NAPM Regional Economic Update January 15, 2013

Grant D. Forsyth, Ph.D.Chief EconomistGrant.Forsyth@avistacorp.com

The Regional Economy: Looking for Green Shoots

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U.S. GDP Growth Forecasts to 2017

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

2012 2013 2014 2015 2016 2017

Ann

ual G

row

th

Average of GDP Forecasts

High

Average

Low

Source: IMF, Global Insight, Economy.com, FOMC, Bloomberg, Blue Chip, Wall Street Journal, WA Governor’s Council of Economic Advisors, The Economist, and author’s calculations.

Unemployment Rates, 2011-2012

Source: BLS and author’s calculations.

9.6%

6.6%

12.2%

7.9%

8.9%

6.5%

11.1%

8.7%

0%

2%

4%

6%

8%

10%

12%

14%

Spokane+Kootenai, ID-WA

Whitman, WA 6-Border Benton+Franklin, WA

Unem

ploy

men

t Rat

e

2011

Est 2012

U.S. Unemployment Rates by Cohort, 2012

Source: BLS and author’s calculations.

7.8%

11.7%

8.0%6.9%

3.9%

7.9% 7.8%

23.5%

0%

5%

10%

15%

20%

25%

Unem

ploy

men

t Rat

e

Non-Farm Employment Growth, 2009-2012

Source: BLS and author’s calculations.

-0.1% -0.3%

1.9%

0.5%

2.2%

-1.8%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Spokane+Kootenai WA-ID Nez Perce+Asotin ID-WA Benton+Franklin, WA

Annu

al G

row

th

2011

Est 2012

Non-Farm Employment Growth Forecast, 2013

0% 0.8% to 1.2% 2%

Worst Case Central Range Best Case

2013

Population Growth, 2011-2012

Source: U.S. Census, OFM, and author’s calculations.

0.6%

-0.3%

0.6%

3.3%

0.6%0.4%

2.6%

1.6%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Spokane+Kootenai 6-Border Counties Whitman Benton+Franklin

Ann

ual G

row

th

2011

2012 Est.

Population Growth Forecast, 2013

0.3% 0.5% to 0.8% 1%

Worst Case Central Range Best Case

2013

Spokane Taxable Sales Growth, 2008-2012

Source: WA DOR and author’s calculations.

-2%

-5%

-1% -1%

2%

-6%

-9%

-1%

6%

4%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

2008 2009 2010 2011 Est 2012

Ann

ual G

row

th

Spokane City ROC

0% 1% to 2% 3%

Worst Case Central Range Best Case

2013

1% 2% to 3% 4%

City

ROC

Taxable Sales Growth Forecast, 2013

Spokane Real Median Household Income and Spending, 2004-2011

Source: OFM, BEA, and author’s calculations.

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

2004 2005 2006 2007 2008 2009 2010 2011 Est

Real

Dol

lars

, (20

05 B

ase

Year

)

Spokane Taxable Sales/Household Spokane Median HHI

+9%

-2%

-20%

-9%

Existing Home Price Growth, 2011-2012

Source: FHFA and author’s calculations.

-6.4%

-8.8%

-0.2%

-3.5%

-2.3%

-0.2%

1.0%

-0.8%

-10%

-8%

-6%

-4%

-2%

0%

2%

Spokane, WA Kootenai, ID Benton+Franklin, WA U.S.

Annu

al G

row

th

2011

Est 2012

Existing Home Price Growth Forecast, 2013

-3% -1% to 1% 3%

Worst Case Central Range Best Case

2013

-2% 0% to 2% 4%

SPK

KOOT

Spokane+Kootenai Bank Performance, 2Q 2008-2Q 2012

Source: FDIC.

2.5%

6.5%

9.2%

4.8%

2.9%

0.3%

-1.2% -1.6%

0.5% 0.9%

-4%

-2%

0%

2%

4%

6%

8%

10%

2Q 2008 2Q 2009 2Q 2010 2Q 2011 2Q 2012

Noncurrent loans to loans Pretax ROA

Spokane+Kootenai Growth in Residential Units Permitted, 2011-2012

Source: Construction Monitor and author’s calculations.

0.3%

8%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

2011 2012

Annu

al G

row

th in

Uni

ts

Top 20 Spokane-Area Construction Projects, Journal of Business, 2012

Source: Journal of Business and author’s calculations.

Government, 55%

Private Sector, 45%

Top 20: $245 Million in Permit Valuaitons

Monthly Leading Indicator, 2011-2012

Source: WA ESD, Economagic.com, Census, and author’s calculations.

60

65

70

75

80

85

90

95

100

105

Spokane-Kootenai Regional Leading Index, March 2004 = 100

Washington Per Capita Federal Procurement Dependency Relative to U.S., 2010

Source: Census, BEA ,and author’s calculations.

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

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Benton-Franklin ($12,400), Klickitat, Kitsap, Garfield, King.

Spokane ($788)

U.S. ($1,670)

The Regional Economy: Looking for Green Shoots

Your are not here…yet..