An imminent economic recovery is like an awkward first-date – no one wants to commit too early and no one wants to wait too long.
Many are watching national and international exchanges for a hint of the future; others look closer to home at the number of jobless Washingtonians in our community.
Everyone is wondering what the recovery, when it comes, will be like. Will we recognize its arrival? Perhaps not if we rely on the indicators we used coming out of the last two recessions.
With headlines beginning to declare the end of the so-called Great Recession, I'm reminded of a metaphor Portland economist Bill Connelly used during a session earlier this year at the Heathman Lodge to describe the downturn – a pothole. Once you enter the pothole, he said, you are technically in recession. Once you hit bottom, you stop falling. On making your way out of the hole, your first foothold to boost yourself up is the recovery. Note: the length of the recovery depends on the depth of the hole.
At the VBJ, most business people tell us they think the economy hit bottom some time ago – maybe just a few weeks back, definitely no more than a couple of months. Many go on to say it feels more like bouncing along the bottom than climbing out. Yet we hear from others that the first foothold is in place and the recovery has begun.
If the recovery seems more like a stone skipping over a pond than a rebound, what else can we expect in this economy?
One perspective on our region's economic future comes from recent work done at the Columbia River Economic Development Council. During a four-week period this fall, CREDC president Bart Phillips met with 14 focus groups of its investors. Organized roughly by industry, the intent was to determine a new road map for our region's economic development. And out of those meetings came a view of what our local business leaders are expecting.
Here are the 10 top trends coming from these industry-focused discussions: First, the primary focus of the banking sector will be to collect, not lend, money; real estate development will take a sabbatical as credit markets continue to slowly thaw and inventories are absorbed; public-sector projects funded by federal stimulus money will continue to move forward in the near-term; long-term development financing is all but gone due to the abandonment of Commercial Mortgage Backed Securities; manufacturing will remain a strongly-performing component of the economy; and for the healthcare sector – the gig is up, since the healthcare community cannot shift uncompensated service to the insured any longer.
While this report is not a comprehensive view of what the recovery will hold in store – it is an informed view from the economic trenches and a glimpse of the economy to come.
To see Phillips' perspective on these trends, check out his blog at