<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=192888919167017&amp;ev=PageView&amp;noscript=1">
Friday, March 29, 2024
March 29, 2024

Linkedin Pinterest

Bailey: Positives from 2015 to carry over

Regional economist foresees Clark County economy going full throttle in 2016

By SCOTT BAILEY
Published: January 21, 2016, 6:01am

First, a look back: my 2015 forecast for Clark County was for continued strong job growth. I thought that single-family housing construction would strengthen but remain below historic averages. I believed manufacturing would do well, with exceptions (transportation equipment), and that retail trade, professional and business services, and health care would all expand employment at a rapid rate. And that’s pretty much what happened.

Looking ahead: the state forecaster expects that the national economy in 2016 will not be all that much different from 2015. While GDP is expected to grow at a slightly faster rate, employment growth is expected to slow. The world economy is also predicted to grow at a slower clip — that and the high value of the dollar have already impacted exporters in the Pacific Northwest. The Fed has signaled its intention to continue with several small increases in the interest rate. On the positive side, oil prices will likely stay low and housing starts will continue to recover.

That theme of generally slower growth continues on down to the state level. Washington’s economy is very sensitive to the world market. In the second quarter of 2015, non-aerospace exports were down 17 percent year-over-year. The official state forecast calls for employment growth of 1.7 percent, down from 2.7 percent in 2015, with manufacturing losing jobs and construction employment barely increasing. Personal income is predicted to expand by 3.5 percent, versus 5 percent this past year.

The latest forecast for Oregon, in contrast, continually invokes the phrase “full throttle,” and predicts another year of strong growth in production and employment. I think the optimistic forecast for Oregon is more appropriate for Clark County.

2016 Economic Forecast

Find more information from the speakers at the annual event, along with videos of the keynote speakers and each of the breakout sessions at www.columbian.com/economicforecast. (Videos will be available Friday morning)

Same as last year, I expect many of the positives of 2015 will continue into 2016. Construction will remain strong, with more single-family home construction than last year. It will start to approach the averages from the pre-recession era. Manufacturing employment will likely show little change, with some downside potential due to the unfavorable exchange rate. Higher incomes will support more retail and food service jobs. We should see continued expansion in professional services and health care. And, of course, Banfield Pet Hospital will move its headquarters to Vancouver this spring.

We had some good news on wages and incomes in 2014. Although the median hourly wage didn’t budge, median household income rose nicely. I expect better news in 2015 and 2016 as the local labor market continues to tighten. It’s important to remember, though, that our labor force participation rate is still well below “normal” — meaning there are still a lot of people who dropped out of the labor force during the Great Recession and have yet to jump back in. If more of them do test the waters in 2016, we could see little change in the unemployment rate despite an improving labor market.


Scott Bailey is regional economist for the Washington Employment Security Department.

Loading...