Light at end of the tunnel grows
Forecasts mostly brighter for industry sectors hereDecember 20th, 2012
Like the ever-so-gradual acceleration of a heavily laden train, the Inland Northwest economy finally is expected to begin showing some noteworthy forward momentum next year, albeit at a still subpar pace.
Although plenty of uncertainty remains, particularly in regard to the so-called fiscal cliff, observers in a number of industry sectors here say they expect this year's mostly meager gains to give way to broader signs of recovery in 2013.
In the crucial employment area, Spokane-area economists are predicting job growth in Spokane and Kootenai counties, building on improvement during the second half of this year, but the growth rate might only be around 1 percent.
The mood also is more upbeat in the residential and commercial real estate sectors. Industry experts say the residential market appears to be starting to rebound following six years of sales declines, and commercial real estate activity should follow close behind. Buyer confidence is up, and a decrease in sales of distressed properties should help boost median sales prices.
The key to the housing market is employment, says Rob Higgins, executive vice president of the Spokane Association of Realtors, adding, "If there's job growth, we'll see sales numbers increase more substantially."
In the construction sector, many residential and commercial builders here are looking to 2013 with greater optimism than they've felt in years. Kate McCaslin, president and CEO of the Associated Builders & Contractors Inc. Inland Pacific Chapter, says contract backlogs of that organization's members are up 3 percent to 5 percent this year.
Meanwhile, some technology companies say they are expecting an upswing in sales, along with increased hiring, in the coming year. Contract manufacturer Servatron Inc., for example, says it hopes to increase sales by 10 percent in 2013, a goal it describes as realistic.
Spokane-area financial institutions showed improved performance this year and say they expect slow, steady growth in loans and deposits in 2013, despite tight profit margins due to the low interest rate environment.
The big health-care sector faces perhaps more uncertainty and change in the coming year than any other industry sector here, as it readies for broad implementation of the federal Affordable Care Act in 2014. However, Providence Health Care, the Inland Northwest's largest health care network, says it's in better financial shape now than it was a year ago and doesn't anticipate laying off any employees in 2013.
With larger cities luring away some of the convention and meeting traffic, tourism is expected to dip here next year, but retail sales and retail lease activity are projected to show moderate increases.
Battered Kootenai County is expected to see some sustained economic growth, driven partly by manufacturing, health care, and tourism activity and an anticipated continuing modest rebound in the residential real estate market.
Inland Northwest mining companies expect another year of high metal prices and production to meet global demand for gold and silver, as well as for base metals, and most agricultural producers here also are anticipating another strong year.
"The outlook for most commodities is very positive," says Craig Crider, a senior vice president with Northwest Farm Credit Services.
The wood products market also is showing signs of recovery in the coming year, due in part to a rise in new home construction that began in the second half of this year.