The Economy:

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The Economy Whats Happening in the Inland
Northwest and When Will It Be Better? An
Economic Overview and Forecast for 2009 by
SHAUN OL. HIGGINS Director, Sales Marketing,
The Spokesman-Review Spokane Valley Chamber of
Commerce Mirabeau Park Hotel Spokane Valley,
Washington February 11, 2009
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Order of the Presentation Perspective on the
Present Situation A Changing Market
Psychographics and Animal Spirits A Look at
Jobs, Income and Housing Trends in the Inland
Northwest 2009 Regional Economic Forecast
Where angels fear to tread
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Caveats and Disclosures Im a handicapper, not
a formally trained economist. . . I do, however,
hang out with economists and try to keep up with
the literature! Listen for qualifying
phrases. Ill try to signal the most important
ones. The accuracy/inaccuracy of previous
forecasts doesnt mean a thing! My opinions do
not necessarily reflect those of Cowles Company
or The Spokesman-Review. The presentation will
last about 25 minutes. There may be time for a
few questions at the end.
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Sources and Acknowledgments
The Economist The Financial Times The Kiplinger
Washington Letter Marples Business
Newsletter The Spokesman-Review The Pacific
Northwest Inlander Puget Sound Business
Journal The Spokane Journal of Business U.S.
Census Bureau U.S. Conference of Mayors Belden
Associates Spokane Regional Convention
Visitors Bureau Greater Spokane, Incorporated
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Sources and Acknowledgments
Washington State Employment Security, Labor
Market Economic Analysis Branch Blue Chip Job
Growth Update ,Seidman Center, Carey School of
Business, Arizona State University Office of
Federal Housing Enterprise Oversight Bureau of
Economic Analysis, U.S. Department of
Commerce Mayors Economic Forecasting Committee,
City of Spokane Eastern Washington
University Spokane Community Indicators Star
USA Barbara Beddor Toby Steward Ann
Glendening Shawn Shukle Julie Read Barbara
Jones Greater Spokane Valley Chamber of Commerce
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The Inland Northwest
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The Inland Northwest

• 23 Counties in Three States
• 1,017,200 people (0.34 of U.S. Population)
• 36,534 Square Miles
• 17.5 Billion in After-Tax Income
• 16 Billion in Retail Sales
• 19.9 Billion in GDP (0.2 of U.S. GDP)
• Sources U.S. Census July 2007 estimates (latest
  available) Bureau of Economic Analysis-U.S.
  Department of Commerce, September 26, 2007
  (covering 2001-2005 GDP trends by Metro area
  2007 Demographics USA Spokesman-Review Market
  Research, Misha Barbour derivations and
  comparatives by Shaun OL. Higgins 

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POPULATION ESTIMATES January 1, 2001-July 1,
2007, Inclusive Area 2001
2007 Change U.S. 283,8
76,400 301,045,500 6.0
Idaho 1,315,700 1,472,800
11.9 Montana
910,000 947,600 4.1
Washington 5,971,200
6,402,300 7.2 Spokane
422,200 446,706
5.8 Lewiston-Clarkston CBSA
58,500 59,600 1.8
Missoula CBSA
97,100 101,417 4.4
Coeur dAlene CBSA 111,600
134,200 20.3 U.S Population has
since grown to more than 306 million! Source US
Census Bureau, 2007 (latest available for all
data sets). Derivations by SOH.
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ESTIMATED MEDIAN HOUSEHOLD INCOME
(EBI) 2001-2007 Region 2001
2007 Change U.S
39,129 41,255 5.4 Idaho
34,806 37,696
8.3 Montana
30,184 34,200 13.3
Washington 44,682
44,523 0.4 Spokane
34,747 38,051
9.5 Lewiston-Clarkston CBSA
33,458 35,418
5.9 Missoula CBSA 33,646
35,707 6.1 Coeur
dAlene CBS 35,250
36,628 3.9 Source SMM Surveys of
Buying Power, 2001-2005/American Demographics
2007 Derivations by SOH
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Psychographics 1984,1994, 2008

• WORRIERS From 30 to 30 to 20
• ADVENTURERS From 26 to 28 to 36
• SEEKERS From 26 to 22 to 30
• DOERS From 20 to 20 to 15

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(No Transcript)
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Job-Creation Performance
Snapshot November 2008 over November 2007
Non-Agricultural Wage and Salary Jobs Area
U.S. Rank 08 Rank 07
Total Jobs
(Growth Rate) Change Job Growth
2008 2007 WASH
16 5 -0.08 - 2,300
2,972.700 2,9750,000 Tri-Cities
12 1 2.02 1,900
95.800 93,.900 Spokane
226 71 -1.31 -
2,900 219,300 222.200 Yakima
121 70 -0.25 -
200 79,900 80,100
IDAHO 47 8
-2.66 -17,600 645,000
662,600 Coeur dAlene 181 3
-0.86 - 500 57,900
58,400 Boise-Nampa 296 162 -3.15
- 8,.800 270,300
279.300 MT 18 6
-0.20 - 900 446,900 447.800
Missoula 183 218
-0.87 - 500 57,300
57,800 U.S. NA
NA -1.47 -2,050,000 137,100,000
139,150,000 On an annualized basis, Spokane
employment will be up slightly in 2008 over
2007! Source Blue Chip Job-Growth Update, W. P.
Carey School of Business, Arizona State
University 1/2/2009
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3rd QUARTER 2008 HOUSING PRICE TRENDS (292 U.S.
Markets) Area
1 Year 5 Years U.S. Rank
( 1Yr)

Since 1980

IDAHO -2.02 53.41
31 245.86
Boise-Nampa -3.98 50.95
217 Coeur dAlene
-4.44 70.02 198
WASHINGTON
-2.13 56.22 32 395.12
Spokane -0.70
62.03 122 Tri-Cities
4.11 20.05 13
Wenatchee -
1.47 69.17 150
Yakima 1.27 33.30
68 MONTANA 1.00
52.49 12 290.64
Missoula -0.72 43.52
123 CALIFORNIA
-20.27 24.8 50 378.35
U.S.
-4.00 28.78 NA 269.40
Source Office of
Federal Housing Enterprise Oversight. Derivations
by SOH
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3 KEY POINTS IN THIS 1.Only homes sold since the
3Q/2007 have seen value decline below original
purchase price and not all of them! 2. Few
Spokane County homeowners are UNDERWATER-- But,
about 8 are likely feeling at least a little
DAMPNESS! 3. In Spokane, this seems to happen
about to this degree about once a decade!
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Spokane Home Prices/Sales
1999-2008 Year Buyers Median
Price Value 3Q Change
3Q
2008 1999
5,443 106,800 193,700
81.4 2000 5,324
105,000 189,600
80.6 2001 5,898 110,000
189,400 72.2
2002 6,243 111,500
185,900 66.7 2003
7,218 119,900 194,300
62.1 2004 7,758
129,000 188,900 46.2
2005 8,373 150,000
186,900 24.6 2006
7,792 175,000 199.600
7.8 2007 6,935
185,400 184,100 - 0.7
2008 4,911 184,100
178,750 (4Q) - 2.9 Total estimated
January-December 2008 value decline -3.4-3.6
Source Spokane Association of
Realtors/MLS/Rob Higgins. Estimates by SOH
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3rd QUARTER 2008 HOUSING PRICE
TRENDS COMPARATIVES BEST WORST Swimming
MSA
1 Year 5 Years
Austin TX
5.6 35.3 Augusta GA
5.5
39.0 Rapid City SD
5.4 29.7 Houma-Thibodeux
LA 5.2 43.3
Houston, TX
5.2 27.1
Drowning Vallejo-Fairfield CA
-33.3 -5.6 Salinas
CA -34.1 -1.8
Modesto CA -36.7
-6.7 Stockton CA -41.4
-15.0 Merced CA
-43.3 -15.0 Source Office of
Federal Housing Enterprise Oversight, January
2009. Derivations by SOH
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Executive Summary

• The recession has arrived in the Inland Northwest
  . . .
• . . . but it arrived later here3rd or 4th
  quarter 2008, than for the nation as a whole (4th
  quarter 2007).
• Though it arrived later, it will not stay longer.
  There are too many good things in the pipeline
  here and our strengths are not in the hardest hit
  sectors of the economy.

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Executive Summary

• To date, the impacts of recession have been
  milder here than for the nation as a whole.
  Employment has held a bit steadier in most parts
  of the region , housing prices are much stabler
  in most parts of the region.
• We will continue to be an economic refuge for
  those seeking to retire and preserve wealth
  (particularly, we will see growing in-migration
  from California)

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Executive Summary

• In 2009
• More of the same, with gradual improvements on
  all fronts beginning mid-year, with continuing
  improvement throughout the year.
• Strong dollar will hinder agricultural exports
  and weaken tourism from Canada.
• Inland Northwest will outperform the sstate and
  nation on most indicators.
• Much stronger 4th quarter for Retail (no weather
  records. Merry Christmas!

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Executive Summary

• Prepare for a strong 2010
• KEY EVENTS
• National-teams face off in Womens Hockey
• U.S. Figure Skating Championships.
• Vancouver Olympics
• Infrastructure spending kicks in
• Housing prices grow again
• Markets, jobs, GDP all growing

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Those who come through this pinch will reap
the future. --Sir Winston Churchill
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Thank you! shaunh_at_spokesman.com