EVERETT — Boeing Co. backlogs make Snohomish County’s economy stronger than that of most parts of the country, a regional economist told Everett business leaders Thursday.
“Your airplane numbers are particularly strong here,” said Bill Conerly, an Oregon economist who studies the national and regional economies. “Boeing has been booking orders at three times their production. They’ve been ramping up production, but the backlogs are growing.”
Conerly, who spoke at the annual economic forecast luncheon of the Everett Area Chamber of Commerce, predicted “good growth” for the area in 2008.
“I think the greatest risk to your local economy is a national recession,” he said, adding he didn’t expect one.
Conerly said he’s predicting below-average economic growth for the nation, but a slowing of the growth rate, not a decline.
Noting the economy is dependent on consumer spending, he said buyers have slowed down their consumption but are still spending at a pace consistent with the growth of their earnings, meaning they should be able to do so. “Consumers are doing what I think is a perfect job right now,” he said.
The Northwest is dependent on business spending, exports and the wood products industry, Conerly said. Business spending has been good and exports are growing, he noted. He added they should continue to grow because of unprecedented economic growth around the world and because the falling dollar makes it easier for the U.S. to sell products overseas.
“If you’re buying a Mercedes, you should be distressed by the falling dollar,” he said. “But for the everyday person, it’s not a big deal that the dollar is falling.
Lumber and other wood products will be hurt by the U.S. mortgage crisis and by an extreme slowdown in building throughout much of the country, Conerly said. He noted that even the Northwest has built homes at a faster pace than population growth, but he said the area should sell through its excess home inventory relatively quickly.
In 2003 and 2004, the Puget Sound region was building 90 homes for every 100 people in population growth, Conerly said. He noted that was way too many, but added the area had been underbuilding in the years since. “You’ll work it off faster than the national average,” he said.
He expects home prices to be relatively flat or up just a little for the next year or two.
“Anybody who has bought a house in the region and holds it for 10 years will do OK,” he said. “Over the next year or two, you could experience some losses.”
With both Boeing and Microsoft “doing well,” Conerly said the region should expect continued job growth. “This is the healthiest economy I’ve spoken in,” said Conerly, noting he has traveled around the country talking about the economy.
That said, Conerly said the Northwest is not without its economic problems. In addition to fallout from the mortgage mess, the area has a very tight job market with low unemployment and a lack of available trained workers. “I’m hearing a lot from people who are having problems finding good workers,” he said. “Especially from fussy employers.”
He said he defines “fussy employers” as those who “want people to come in on time and every day not drunk or stoned.”
He said that from 2010 and 2020 there will not be any net growth of the number of people of working age in the United States. “You have to be stealing people from someone else or getting somebody to move to this area,” he said. “The number one issue should be employee retention. If it’s not one of your top three strategic initiatives, you need to rethink your initiatives.”
Writer Mike Benbow: 425-339-3459 or firstname.lastname@example.org.