The economy just finished its best year of the century, and residents of the Pacific Northwest can look forward to more blue skies in 2005, two economists told a group of U.S. Bank customers...
The economy just finished its best year of the century, and residents of the Pacific Northwest can look forward to more blue skies in 2005, two economists told a group of U.S. Bank customers over breakfast yesterday.
The prospects for this region are even better than for the nation, said John Mitchell, a U.S. Bancorp economist based in Portland.
He predicts 3.2 to 3.7 percent growth in gross domestic product (GDP) for this year, with interest rates rising at a measured pace and inflation between 2 and 3 percent. He expects GDP for 2004 to come to about 4.5 percent.
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Mitchell forecasts softening in the housing markets due to rising mortgage rates. And consumer spending could slow now that the refinancing boom is over and no further tax cuts are expected, he said. He also pointed to strong job growth in Washington, Oregon and Idaho.
Michael Parks, editor and publisher of Marple’s Pacific Northwest Letter, was particularly optimistic about recent improvements in manufacturing employment, which has a major impact on Washington.
November marked the first time in more than six years that manufacturing employment was up compared with the same month of the previous year, Parks said. The sector remains important to the state’s economy despite the fact that fewer than one in 10 workers here now have factory jobs, down from about one in four 25 years ago.
Another plus for Washington is the uptick in population growth due to net migration into the state, brought on partly by stronger job growth, he said.
Parks cited the state’s forecast for net migration to grow from 22,000 people in 2002 to 60,000 in 2006.
The weak dollar is creating “many, many more winners than losers,” Parks said, listing businesses selling European cars, wines and tours as potential losers because of the weak dollar. Parks said winners include the Alaskan cruise lines selling tickets to Europeans and the region’s pulp and paper industry.