OLYMPIA - The South Sound economy is recovering slowly, and whether the pace will pick up will depend largely on nationwide consumer confidence and how that translates into consumer spending, a Portland-area economist told Thurston County business and community leaders Tuesday.
Bill Conerly of Lake Oswego, Ore., was the keynote speaker at Tuesday’s Thurston County Economic Development Council’s economic forecast conference. He also told the approximately 200 attendees that it likely will take another year for the county’s housing market to improve.
The annual event provided a look at where Thurston County’s economy is, where it has been and where it’s going.
Conerly acknowledged that the economy in Washington and the Northwest basically “stinks,” but it should improve as the national economy improves.
“If consumers stay very, very cautious, then there is going to be a slow recovery,” Conerly said about consumer spending.
He also pointed out that the county overbuilt during the early part of the decade, but the slower pace of residential construction still hasn’t helped the excess inventory in the market. It has, however, chipped away at the total number of homes for sale here, Northwest Multiple Listing Service data show. In the year-over-year period ending in November, total listings fell 13.35 percent to 1,668 units last month from 1,925 units in November 2008, the data show.
Conerly also spoke at the conference last year. He said then that the county was overbuilt with new housing units. The difference was that in 2008, people continued to move into the county, but that hasn’t happened in 2009 because of the recession. “In boom times, people move a lot,” he said.
There are some encouraging signs in the local economy, according to chief executive and consumer confidence surveys compiled by Riley Moore, an associate professor of economics at Saint Martin’s University. During Moore’s presentation, the data showed that although business leaders have concerns about the current economy, their expectations for the economy in the next six months and profits in the coming year are “moderately better.” Thurston County consumers still have concerns about the job market and trying to sell a house, the data show.
Home sales have been stronger in recent months because of lower mortgage interest rates and tax-incentive programs offered to first-time home buyers. The median price of a home also fell to its lowest point of the year last month to $225,000, down from $246,900 in November 2008, according to Northwest MLS data.
And if consumer spending is what the economy needs, there could be more starting next summer, said Maj. Mike Garcia, a public affairs officer at Fort Lewis. Garcia said 13,000 of the 18,000 soldiers who are deployed are expected home next summer, which could translate into lots of spending.
“They make a great deal of purchases when they come home,” he said. Garcia also talked about the economic effect the post has on the region. About 90,000 people – soldiers, civilians and retirees – are directly affiliated with Fort Lewis, which generates $2.67 billion, he said. Most of that is in military payroll, according to Garcia’s data.
Rolf Boone: 360-754-5403