Clark County's third quarter: Recovery toils on
Job losses stabilize, but gains too few to put real dent in drab unemployment picture
Sunday, October 28, 2012
TOP STORIES of the 3rd QUARTER
Burgerville opens new restaurant in Tigard, Ore., plans slow but steady expansion.
Sterling Bank wraps up acquisition of First Independent Bank.n Chuck's Produce & Street Market prepares for a second Clark County store.
Pendleton celebrates 100th anniversary of Washougal Woolen Mill amid state concerns over mill safety.
Ridgefield-based gummy vitamin maker Northwest Natural Products sold for $650 million.n Heritage Bank of Olympia opens a Portland regional headquarters in Vancouver.
Fitness equipment maker Nautilus opens new world headquarters building in Vancouver.
Aluminum product maker Sapa Extrusions North America completes 142,800-square-foot building at the Port of Vancouver.
Vancouver-based PeaceHealth announces a partnership with Colorado-based Catholic Health Initiatives.
Pendleton Woolen Mills reaches settlement with state Department of Labor & Industries on workplace safety fines.
The word "slow" has been used so often to describe Clark County's economic recovery that it has lost much of its meaning. So, a dictionary offers some useful synonyms to describe our current economic status.
Crawling. Creeping. Dawdling. Imperceptible. Leaden. Listless. Plodding. Sluggish. Stagnant. Torpid.
Or, for some unpleasant animal imagery, there are two choices: Snaillike, or tortoiselike.
As this year's fiscal third quarter closed on Sept. 30, those words describe this county's economy long after the official end of the Great Recession. The county's job growth rate for the year is below 1 percent -- less than one-third the growth rate that would signal a healthy economy. Median household income remains flat. Worse, unemployment for the quarter's last month is still likely to land above 10 percent when the final count comes in -- a couple of percentage points above the Washington and Portland region rates.
In his monthly employment report for September, regional economist Scott Bailey noted that initial unemployment claims were now close to a normal range after a big drop in August. But he noted that continued claims -- those ongoing claims during the first six months of unemployment -- remain substantially higher than pre-recession levels.
"So we have a labor market that is not generating a lot of job losses, but is not creating enough net new jobs to rapidly re-employ workers and bring down unemployment," Bailey wrote.
Some indicators improved during the quarter. Home sales are showing signs of life, but are well below pre-recession levels. Construction is rising, with apartment developers rushing to file development applications in order to catch the wave of rising demand and higher rents. Retail sales are up, with auto sales providing a significant chunk of those sales.
But if times are still a bit tough, at least Clark County residents are finding ways to enjoy life. Restaurant sales were only 2 percent below the pre-recession peak, Bailey reported.
And a big drop in foreclosures shows that the recession's effects are
easing up at the painful level of failed personal finances. Foreclosures dropped by 18 percent for the quarter.
Time of transitions
The quarter brought some key business transitions and realignments. In the ever-changing financial sector, Spokane-based Sterling Bank finally completed its takeover of First Independent Bank, which had been locally owned and operated. The final step came at a price: Sterling said it cut 48 jobs in July, with plans to cut another 13 by the end of this year.
With its expanded presence, Sterling became Clark County's second-largest bank as measured by deposits, with its 15 percent market share placing it second only to JPMorgan Chase.
Riverview Community Bank, the last remaining Clark County-based bank, will report last quarter's earnings this week. The report is highly anticipated by investors, since it follows three consecutive quarterly losses. Meanwhile, Heritage Bank showed its expansion ambitions by opening a Portland regional office in downtown Vancouver. The Olympia-based bank said it hopes to expand into the metro area by acquiring existing banks.
Other local companies went through big changes in the quarter. The corporate parent of Vancouver-based Northwest Natural Products, maker of gummy vitamins, was purchased in August by Church & Dwight Co. of Princeton, N.J., owner of numerous consumer product companies. The $650 million price tag was one of the largest acquisitions ever of a Clark County-based company.
Nautilus, a company with more than its share of ups and downs, opened its new world headquarters building in the Columbia Tech Center campus, a short move from its former location in the giant Columbia Center that it shared with Hewlett-Packard and PeaceHealth. Nautilus, freshly returned to profitability, also rolled out new products.
The exercise equipment maker's relocation could be timely, since PeaceHealth announced plans to form a partnership with Colorado-based Catholic Health Initiatives that could add more jobs to the Columbia Center. That partnership will combine seven Catholic Health Initiatives hospitals in Washington and Oregon with nine PeaceHealth hospitals in Washington, Oregon and Alaska. The new structure, with Vancouver at its hub, should be in place before midyear in 2013.
Just as change was in the air for some local companies, another marked a milestone of Clark County stability. Portland-based Pendleton Woolen Mills celebrated the 100th anniversary of its mill in Washougal. One of the Northwest's oldest companies, the family-owned textile maker opened the mill's doors for a community celebration.
But the event was bittersweet as the company was under scrutiny for state violations of health and safety rules at the mill.
Last month, Pendleton reached an agreement with the Washington State Department of Labor & Industries to pay a total penalty of $46,650 -- half of what the state had originally levied -- while promising to address remaining safety concerns and adopt new safety-focused management practices.
Housing on rise
As the economy continued to play tortoise, the housing sector showed signs of sustained recovery. A picture of the future emerged of new apartment buildings scattered across the county.
Yet the housing market is digging out of a very deep hole. An analysis by Zillow.com, cited by Bailey in his most recent monthly report, found that 41 percent of Clark County homeowners owed more than their home's worth. That placed the county among the worst in the nation in terms of underwater homeowners, Zillow said. And, Bailey says, much of the sales growth was in short sales -- where homes are sold for less than what is owed.
In another measure of the deep trough, Bailey noted that construction jobs are down by about one-third from their peak and there's no sign in sight of a housing boom like the one that heated up the county's economy in the 1990s. Back then, unemployment was well below the state average.
There's little indication, so far, of what job sector or industries might replace the lost construction jobs. So Clark County can't expect to easily catch up to the region's generally lower unemployment levels. A reasonable short-term goal, Bailey believes, is to get unemployment to within 1 to 11/2 percent above state and regional averages.
"Then, he says, "we could declare victory."
Columbian staff writers Cami Joner and Aaron Corvin contributed to this story.