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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Regional economy not so contrary

An Eastern Washington University professor spent the past several months pondering a question many people here take for granted: does the regional economy follow the national economy?

For years, business people have declared that Spokane’s economy acts “counter” to the national economy — gaining when the national economy declines, and vice versa.

EWU Economics Professor Grant Forsyth, a self-declared “numbers guy,” plowed through a mass of regional and national data and concluded that’s wrong.

“The study shows we’re not out sync with the national economy,” said Forsyth. “But there are some counties — Whitman and Lincoln — that are have much less statistical association” between their activity and the nation’s, he said.

His conclusions appear in the latest publication by EWU’s Institute for Public Policy and Economic Analysis.

Forsyth gathered data to measure growth in personal income in the nation and eight counties: Spokane, Lincoln, Pend Oreille, Stevens and Whitman in Washington and Bonner, Kootenai and Latah in Idaho.

He used what statisticians call time-series data to track the change in each county’s average real personal income, comparing it for the same period to the nation as a whole.

The study used data from 1970 to 2002.

He reckoned that Lincoln and Whitman counties’ higher disconnect to national business activity is likely due to their agricultural economies. The large number of jobs provided by Washington State University in Whitman County plays some role, he said.

Of the six counties that do track closely, Spokane is the one with the neatest, closest statistical association — meaning the county’s business cycles matches the U.S. economic pattern more than the other five counties.

“It’s the largest urban area (of the group) and has been an established mid-sized metro for some time, so it makes sense,” Forsyth added.

The other oddity in the data, said Forsyth, was the drop in statistical correspondence for Bonner and Pend Oreille counties after 1986. Up until then, the two matched the U.S. economy somewhat. After 1985 the two showed less correspondence to national growth patterns, he said.

He surmised those shifts occurred as both counties encountered disruptions in their timber-based economies.

Forsyth said he’ll continue his study and probably produce an academic paper on the regional economy.

“What I’ve done is, when a person brings up the subject, I’ll be able to say we at least have some data to discuss it. Now, I’ll have more than just anecdotal information,” said Forsyth.