Spokanes economy has rebounded to nearly where it was before the swoon that began in 2001, according to the most recent Economic Activity Index compiled by Washington State University professor Don Epley.


That index estimates growth in purchasing power in the Spokane metropolitan area by tracking both employment and wages here. The index, Epley says, can be viewed as an approximation of what he calls the Spokane domestic product, similar to the U.S. Gross Domestic Product.


Epleys most recent report, which uses government data from the fourth quarter of 2003, shows an Economic Activity Index for that quarter of 113.09. That, says Epley, is 1.44 percent higher than a year earlier, and just shy of the 114.33 level it hit in the fourth quarter of 2000, the highest mark it had achieved in 20 years.


Were almost the same as when we started the slowdown, said Epley late last week. The economy is doing well. Were coming out of the slump. The national impacts that were hurting us are working their way out.


Over the 20-year period for which Epley has made calculations, Spokanes economy has grown at an annual average rate of about 2 percent, dipping significantly only during a two-year period beginning in 2001.


What were projecting is 1.75 percent to 2 percent annual growth in real economic terms here in the immediate future, he says. He says that only can happen, though, if Spokane doesnt get hit with an external shock, such as a Pentagon decision to close Fairchild Air Force Base.


Theres good news in Epleys other index as well.


Called the Spokane Leading Economic Index, it estimates the direction in which Spokanes economy is headed, using select data that reflect the metropolitan areas economic makeup. The most recent index, which is based on economic data from December 2003 and the first two months of 2004, was 0.63 (on a scale of zero to 1.0). That level is up slightly from 0.56 a year earlier.


The index has surged as high as 0.78, and as low as 0.16. The average index since Epley began compiling the report, in 2001, is 0.52.


The index uses moving averages from five local indicators and three national ones that Epley chose based on the makeup of Spokanes economy.


In the latest report, five of the eight indicators showed positive trends, including all three national indicators. The three local indicators that moved negatively were new single-family housing permits, all other residential building permits, and the number of unemployed people here.


Epley is a professor of economics and real estate at WSUs Spokane campus.