Home Builders Association: Tri-Cities economic outlook appears to be bright

Spring thaw had a very relevant meaning this year in Tri-Cities as our region was completely covered with snow and ice for a month. What did that mean to our construction economy? A complete shutdown for breaking ground on new homes.

Deadlines will have to be extended, which could cost more, not to mention the layoffs during the slowdown that have a lasting effect on consumer spending loss. It will take a few months to fully realize how our economy will be affected but, in the end, it will have a negative effect as the rest of the year all efforts will be trying to make up time and money lost.

As I look back at 2018, it was another strong year in new single-family homes being permitted with a slight increase over 2017 of 1.3 percent to 1,466 total permits pulled. The change in average value of each permit also rose 5 percent to $306,520. I feel that this trend will continue in 2019, and new home starts will continue at a strong pace of 1,400 to 1,500 for the year.

Several factors show that Tri-Cities will buck national trends again and are indicators of a strong year. Population growth in Benton (1.9 percent) and Franklin (2.6 percent) counties continue to outpace the state (1.4 percent) and national (0.8 percent) rates. This population growth, coupled with a strong local jobs report and a decreasing unemployment rate, point to an expansion in economic growth locally.

The jobs report is a great key and will help drive high consumer confidence in Tri Cities. The federal tax law changes are now putting more dollars in the pockets of consumers, adding to disposable income further driving our economy positively.

Other factors that may have some negative influence on the buying mood in Tri-Cities could be the end of the nation’s second longest economic expansion that is now in its 117th month. Gross Domestic Product is predicted to be down from 2.9 percent in 2018 to 2.5 percent in 2019 and 1.3 percent in 2020. The Consumer Price Index increased in February by 0.2 percent to 1.5 percent. If this trend continues and reaches 2 percent, it may hold off a couple of projected Federal Reserve rate hikes. A bearish stock market in 2019 could leave many with a much more pessimistic outlook, further delaying possible large and small consumer purchases.

All things being considered, Tri-Cities will continue to be a very bright spot in Washington state.