Patrick Jones, the executive director of the Institute for Public Policy and Economic Analysis, sees good things ahead for 2019.
“The characteristics of a somewhat robust economy for the Wenatchee area are in place,” he said, referring to a mix of historical data from the institute’s Chelan-Douglas Trend’s website and projections from the state offices of financial management and economic forecasting and revenue.
“Population growth has picked up quite a bit, more than 1 percent. We’ve seen decent income growth over the past two or three years. My hunch is that continued in 2018 and will continue into 2019. And we’ve seen pretty good sales tax growth,” he said — in the high single to low double digits. “That’s a measure of the strength of the local economy. People have income and they’re spending at pretty high rates.”
He expects that will continue into 2019 if projections from the state offices hold true.
Population growth in the two-county area is expected to continue at a rate of more than 1 percent this year. With a current population of 120,000, that would mean and extra 1,200 to 1,800 people arriving in Chelan and Douglas counties in 2019.
The state Office of Economic Forecasting and Revenue projects personal income to climb as well, calling for a 3 percent growth in per capita income this year.
The combined 1 percent increase in population and the 3 percent growth in per capita income means a total income growth of 4 percent plus for the region.
“That’s a pretty good tailwind for the local economy,” Jones said.
Smooth sailing isn’t a guarantee, though.
“We are in the 11th year of an economic expansion nationwide,” Jones said, which can’t continue forever. “The economic history of the U.S. is not upwards every year. I’m not anticipating a downturn in 2019, but I think there will be one sometime in the not too distant future.”
When it comes, he doesn’t believe it will be as dramatic as the financial crisis that lead to the recession of 2008.
“With the exception of, apparently, a lot of corporate debt, we as an economy don’t find ourselves in the same over-leveraged position we did in 2007. When the downturn happens, I don’t think it will be as steep,” he said.
He sees a bigger risk on the horizon in the trade disputes with Canada, Mexico and China.
“These three countries are big importers of fruit. If the new NAFTA agreement doesn’t get ratified and the Chinese negotiations are not successful, we will see continuing pressure on the fruit producers,” he said. “If you look at the economy of the two counties, we are tied to the fate of agriculture.”
Interest rates present the second biggest risk, he said.
“If interest rates keep rising quickly, it will have implications for the housing market,” he said. “But right now, we’re in a bit of a holding pattern. Interest rates have been put on hold by the Fed, which could reduce that risk.”
Chelan-Douglas Trends makes data accessible
Patrick Jones is all about the data.
It comes with the job.
He has been executive director of Eastern Washington University’s Institute for Public Policy and Economic Analysis since it started in 2002. The organization was created to provide regional data and analysis to help inform decisions made by policy makers, organizations, business owners, community members and researchers through a series of “Trends” websites.
Chelan-Douglas Trends launched about 10 years ago, sponsored by the Community Foundation of NCW. It’s one of nine created and updated by institute staff and students as new data becomes available.
The Chelan-Douglas Trends website is a portal to 155 measures of life in the two counties. The measures were chosen by community residents and include everything from population age and education levels to crime rates and river temperatures.
“We see what’s happened over time. Some trends haven’t changed much, like poverty trends and educational achievement,” he said.
The needle has moved in other categories, like taxable retail sales.
“It’s important to see the arc of time,” he said.
From that, trends emerge.
“For me, these are not numbers, they are stories, representing lots of different human beings,” Jones said. “You start to ask, what caused that jump or that decline?”
Answering those questions falls to the local community, he said.
Jones would have jumped on it 30-plus years ago, he said, when he was in his family business operating a chain of clothing stores.
“If I had known then what I know now through the trends, I would have made different decisions,” he said. “I certainly would have watched and paid more attention to income levels in our community. That’s a key thing. The ability to buy things and get sales tax revenue depends on what people have in their pockets. I didn’t have that luxury at the time.”
As a business owner, he also would look at population forecasts and a simple age demographic.
“Those would be the three any business owner should look at,” he said. “Your product mix depends on income and age. And your sales depend on how many people are in your community.”
The Trends website is designed to evolve.
New indicators are added every year. This year, 12 new categories were added that correspond to goals set out by Our Valley Our Future.
“It’s definitely evolving,” he said. “It’s meant to be that way. In an ideal world, I would like to hold another round of community discussions so we can check in with all these different categories to see if we are measuring what people think is important today.”