Is Spokane starting to feel a bit crowded to you?
About 740,000 people live in the greater Spokane-Coeur d’Alene metro area, and that figure could swell by nearly 15,000 next year if the projected growth pans out.
Moves, not births, are fueling most of the population gains. The surge of new residents means more traffic, more construction and more conversion of open space into urban areas. For longtime local residents, the change can feel jarring, said Grant Forsyth, Avista Corp.’s chief economist.
“For those of us who are 50-plus, the region looks completely different, and it feels different because so many people are moving here,” Forsyth said.
Job growth and affordable housing will continue to attract newcomers to the region, he predicted Wednesday at Greater Spokane Incorporated’s annual economic forecast.
“One of the big draws to the region is that we’re still a cheap date,” he said.
Spokane County’s cost of living is 14 percent below the Seattle area’s and 5 percent below the national average, he said. Although Spokane County’s median home prices have risen to $235,000, they remain a deal compared to other West Coast metro areas.
Strong job growth will continue through the first half of 2019, but could slow during the second half of the year – especially if trade disputes with China escalate, Forsyth said.
If Amazon hires 1,500 workers next year to staff its West Plains fulfillment center as planned, however, the region is likely to see strong job growth throughout the year, he said.
But Forsyth thinks it might take Amazon longer than anticipated to hire a workforce of that magnitude. A tight labor market is something local employers will grapple with next year and into the future, Forsyth said.
“Hiring that special someone is not going to be easy. Especially if you’re in construction. Especially if you’re in health care,” he said.
Several hundred business people attended the economic forecast at the Spokane Convention Center. Forsyth and John Mitchell of M & H Economic Consultants offered predictions for 2019.
National outlook: The nation is nearing the 10-year mark for economic expansion. “In seven months, we’ll tie the longest expansion in U.S. history,” Mitchell said.
Unemployment is at 3.7 percent nationally, wages are rising and people who previously had a hard time getting hired are working.
But companies are constrained by the lack of workers, Mitchell said. Nationally, the housing sector is showing signs of weakness, and changes in federal monetary policy could alter the U.S. economy’s outlook.
“The length of the expansion was helped by federal policy,” Forsyth said.
The local economy lagged behind the U.S. economy’s recovery from the Great Recession by about 2 1/2 years, eventually catching up, he said. Now, Washington and Idaho are creating jobs at a faster rate than the national economy.
Longer workweeks: One symptom of the worker shortage locally appears to be longer workweeks.
“The employees who do have jobs are being worked pretty hard,” Forsyth said.
Full- and part-time employees are working an average of 35 hours per week locally, which is higher than the national average of 34 hours.
“In technical terms, we are all working like mules,” he said.
Housing prices: The influx of new residents creates demand for housing, putting pressure on prices.
Local home prices will finish the year with an average gain around 11 percent, Forsyth predicted. He’s expecting a smaller increase in the 7 percent to 8 percent range next year.
Trade war: Protracted trade disputes with China and other countries would be detrimental to Washington’s export economy.
“It exposes us to much in the Northwest. It could undo so many of the gains we’ve made,” Forsyth said.
Both agriculture and manufacturing are at risk. Agriculture is a “huge source of income for the region,” Forsyth said. Trade disputes affect not only jobs in the fields but in the transportation industry that moves goods from farms to ports.
Many local manufacturers also have an international presence, selling products overseas or buying materials or parts through a global supply chain.
“Through most of our lives, the world has been on a path toward reductions in trade barriers. Global supply chains developed. Now that’s being threatened,” Mitchell said. “There may be unintended consequences.”