Strong employment growth. Low interest rates fueling demand for housing. Consumers willing to spend and able to pay. Inflation that remains in check.
“Don’t pinch me too hard,” quipped Frontier Bank President Lyle Ryan. “I don’t want to wake up.”
After years of fits and starts, Snohomish County’s economy is in full recovery, bankers and economists said.
“No more soft patch,” state labor economist Donna Thompson said. “We had a soggy patch. We’re through that.”
“Everything is really great,” Ryan added. “There’s nothing to complain about.”
Key economic indicators tell the story.
Unemployment rates are falling. The county’s jobless rate dropped to 4.9 percent in June.
A key reason: hiring across the aerospace industry, particularly at the Boeing Co.
Yet it’s not just Boeing, Thompson said.
“We’re seeing growth in all the sectors,” she said.
That’s a change from the past year or so, when gains in one employment sector were typically offset by losses in others.
Spending is up, too. With more people bringing home paychecks, there are more people with money to spend.
“Back in regular times – whatever that means – you’re used to retailers coming in and talking about how things are slow,” Ryan said. “There’s nothing like that going on.”
Those who have borrowed money to buy big-ticket items are paying them off on time, Ryan said. Late payments on loans are “probably at historic lows” at Frontier, he said. “We can sit here and count on one hand the number of problem loans we’ve got.”
Housing demand remains strong. Sales of existing homes are up, and the county is issuing more building permits.
That’s been good for Frontier, which does a lot of business lending money to real estate developers and home builders.
The bank recorded a $322 million increase in lending business during the second quarter, compared to the second quarter last year. That’s almost a 17-percent increase, Ryan said.
“Interest rates in the long term have stayed nice and low, and demand is nice and high, and inventory is very low,” he said. “It’s the formula.”
Inflation has remained low, in spite of big increases in fuel prices, particularly gasoline.
Rising gas prices have hit motorists hard, but they’ve had an unexpected benefit, Thompson said; people have been forced to spend money on gasoline that they otherwise would have spent on consumer goods, and that’s helped keep inflation in check.
Further increases in fuel prices could put the breaks on continued economic growth, Thompson said. So could an unexpected shock, such as another terrorist attack or a major setback in the war in Iraq.
But without that, “the way things are looking right now, the picture is rosy,” she said. “We’re getting to the point where I’d say the economy is very healthy in Snohomish County.”
Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.
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