The Spokane-area economy appears to be strengthening again, according to the most recent Spokane Leading Economic Index compiled by Washington State University professor Don Epley.


Meanwhile, in a second index compiled by Epley, the purchasing power of Spokanes work force continues to decline, though the rate of decline has slowed.


The Spokane Leading Economic Index, which Epley developed two years ago to track Spokanes economy using methods tailored to the metropolitan areas economic makeup, climbed markedly to 0.67 in his recently released report, from 0.38 in his spring report. The index, which can vary between zero and 1.0, is intended to predict the direction and strength in which the economy here is moving.


The index had surged as high as 0.78 a year ago, and as low as 0.16 in February 2002. The average index since Epley began compiling it is 0.52.


The index uses moving averages from six local indicators and three national ones that Epley chose based on the makeup of Spokanes economy. In the latest report, six of those nine were positive, though all three of the indicators showing a negative direction were local.


Among the indicators, residential building permits showed positive movement, as did both employment and unemployment statistics, though the total civilian work force indicated a negative trend, as did non-residential building permits and a projection from Epleys other index.


That index, called the Economic Activity Index, estimates growth in purchasing power in the Spokane metropolitan area by tracking employment and wages in 10 local industries. The results, Epley says, can be viewed as an approximation of what he calls the Spokane domestic product, similar to the U.S. Gross Domestic Product.


Because it relies on dated government information, the Economic Activity Index in the current report reflects the areas economic condition during the fourth quarter of 2002. The index for that quarter was 109.72, down 0.36 percent from a year earlier, but up slightly from the previous quarters 108.73. The rate of decline from the year-earlier quarter was substantially less than what was shown in reports for previous quarters since the economy turned soft.


The decline in the local economy has continued, but the rate has slowed, Epley writes in his report. Also, he writes, Even though the most-recent changes illustrate a decline, the Spokane economy still shows a positive growth in the long term.


For the first time, Epley also now includes a projection of where the index might come in for the current quarterthird quarter 2003based on historical data. He projects that this quarters index will be 108.2, only slightly less than the 108.7 index in the year-earlier quarter.