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2010 economic forecast: Cloudy job conditions with uncertain recovery
The forecast for 2010’s economy is less optimistic and more realistic: Americans have more suffering to do before the healing begins.
The Federal Way Chamber of Commerce presented its annual Economic Forecast Breakfast on Jan. 30 at The Commons mall. A panel of regional business leaders discussed trends and outlooks for 2010.
At the core of conversation was the great recession’s economic toll in 2009. The consensus was that in 2010, a promising sign of recovery would come later rather than sooner.
Following is a sample of points made by panelists.
David Allen, executive vice president of McKinstry, said the Puget Sound region is ahead of the curve in green jobs and technology.
Green jobs involve energy audits, engineers, skilled craft workers and environmental consultants. He said that $1 million in energy efficiency work can create 15 to 22 jobs. The region must fight to win and keep job “clusters,” he said, praising Federal Way’s health care incubator as a wise investment in a growing industry.
Trade and transportation
The Port of Seattle is a regional economic powerhouse responsible for thousands of jobs. The port afaces stiff competition from Vancouver, B.C., said port president Bill Bryant: “We don’t want to lose what we’ve got.”
Between 10 to 15 percent of the world’s shipping fleet sits idle, he said. World trade has plummeted in the slow economy, although the Port of Seattle is faring better than other West Coast locations such as Los Angeles and Long Beach. The Port of Seattle, which also includes Sea-Tac airport, is focused on increasing port traffic which was down more than 8 percent last year.
“We are disserved by a hyperpartisan political culture,” said Aaron Reardon, Snohomish County Executive.
The former legislator said state government needs to take a more competitive attitude in luring businesses — and keeping businesses from leaving. “The problem was, they stopped,” he said of state lawmakers. Reardon cited the recent loss of the Boeing 787 construction to South Carolina as one example of this shortcoming.
In the next 18 months, 500 more banks are expected to close, said Brian Vance, president and CEO of Heritage Bank.
Last year, 140 banks closed, he said.
Banks want and need to make loans. The nation will not see economic recovery until the housing market stabilizes and unemployment (currently around 10 percent) goes down. “We still have a ways to crawl out of this mess,” he said.
Richard W. Davidson, president of Coldwell Banker Commercial, arrived from New Jersey to serve as the event’s keynote speaker.
“We were all enjoying the ride,” he said of the real estate boom of 2000 to 2005, which saw a 61 percent jump in median home values. “The wealth we were building, we were building on debt.”
Commercial real estate has racked up billions of dollars in debt with no recovery sighted until 2011, he said. The real estate market has seen a 90 percent decline in volume since 2007, and commercial mortgage backed securities have nearly disappeared.
However, residential prices were up 1 percent between January 2009 and November 2009, said Davidson, whose company controls 10 percent of the U.S. market.