The regional, state and national economies are expected to grow next year, but uncertainty is in the air and some of it can be tied to President-elect Donald Trump.
That was the message Portland-area economist Bill Conerly delivered to about 200 people Thursday during the Thurston Economic Development Council Innovation Expo & Forecast Conference at the Little Creek Casino Hotel and Resort event center near Shelton.
Conerly, who is based in Lake Oswego, Oregon, has been a fixture at the EDC event for years, regularly capping the day with his own economic forecast.
As with most economic forecasts, there was a mix of good news and not-so-good news.
The Washington state and regional economies, including Thurston County, have been strong, but that trend unsustainable because job growth is outpacing population growth, and population growth is outpacing housing growth, he said.
That is being played out most acutely in King County, where strong job growth and population growth has resulted in a run on housing, sending inventory levels to new lows and rents and home prices sky high.
In November, King County had about a month’s supply of single-family residences, according to Northwest Multiple Listing Service data. The median price of a single-family residence rose to $550,000 last month, the data show.
“The recent job growth has been unsustainably strong,” Conerly said about Washington state. He doesn’t expect a crash or a recession, but he does expect job growth to slow.
His outlook for the national economy also is mixed.
President-elect Trump and the federal government are expected to be more encouraging to petroleum drilling, pipeline construction, the mining industry and defense spending, which could create more jobs and benefit Joint Base Lewis-McChord.
But trade-dependent businesses, including the many in this state, likely will wait before they spend to see what kind of trade policies take shape under Trump.
Conerly shared this anecdote: In the 1930s, the federal government enacted high tariffs on imports and foreign countries retaliated with their own trade restrictions. The global trade volume collapsed as a result, he said.
He doesn’t think Trump will cause a disastrous collapse in trade, but instead will “go to the precipice and step back.”
And for those who say the country is worse off than it used to be, Conerly told a story about an Italian tour guide he once met who told him that growing up he got his cooking and washing water from a public fountain.
“If you think the country is worse off than it used to be, turn on your faucet and think how fortunate we are to live in a society as advanced as this,” he said.