Economic Outlook: It’s Complicated
Grant D. Forsyth, Ph.D., Chief Economist for Avista gave a riveting talk at the November, Medford Chamber of Commerce Forum to over 200 business people. The title of his talk was “Economic Outlook: It’s Complicated”.
He presented several slides to prove his title to be true. Our Economy in Southern Oregon is complicated.
He started with one slide that showed two indexes overlapped. One index was our partisan conflict, news-based, from January 1981 to today. The second index is the Economic Policy Uncertainty Index, news-based covering the same time period. Our partisan conflict was half what it is today on 9/11/2001 and our Economic Uncertainty Index was at the same high that it is today. He said that the only thing he can tell from this data is that “We don’t like each other and we can’t figure out what’s going on”
In his job as Chief Economist at Avista, he looks at GDP Growth and Inflation and then the Employment Growth and then he looks at Population Growth and Demographics and finally Permitting and Housing to create his load and customer forecasts for each cycle.
He showed us that the U.S. GDP growth from 2016 to 2021 (projected) was falling from a high of 2.9% to an estimated 1.9% based on Weak Global Growth, Weak Industrial Production, Trade Uncertainty, and Political Uncertainty.
He also showed us that Rogue Valley Non-Farm Employment Growth from 2015-2019 was dropping from a high of 3.3% in 2015 to 1.2% in 2019, while the Jackson County MSA Real Wage Growth, 4Q moving average was higher than the US average by almost 1%.
He then explained how the Rogue Valley Employment Contribution changed from 2009 to 2019 with Private Service Providing businesses growing from 78% to 82% while Government Employment dropped 6%.
Healthcare Jobs grew 18% in the last 10 years in the Rogue Valley. He stated that “Economic Health of a community depends on what’s happening in health care”
At the end of his somewhat somber talk, he received a couple of great questions from the audience which he answered quickly and succinctly.
He then shared that he was concerned about rolling power outages in Northern California and what will happen with Utilities and Government as they struggle to figure out what to do. He was also concerned about the data he was seeing from the transportation industry. Trucking was down across the country. Trying to end on a good note he also stated that “The recruitment of jobs to a community is based on how good your schools are.” and that we have some great schools in Southern Oregon.
I had the pleasure of sitting down with him after his talk for about an hour and I found him to be very nice, intelligent and unsure about our future. He liked seeing that we have residential units permitted for workforce housing and that our home price growth was ⅓ of the San Fransisco MSA Median Sales Price but our population growth in 2018 was only 102% compared to 136% in Josephine County.
I left the meeting and interview feeling like 2020 will be a heck of a year. It will be filled with fear, uncertainty and doubt and a lot of opportunities and if we all work together, we will come out stronger, better and ready for even more growth in the years ahead.
You can reach Grant at Grant.Forsyth@avistacorp.com for more info on his presentation.
By Jim Teece