2009 Annual Dinner Wrap Up
Recession, state budget deficits, unemployment. When will it all turn around, and what’s the outlook for Washington and the nation?

A panel of three veteran experts took a shot at answering these questions on June 4 at the Washington Research Council’s 77th annual dinner. Among them was Research Council economist Kriss Sjoblom.

Bill Longbrake, with a doctorate in finance and years of experience in the banking industry, provided the national context. He said the recession is on its last legs and predicted recovery will get underway in the third quarter.

But expect a weak rather than strong recovery, he warned. Consumer spending may well remain sluggish during the next few years, given the travail in the stock and housing markets and the disappearance of easy credit.

If the consumers remain too frugal, he added, it’s possible that we could experience a second round of recession next year.

The big question, he said, is whether consumers will stay frugal or will they spend freely once again.

There are a few bright spots for Washington. Longbrake noted that China and the rest of Asia continue to develop rapidly, and this could provide a lot of opportunity for trade-heavy Washington. Exports will climb, and this state — with its strong technology, aerospace and agriculture sectors — stands ready to prosper.

Panelist Michael Parks, a long-time journalist and self-taught economist, zeroed in on the regional economy, observing that the current recession, at 18 months and counting, is the longest since World War ll.

But Washington can take some comfort in the fact that Idaho and Oregon have been hit harder than the Evergreen state, judging by comparative statistics on such measures as gross state product, personal income, total and disposable income, and population growth.

Parks said Washington has fared better than its neighbors in such sectors as manufacturing and construction. And while Oregon and Idaho have been pulled down by slumping demand for wood products, Washington’s strength in aerospace has made it less susceptible to cyclical downturns.

Kriss Sjoblom, a former university economics professor, observed that there’s no Washington state economy as such. Rather, the state is a collection of metro economies. Seattle and King and Snohomish counties constitute one — the biggest one, with about half the state’s total employment. What happens in one metro economy, he said, is no indicator of the state as a whole.

More generally, he said, Washington has built six areas of strength — aerospace, software, service businesses, construction, agriculture and health care. The question is, will these sectors remain strong?

In software, for instance, Microsoft during this recession was forced to make its first lay offs ever. If the software giant tightens up on spending, Sjoblom said, the local economy will feel it.

Ticking of the sectors, Sjoblom reviewed trends in such industries as agriculture, construction and aerospace, among others.

It was an evening marked by numerous power-point slides filled with graphs and numbers, the very language of economists. TVW's video of the panelists’ presentations are available at this link. Enjoy.