula -0.72% 43.52% 123
CALIFORNIA -20.27% 24.8% 50 378.35% U.S. -4.00% 28.78% NA 269.40% 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 leasta 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 Median Price Value 3Q Change 3Q 2008 1999 5,443 $106,800 $193,700 +81.4% 2000 5,324 $105,000 $189,600 +80.6% 2001 5,898 $110,000 $189,400 +72.2% 2002 6,243 $111,500 $185,900 +66.7% 2003 7,218 $119,900 $194,300 +62.1% 2004 7,758 $129,000 $188,900 +46.2% 2005 8,373 $150,000 $186,900 +24.6% 2006 7,792 $175,000 $199.600 + 7.8% 2007 6,935 $185,400 $184,100 - 0.7% 2008 4,911 $184,100 $178,750 (4Q) - 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 TRENDSCOMPARATIVES: BEST & WORST
Swimming MSA 1 Year 5 Years
Austin TX 5.6% 35.3% Augusta GA 5.5% 39.0% Rapid City SD 5.4% 29.7% Houma-Thibodeux LA 5.2% 43.3% Houston, TX 5.2% 27.1%
Drowning Vallejo-Fairfield CA -33.3% -5.6% Salinas CA -34.1% -1.8% Modesto CA -36.7% -6.7% Stockton CA -41.4% -15.0% Merced CA -43.3% -15.0%
Source: Office of Federal Housing Enterprise Oversight, January 2009. Derivations by SOH
Executive SummaryExecutive Summary
The recession has arrived in the The recession has arrived in the Inland Northwest . . .Inland Northwest . . .
. . . but it arrived later here—3. . . but it arrived later here—3rdrd or 4 or 4thth quarter 2008, than for the nation as quarter 2008, than for the nation as a whole (4a whole (4thth quarter 2007). quarter 2007).
Though it arrived later, it will not Though it arrived later, it will not stay longer. There are too many stay longer. There are too many good things in the pipeline here and good things in the pipeline here and our strengths are our strengths are notnot in the hardest in the hardest hit sectors of the economy.hit sectors of the economy.
Executive SummaryExecutive SummaryTo date, the impacts of recession To date, the impacts of recession
have been milder here than for the have been milder here than for the nation as a whole. Employment has nation as a whole. Employment has held a bit steadier in most parts of held a bit steadier in most parts of the region , housing prices are much the region , housing prices are much stabler in most parts of the region. stabler in most parts of the region.
We will continue to be an economic We will continue to be an economic refuge for those seeking to retire refuge for those seeking to retire and preserve wealth (particularly, and preserve wealth (particularly, we will see growing in-migration we will see growing in-migration from Californiafrom California))
Executive SummaryExecutive SummaryIn 2009:In 2009:
More of the same, with gradual More of the same, with gradual improvements on all fronts beginning improvements on all fronts beginning mid-year, with continuing improvement mid-year, with continuing improvement throughout the year.throughout the year.
Strong dollar will hinder agricultural Strong dollar will hinder agricultural exports and weaken tourism from Canada.exports and weaken tourism from Canada.
Inland Northwest will outperform the Inland Northwest will outperform the sstate and nation on most indicators.sstate and nation on most indicators.
Much stronger 4Much stronger 4thth quarter for Retail (no quarter for Retail (no weather records. Merry Christmas!weather records. Merry Christmas!
Executive SummaryExecutive Summary
Prepare for a strong 2010Prepare for a strong 2010KEY EVENTSKEY EVENTS
National-teams face off in National-teams face off in Women’s HockeyWomen’s Hockey
U.S. Figure Skating U.S. Figure Skating Championships.Championships.
Vancouver OlympicsVancouver Olympics Infrastructure spending kicks inInfrastructure spending kicks in Housing prices grow againHousing prices grow again Markets, jobs, GDP all growingMarkets, jobs, GDP all growing
“Those who come through this pinch
will reap the future.” --Sir Winston Churchill
Thank [email protected]