Clark County’s fundamental employment picture became more mixed in the second quarter ending in June as construction continued to cool and other sectors generated slower growth. Experts predict that things could worsen before they improve as our community absorbs the housing slowdown and related concerns about the local financial industry.

But the bark may be worse than the bite, says Portland economist Bill Conerly.

“I don’t see it as quite as bad as the talk I’m hearing,” Conerly said. “People are gloomier than the actual situation. … Maybe that has to do with (high) gasoline prices.

Conerly put the numbers in perspective.

“The U.S. unemployment rate at 5.6 percent is not that bad and is actually low by historical standards,” he said.

“What we’re in now is not nearly as bad as other recessions. Inflation is a problem, but nothing compared to the early 1980s. And as for the Northwest, this is a good place to be in this downturn.”
That’s because the region’s exports are benefiting from a weak U.S. dollar. Grain is flowing offshore. Boeing is selling planes.

“Our housing downturn about matches the national decline, but we’re going to come out of this a lot sooner because our boom was much milder,” Conerly said. “We’ll absorb the inventory more quickly, and builders will recover.”

So, how did the second quarter treat Clark County?

• Employment is growing, but at a slower pace of just 1 percent a year.
• Home sales are slow, but prices haven’t dropped much as the standoff continues between sellers who don’t want to lower prices and buyers waiting for a bargain.
• Business services (accountants, lawyers, computer design, R&D) added 600 jobs in the county in the 12 months through June. That’s a healthy 4 percent annual growth rate.
• Health care added jobs at a nearly 3 percent rate, up 400 new jobs this year.

“Construction is the big negative, year over year,” said Scott Bailey, labor analyst with the Washington Employment Security Department. “Retailing is little changed; manufacturing is flat. The support for (consumer) consumption for consumption’s sake has pretty much dried up. Instead, we have people’s balance sheets not looking as good because their home values and wages aren’t going anywhere,” Bailey said.

Spending at Clark County stores was down a significant 5 percent in the first quarter, compared with 2007. But Bailey said this region still has “a little more growth trajectory than the nation.”

Bailey sees more slowing before things improve.

Conerly said he sees record-high gasoline prices weighing on people’s psyche.

“A lot of the reason for that is we buy gas so frequently,” he said. “Meanwhile, apparel costs are actually down, but we don’t notice that.”

As for the local job picture, the unemployment rate reached 10 percent in the aftermath of the dot.com crash and 911 downturn as hundreds of manufacturing jobs were eliminated in aluminum, paper and high-tech.

At 6.5 percent, June’s Clark County unemployment rate looked downright good. But many residents feel less secure about their jobs, and that’s cutting into consumer spending.

“Most folks have figured out that this is a good time to be cautious,” Conerly said, “not take on new debt, not to touch their 401(k) accounts and not to sell stock in this down market.

“But honestly, if you have to be anywhere in a downturn, you want to be in a place with a lot of exports, a place that grows a lot of grain. And that’s the Northwest,” he said.

JULIA ANDERSON is The Columbian’s business editor. Call her at 360-735-4509 or send e-mail to julia.anderson@columbian.com.