The Spokane-Coeur d’Alene job market has outperformed projections this year, and many industries in the Inland Northwest have strong momentum going into 2017. 

While growth is expected on many fronts, the rate of expansion might not be as great next year as it’s been in 2016, with some economic indicators giving off mixed signals. 

Employers in the Spokane metropolitan statistical area are expected to add about 5,000 jobs in the upcoming year, which would be fewer than the 7,500 positions created this year but in line with 2014 and 2015, when between 4,500 and 5,000 jobs were generated annually. About 5,000 new jobs in 2017 would represent growth of just under 2 percent. 

In Kootenai County, a faster rate of job growth is projected, with one economist expecting a 3.1 percent increase in the number of employed and self-employed workers there. 

Jobs in professional services have led much of the employment growth in recent years, and that’s expected to continue into 2017. Due to an increase in discretionary income that comes with many jobs in that sector, spending—and subsequently hiring—in the leisure-and-hospitality industry has picked up as well, two Spokane-area economists say. Most of that employment increase involves restaurants and bars. 

One concern of a strong job market is the possibility of a labor shortage in some industries. In the construction sector, observers say the inability to find trained, qualified workers could impede momentum.

For now, however, the Spokane-area construction market is buzzing along. The city of Spokane issued building permits for projects valued at $402 million through the first 11 months of this year. That’s up 23 percent from the total value of all permits issued in 2015. 

Another $85 million in major projects are under plan review at the city, including the $28.9 million Copper River Apartments, in northwest Spokane, and the $18 million Gonzaga University Center for Athletic Achievement. 

The Copper River complex is one of a number of apartment projects planned or underway in the Spokane market as developers build more living units to meet demand amidst what one observer called “an amazingly low vacancy rate.”

New-home construction also is on the rise. In the first 10 months of this year, nearly 700 new homes sold through the Spokane Multiple Listing Service, which is about 125 more new homes than sold during the year-earlier period. 

The overall home-sales market is strong as well, with 6,290 homes sold through the Spokane MLS during the first 11 months of this year, a 7.6 percent increase compared with the year-earlier period. 

The median home-sales price rose during the same period to $195,500, an 8.7 percent increase, according to MLS data. One real estate executive says median home prices in Spokane County should be around the $200,000 mark next year. 

The commercial real estate markets are strong, one Spokane-area broker reports, but leasing activity is mixed. Downtown office leasing is soft, with few businesses changing locations, but the retail leasing sector is strong downtown, as well as in most other parts of Spokane. 

Healthy retail real estate activity is coming at a time when retail sales growth is outpacing income growth. Taxable retail sales have risen 7 percent in Spokane County this year, but current income growth is closer to 4 percent. Strong vehicle sales in the current—and likely fleeting—low-interest rate environment are one likely explanation for the sales growth. 

The retail sector downtown is expected to expand next year when a new Free People store opens at 809 W. Main in March and the renovated first and second floors of the former Macy’s store building become available for lease. That activity follows the construction and recent opening of an Urban Outfitters store at the east of the River Park Square complex. 

Spokane-area bank and credit union executives are bullish about 2017 despite the likelihood of rising interest rates. Those interviewed by the Journal still expect revenues to increase next year, with a couple of larger credit unions expecting double-digit growth in loans. 

While higher interest rates appear to be a certainty in the financial industry, little is clear about the future of the health care sector due to President-elect Donald Trump’s criticism of the Affordable Care Act. Regardless, the large health care providers in the Spokane-Coeur d’Alene market are moving forward with major plans. 

Tacoma-based Multicare Health System is expected to complete its $425 million acquisition next spring of the Rockwood Health System, which includes Deaconess Hospital, Valley Hospital, and Rockwood Clinic. 

Providence Health Group, the Inland Northwest’s largest provider network, is partnering to build a $37 million, 100-bed psychiatric hospital near its downtown campus. Separately, Providence plans to open several Express Care clinics in the Spokane area next year. 

In North Idaho, Kootenai Health launched a $45 million second phase of expansion earlier this year. Some of that work won’t be completed until 2018.

Other industries with degrees of uncertainty include the mining and agricultural sectors, both of which are combatting depressed prices. 

—Linn Parish