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Northwest Growth Leads Nation

Overall forecast for region is bright despite poor jet sales, drought, and Alaska's oil slump

By Staff writer of The Christian Science Monitor / December 10, 1992



SEATTLE

THE Northwestern United States will continue to outperform the nation as a whole economically in the coming year, according to a recent forecast by two economists who follow the region.

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Though stressing that optimistic note, they do not predict smooth sledding from the Yukon to Yakima in the year ahead.

In Washington State, the region's largest, declining orders for new jets from the Boeing Company have brought the Seattle area's buoyant growth to a halt. Yakima County and other agricultural areas east of the state's damp coast have been hurt by a severe drought.

Alaska's oil-based economy is "awaiting the next resource boom" after the Bush administration failed to open parts of the Arctic National Wildlife Refuge to oil exploration, says John Mitchell, chief economist for US Bancorp of Portland, Ore.

The good news is that Idaho and Montana, the region's smallest states, are expected to continue their strong growth, and Oregon promises to recover some of its vigor, according to Dr. Mitchell and co-author Paul Sommers, who is research director at the University of Washington's Northwest Policy Center in Seattle.

This report is the fourth annual "Northwest Portrait" by the two economists, assessing the past year and projecting job growth in the year ahead. The highlights, on a state-by-state basis, include:

Alaska. After adding jobs at a 5 to 6 percent annual rate in 1989 and 1990, "Alaska has really slowed down dramatically," Mitchell says, with 0.4 percent job growth in the year ended in August and a rise of less than 1 percent expected again next year. Three key industries - seafood processing, oil, and forest products - have either declined or leveled off.

The report notes a modest rise in tourism this year, and suggests that the mining industry may expand if Echo Bay Mines reopens the Alaska Juneau Gold Mine, closed in 1944.

Idaho. The Gem State is ranked first in the nation in employment growth in 1991, at 3.3 percent, and second in the year ended this August with 2.6 percent growth. Next year should see job growth of about 3 percent, according to the report.

The rapid expansion of activity in Boise over the past few years reflects the appeal of small, inland cities as places to locate businesses, Mitchell says. These areas often have less congestion, lower real estate costs, and easier access to the outdoors than big coastal cities.

The boom is not just in the state capital. Harpers Office Furniture, for example, announced in September that it would relocate from Southern California to Post Falls. Construction activity in the state has been setting annual records since 1988.

The drought's impact on Idaho farmers was eased somewhat by price increases and careful management of water and crops.

Montana. This state appears poised to continue its job growth, the economists predict, building on its recent annual rate of 1.7 percent increase in employment to perhaps 2 percent next year.

Medium-size cities such as Missoula, Kalispell, Bozeman, and Great Falls are attracting "amenity-conscious businesses, retirees, and vacation-home buyers" to western Montana, the report says.

North-south trade is expanding due to the 1989 Free Trade Agreement between the US and Canada, aided by lively growth in neighboring Alberta.