BIZTIPS - February 25, 2007
Biz Tips: Economic Outlook Great, With Reservations
Sunday, Feb. 25, 2007
By Art Hill
By the time Mike Thorne adjourned this year's Pendleton Chamber Economic Development Outlook breakfast, about two hundred area business leaders were a lot smarter. Smarter about biofuels thanks to Al Gosiak, about telecommunications thanks to John Irwin, about downtown development thanks to Brad Sinn, about regional and national economic realities thanks to economist John Mitchell.
The take-away message was "keep moving." Move forward on biofuel production, but plan carefully to maximize benefit to local producers. Move forward on broadband expansion because it is as critical as rail and highway access to 21st century economic development. Move forward on downtown development because all signs point to prosperous growth.
And last, but certainly not least, Mitchell's assessment of regional, state, and national trends painted a picture of sustained economic expansion, with a list of cautions.
Not surprisingly, the list starts with political instability in "developing" nations. Instead of developing, some have slid into chaos. Unfortunately, they control natural resources vital to the rest of the world. The next is the national financial outlook for continued interest rate inversion (short term rates higher than long term rates). Rate inversions preceded five of the last seven recessions. Third, the U.S. housing market continues to bump along at a dismal rate of contraction.
On the brighter side, high energy prices are encouraging alternative energy development. In this 6th year of economic expansion, our national unemployment rate is only 4.6% and inflation is holding around 2.5%. Oregon ranks a solid 18th in the nation in new job creation and 5th in home price appreciation.
Bringing it down to local impact, national population flows to the South and West gave Oregon a 1.6% net increase in workers and families. Despite regional declines in population and food manufacturing employment, some new plants are coming on-line. Oregon continues to develop its strong export markets, especially in Asia. Location and infrastructure expansion, especially in telecommunications, point to continued gradual economic expansion.
The picture at next year's breakfast could be completely different, for better or worse. But for now, the lesson is to keep moving our economy forward through careful planning, awareness of risks, and flexibility as long-term trends play out. It's neither the best nor the worst of times, but it's up to us to make the most of it.
Content © 2007 East Oregonian