Portland-area economist says wait for next year

Economic recovery will gain in 2014, he says

By Gordon Oliver, Columbian business editor

Published:

 
photoJohn Mitchell

PORTLAND — When Portland-area economist John Mitchell recently spotted a Cadillac Escalade with a vanity license plate "Cubs Win," his mind naturally turned to economics.

Waiting for a World Series title for the Cubs, who last won the prize in 1908, is like waiting for the current economic recovery to bring the nation back to pre-recession prosperity levels, Mitchell quipped Thursday during a "Leadership and Economic Summit" at Portland's Multnomah Athletic Club. The message from economists and from Cubs fans, he said, is the same: "Wait until next year."

Mitchell was keynote speaker at the event, which also featured a leadership panel discussion that included Hutch Johnson, president of Vancouver-based Cadet Manufacturing, and Betsy Henning, CEO and founder of Vancouver-based AHA!, a marketing and writing consulting firm. Jeff Gaus, CEO of Beaverton, Ore.-based Prolifiq Software, was the third panelist.

Mitchell's overall message to his audience of about 300 was that next year will indeed be better than this one, in line with a five-year pattern of recovery, although it will be nothing to match a World Series victory.

The year ahead is likely to be characterized by easing of central bank intervention in the economy, falling energy prices, stronger business balance sheets, improved state and local government health, an increasingly strong housing market, and steady recovery in China and in European economies, Mitchell said. All those positive signs are needed, he said, since the current recovery following a recession has been slower than any in our lifetimes. Even with an economic expansion that began in mid-2009, Mitchell said, the economy still offers 1.5 million fewer jobs than in January 2008.

Mitchell listed continuing drags on the slow recovery. The Federal Reserve's monetary policy remains a big question mark. The recession eroded household wealth, which has returned to only 73 percent of pre-recession levels. Many Americans lack confidence in their financial security, and an aging population raises costs for entitlements while raising concerns about the size and skills of tomorrow's workforce. The rise in entitlement costs, Mitchell said, is "the long-term fiscal dilemma in the United States."

In the leadership panel discussion, all three panelists were upbeat about the economy's direction. Cadet's Johnson said his company, which manufactures electrical heating products, has improved manufacturing efficiency and is developing plans to sell its products directly to consumers, rather than to retailers.

Tough to find right fit

Johnson said the company struggles to find qualified workers. "I don't understand who all these people are who don't have jobs," he said. But he noted that perhaps one or two candidates out of 100 who apply for a job actually fit his company's needs.

Henning said her company has continued to grow as technology opens vast new opportunities for companies to get their messages to the public. In terms of employment, Henning said AHA! can draw from a deep pool of qualified applicants because the Portland area is a magnet for writers and other creative services workers.

But Henning said many of those workers have hung out their own shingles and prefer to work on their own than for a boss, even if work is sparse. And she said that AHA!'s location in downtown Vancouver puts it at a disadvantage in attracting creative workers who would prefer an office in Portland.

"People want to be in the Pearl," she said.

The event was sponsored by Xenium; GeffenMesher; Pacific Continental Bank; and Pilot Wealth Management.