Strong local economy may get better
With the Spokane-area economy chugging along as well as it has since Expo ‘74, two local economists foresee developments that could accelerate growth in the future. And a Wisconsin-based consultant offers some reinforcement for their optimism.
Where are we now?
Washington State University Professor Don Epley says Spokane’s economy in the second quarter recovered for its best showing since the end of 2000, when growth was stronger than at any time going back 20 years. Using an index akin to that used to measure gross domestic product, and with 1994-1996 as a baseline, he pegged the second-quarter economic activity at 113.76, close to the 114.33 for the last quarter of 2000.
Even more encouraging, his leading economic activity index was a perfect 1.0. Every one of the nine factors that figure into the calculation was positive for the first time. Epley says he was so taken aback he delayed the release of his quarterly report one month to back-check.
“It was phenomenal,” Epley says, adding that the alignment of the economic stars will lift his index to its highest-ever peak by the end of the year.
His indicators reinforce the diagnosis that government jobs and services — from hospitality to medicine — provide Spokane’s economic backbone. A focus on growing those sectors, by building a new convention center and filling out the University District’s Riverpoint Campus, plays to those strengths, Epley says.
A vision and a “go team” of business and government officials to sell it are essential, says Epley, who has not been in Spokane long enough to recall the years when message and messengers were scrambled.
He and Avista Corp. economist Randy Barcus expect good news on the future of Fairchild Air Force Base could light an afterburner for an economy already at liftoff. As the Pentagon announces which bases it will close to increase efficiency — decisions due next year — still-essential missions will be shifted to the remaining posts.
Two Spokane Regional Chamber of Commerce go teams are working to assure Fairchild survives, then grows.
The planned move of two submarines to Western Washington from Georgia, and the 2,000 sailors and family members who will move with them to Kitsap County, illustrates the magnitude of the potential economic payoff, Barcus says.
He also expects more out-migration from California to ripple into the Inland Northwest. As refugees infect housing markets in cities like Las Vegas and Tucson with the same feverish inflation that afflicts affordability in the Golden State, families who want a home will relocate ever farther afield, Barcus says.
New economic analyses from UCLA warn that the odds of a national recession are increasing within the next couple of years, and California’s fortunes will turn on the success officials there have getting the state’s budget under control. Barcus says more residents may decide the uncertainties make moving soon — pockets full of cashed-in home equity — the smart choice.
Which brings us to Rebecca Ryan, the consultant who spoke to Eastern Washington community leaders Thursday about cool communities and creating the thriving downtowns that attract talent. Economic development efforts, she suggests, should focus on labor, not companies. Like author Richard Florida, who visited Spokane last September, Ryan says a shrinking labor pool will force companies to go where the skilled workers are. Build a “talent capital,” and they will come.
Few economic development organizations understand this new dynamic, Ryan says.
In the 1990s, she says, 90 percent of all U.S. cities lost talent to a favored 10 percent, among them Seattle, Austin and Boston. Those were the days of the DINCs, households with dual incomes, no children.
The DINCs have become SITCOMs, single-income, two children, oppressive mortgage. In-migration to some of the cool communities of the 1990s drove housing prices into the stratosphere.
Ryan says some communities that saw their talented young people leave to pursue opportunities elsewhere are reeling those refugees back in. Living close to the grandparents in a home priced less than the Taj Mahal seems like an attractive proposition to SITCOMs, Ryan says.
Told that’s precisely the approach the Spokane Regional Chamber of Commerce has implemented with its Homecoming initiative, Ryan said “They are on the clue train.”
All aboard.