Washington's economy is far from on the mend, the recession was far deeper than anyone guessed and the Tri-Cities may yet see the worst of what's to come, said the state's chief economist, Arun Raha.
Raha told members of the Columbia-Snake Rivers Irrigators Association on Thursday that the only good news to extract from his charts and numbers is the economy is not slipping as fast as it was a few months ago.
Though the Tri-Cities seem to have missed the worst of the recession thanks to the flow of billions of stimulus dollars that buoyed the local economy, that will soon end, and the reality of the recession may strike home.
Even worse, the national economic nightmare may make a reprise.
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"There's an even chance we will slip back in," Raha said at the association's annual meeting at the Columbia Center Red Lion Inn.
The chief economist's presentation was a blend of bad news and encouragement, made visual by a series of charts to illustrate economic trends in the past decade.
Weak consumer confidence and business confidence are part of what is holding back the recovery, which Raha announced, "will be very, very slow."
Consumer confidence today is about where it was in March 2009, when the U.S. economy was in a free-fall, he said.
The economist said consumer spending is "flat," adding that July's numbers show "growth is faltering. ... That's why I'm worried," Raha said.
But while the national economic indicators show nothing is picking up, Raha said Washington has a few positives.
Rental vacancies in the state are dropping, Boeing has seven years' worth of orders lined up and software publishing is on the rebound, evident by the rehiring of many laid-off employees, Raha said.
And most encouraging: Washington's exports are strong.
Washington's exports, dominated by the aircraft industry, make the state the highest export state per capita in the nation, Raha said.
"These are the beacons of hope for Washington," he said.
Raha's economic forecast calls for a reality check: "In 2013, we'll be back to where we were in 1997. Financial markets remain jittery and the geo-political situation (globally) makes the future very fluid."
Raha said the nation still is 7 million jobs in the hole 40 months after the start of the recession, and Washington still is short 148,000 jobs, even after making up for 50,000 of them.
"This recession is clouded by uncertainty. I am very scared about the high-impact, low-probability event," he said.
As examples, Raha said Greece's economic collapse could lead to a meltdown elsewhere in Europe; the yet unknown consequences for the Middle East resulting from social media triggered revolutions demanding democracy; and the economic global aftermath resulting from the earthquakes and tsunamis in Japan.
As America's third-largest trading partner, Japan's crisis is having a direct affect on American consumers, he said.
For the state, the interruption in Japan's manufacturing, particularly of vehicles, means fewer cars and trucks purchased, and fewer tax dollars for the state's general fund.
"Five percent of our general fund is from car sales," Raha said.
But the state's chief economist had a caveat in his presentation. Forecasts at best are guesses, are always wrong and need to be corrected, he said.
"It is like watching the rear-view mirror while driving ahead," Raha said.