Out-of-state driver's licenses surrendered in Spokane County increased in 2011 for the second consecutive year following three years of steep declines, but economic analysts have varying views on what that means for the economy here.

One analyst says trends in out-of-state driver's license surrenders are important, because they're early indicators of population growth. Another says the presumed influx of out-of-state residents is more than offset by the out-migration of Spokane County residents. Yet another analyst says the license data might indicate that the county's overall population will be revised upward.

In the 12 months ended Sept. 30, 2011, a total of 8,307 drivers from other states surrendered their licenses in Spokane County, presumably as they obtained Washington state drivers licenses here, an increase of 7.4 percent compared with the year-earlier period.

For the 12 months ended Sept. 30, 2010, such license surrenders were up 6 percent from the year-earlier period.

"Any community wants to see growth, and this is as good a leading indicator as any," says Glenn Crellin, Seattle-based associate director for research at the University of Washington Runstad Center for Real Estate Studies. Crellin compiled the data for the Spokane-Kootenai Real Estate Research Committee's fall issue of The Real Estate Report.

Out-of-state license surrenders had peaked in Spokane County at 10,405 for the year ending Sept. 30, 2006, before falling over the next three years to 7,300.

Statewide, out-of-state license surrenders were up 4.4 percent last year and 13 percent the year before.

The rise in driver's license surrenders indicates that out-of-state households have begun freeing themselves from mortgage and real estate crises in their former home states, and that should trigger real estate and other economic activity here, Crellin says.

People surrendering licenses in Spokane County consistently have come from California more than any other state, followed by Idaho, Oregon, and Montana, respectively.

California not only has a large population, it has one of the highest percentages of renters in the country, and renters tend to be more mobile than homeowners, Crellin says. In-migration follows the perception of employment opportunities—whether those jobs are real or imagined, he says.

Patrick Jones, executive director of the Eastern Washington University Institute for Public Policy and Economic Analysis, says the increase in out-of-state driver's license surrenders in 2010 and 2011 "would be a welcome reversal" of the earlier three-year decline in such numbers. Those gains, however, likely were more than offset by out-migration from Spokane County to other parts of the state, Jones says.

Other population estimates indicate the total population of the county dropped by 500 people in 2011.

"There still could be migration, but more people are leaving than coming," he says. "It's highly likely that there's out-migration from Spokane to the West Side, where job creation has been a bit stronger."

Jones says people who come from different states also come here for different reasons.

"California license surrenders may not be due to the job market, but a healthy dose of retirees," he says.

License surrenders from Idaho are more likely to be job related, and those numbers have remained fairly consistent since 2007, he says.

Randy Barcus, chief economist for Spokane-based Avista Corp., says the increase in driver's license surrenders indicates that the county's overall population estimate might have to be a revised upward.

Driver's license surrenders are just one of the indicators Barcus looks at when forecasting customer numbers and their energy demands. Other indicators he usually relies on more heavily include population estimates, nonfarm payroll numbers, building permits, and student enrollments.

Driver's license data, though, provide hard figures, unlike certain population estimates.

"Driver's license numbers are like a census," he says. "It's a count. It's not based on a model."

Accurate population estimates are crucial for county residents, because some state funds are allocated on a per-capita basis, Barcus says.

"Either they underestimated the population in 2011 or overestimated it in 2010," he says, adding that U.S. Census numbers available for 2010 should have made estimates for that year accurate.

"I think the 2011 population estimate in Spokane County is going to be revised," Barcus says.

On the other hand, Doug Tweedy, Spokane-based regional economist for the Washington state Employment Security Department, says the apparent increase in residents from out of state could mean that the out-migration of Spokane County residents might be higher than it had appeared at face value.

"Our numbers are showing the labor force is shrinking," Tweedy says.

In 2011, the labor force shrank by an estimated 1,500 people as the employment picture improved in other communities and states, he says.

Judging by the apparent increase in out-of-state residents, though, "The out-migration we're experiencing may be more than what we thought," Tweedy says. "It may not just be net out-migration."

Some people coming from out of state likely are filling jobs that have few qualified candidates here.

"Even though there's been a net decrease in jobs, part of the dynamics of the economy is it's creating jobs that may require skills that aren't in supply here," Tweedy says.

Those jobs include high-paying positions in some stable professional, scientific, technical, health, and manufacturing fields, he says.