State’s recovery will take time, business editor says

By Mike Benbow Herald Writer

LYNNWOOD — The state’s economy will improve this year, but slowly.

That’s the economic forecast members of the South Snohomish County Chamber of Commerce heard Wednesday morning from Michael Parks of Marple’s Northwest Business Letter.

The general forecast wasn’t much different from several others provided to business groups in the county in recent weeks, but it included a lot more information.

“Things really do look better than they did last year,” Parks said.

Parks, who has edited the popular economic newsletter for many years, gave chamber members a detailed look at the pluses and minuses of the state’s economy.

Here’s a summary:

The good news

The proximity to the globe’s fastest growth: “There’s a great advantage to being close to the growing economies in east Asia,” Parks said. “Washington exports twice as much as the national average.”

A large and diverse high-tech sector, before the recession: “We had seen double-digit compound annual growth for 20 years.”

A weak dollar: “We are the beneficiary of the weaker dollar. It raises the prices of a Mercedes and French wine, but it helps the farms and factories of Washington state.

Population growth: “We should be excited that the U.S. (and Washington state) has high population growth.”

Hydropower and low electric rates: Still relatively cheap power will aid the economy.

Solar power plants: “Because of cheap electricity, technology and abundant water, we will make the solar-power equipment shipped off to the sand states,” he said. “We’ll make the hardware because we have the expertise.”

Markedly less severe housing bubble: Oregon has become the Michigan of the West Coast because it’s the state most exposed to the housing industry,” he said. “It’s a larger producer (than Washington) of softwood lumber.”

Economic risks

Low oil prices: “Lower oil prices are a negative,” he said. “They are a proxy for the global economy. Higher prices provide more urgency to buy 787s.”

Erosion of the Boeing backlog: The poor economy has meant fewer airlines are buying new planes and some have cancelled previous orders.

Severe layoffs in aerospace and software: “Forty years ago, one in every 10 jobs was in aerospace,” Parks said. “Today, about 3 percent of our employment is in aerospace.”

Sharp rise in the dollar: If that happens, we’ll sell fewer state products.

Boeing’s move to a right-to-work state: “We have been jilted by Boeing,” he said of the company’s decision to put a second 787 line in South Carolina. “We need to fight for every job we can hang onto.”