State recession nears an end

The recession in the State of Washington is nearing an end.   That’s the assessment of a panel of experts, who spoke Thursday evening at the 77th annual meeting of the Washington Research Council.

Bill Longbrake, a deputy director to the chairman of the Federal Deposit Insurance Corporation said that recovery is in sight in the third quarter of this year, but cautioned “it’s going to be extremely weak.”

Longbrake pointed out that the state’s economy mirrors that of the country.  “We’re now in lockstep with the rest of the United States,” he said, “and that hasn’t always been the case.” 

Longbrake said that consumer spending has declined significantly and he doesn’t see that rebounding very soon.   One bright spot is the trade deficit.  He feels it will rebound.

Kriss Sjoblom, a member of the Governor’s Council of Economic Advisors said this recession is different than the tech bubble burst in 2000.   “This time the pain is statewide and not just in King and Snohomish counties,” he said.

Sjoblom said things will be different in the future.  “I get the idea that the economy is pushing the reset button.”

He said that health care will continue to grow and that agriculture will bring a strong boom in commodities.  “Washington ranks first in the country in exports,” he said.  “But even if we take Boeing out of the picture, Washington will still be the eighth largest exporter.”

Michael J. Parks owner and editor of Marple’s Letter took a different tack.   He compared the current recession in the state with our adjacent states.  “Idaho and Oregon have been hit twice as hard by this current recession than has Washington,” he said. 

Oregon and Idaho have seen  the lumber business fall by 75 percent.  They’ve also been hit hard by tech declines, particularly in Oregon with Intel and in Idaho by Micron.

Parks pointed out that in Washngton,in the service arena,  the public sector accounts for 84 percent of all employment in the state.  Including education, six out of every seven service jobs in our state are in the public sector.

He also said that Boeing’s share of total employment in the state has declined from 5.4 percent in 1990, to 2.9 percent this year.  “We’ve diversified our economy during those years,” he said,  “We’re less exposed.”

The panelist agreed that keeping Boeing in Washington is going to be a struggle.

Sjoblom said that our labor costs are a disadvantage for the state in keeping Boeing.  “It’s a problem the Boeing and its unions have to work out,” he said.  “There isn’t anything government can do.”

Longbrake pointed out that the U.S. Auto industry is non-competitive because of labor costs.  “The global economy is tremendously competitive.  Labor needs to adapt.”

The annual meeting was held in Seattle and the members attending the meeting re-elected Tom Smith from Weyerhaeuser as the chair of the Board of Trustees.