Sunday, January 22, 2006
BY BART PHILLIPS Columbian forecast panelist

A friend once asked Seattle weatherman Harry Wappler why he attracted crowds at parties.

He said people always want to know tomorrow's weather. Wappler then asked my friend, who is a Washington native, how he predicted the weather. He answered, "Why, I look out the window."

Harry replied, "Exactly, that's what I tell them."

The same can be said about Clark County's economy and its prospects in 2006. My forecast is from the vantage of the CREDC window looking out at our expansion and recruitment clients.

I see three trends continuing this year.

The first is that Clark County will continue to be an attractive location for companies throughout the metropolitan area. These clients are being driven by their need to grow or consolidate their operations. While they are looking at either expanding at their current location or at other Oregon sites, Clark County seems almost automatically on the short list.

In 2005, companies such as Concannon Paper, Plexus Software, Wheelmaster, and Xtremz were growing metro firms that found the facilities, cost advantages and business environment in Clark County to their liking. This trend will continue in 2006.

The lesson here is not that Clark County is an attractive option for expanding Oregon companies, but that when a firm needs to expand they become essentially footloose. The diligent firm looks at all options if they must move, and the cost of a move across state lines is similar to a move across the street. If the move across the street has a better business environment, all the better.

The same lesson holds for expanding local businesses. The development council has seen companies looking for the best location move to Cowlitz County and elsewhere in the metro area. As a result, elected officials and economic development officials need to focus on serving our existing businesses equally with recruitment.

Expansion opportunities

The second trend is that our local businesses continue to grow to take advantage of the opportunities created by an expanding national and global economy. Business is up, profits are up and that is resulting in capital investment, and acquisitions to increase capacity. These investments are happening across all sectors from construction and services to manufacturing. It has led to Clark County having the fastest job growth in the metropolitan area (5 percent versus 3.3 percent regionwide). Expansion in our professional/business services and construction industries is resulting in new employment.

While the CREDC sees significant recovery and investment in the manufacturing sector, job growth is flat. The reason is simple. Investments are for advanced processes that increase productivity. Manufacturers are producing more with less. This trend will continue, and while the manufacturing sector will strengthen, net employment gains will remain modest.

Gaining ground

The final trend is that Clark County continues to increase its competitiveness for business recruitment and expansion. By our tally over the past five years, we have increased our net available "shovel-ready" industrial land from 807 acres to more than 1,250 acres. This is due to private investment in industrial parks such as Birtcher Business Center in Vancouver, the Ridgefield Commerce Center, 99th Industrial Park in Battle Ground and others. This offers a huge competitive advantage in a fast-paced investment environment.

Our second advantage is the can-do approach of local governments in assisting business development investment. There may be differing points of view on this issue, but the business public needs to know that the cities and the county are the most responsive in the metro region, and this provides a huge advantage for economic development.

From my window, the only potential threat to economic expansion in Clark County this year would be national or global economic trends beyond our control. Outside the residential construction industry, all of our basic economic sectors are closely tied to national and global markets. If those remain positive, 2006 should be a prosperous year.

ECONOMIC DEVELOPMENT: What might happen 20 years from now

The best predictor of Clark County's economy in 2026 is to extrapolate trends since 1990.

The county will likely continue to have the most robust economic growth in the metropolitan area. To some extent that growth will be on two fronts -- the sector serving the growing population such as retail, and the traded sector, which brings new revenue to the local economy by selling into national and global markets.

Traded-sector growth will be led by high-technology industries and professional services such as software, engineering and consulting. Manufacturing will continue to decrease as a percentage of local employment due to increasing productivity. However, we will retain strong manufacturing clusters with specific expertise in niche markets such as semiconductors, metals and machinery.

Environmentally, we will see a number of changes.

First, the morning commute north will balance with the commute south as more and more jobs are created in Clark County. I do not predict a decrease in the 45,000 commuters heading south, but I do see a significant increase over the 20,000 commuters that come to Clark County.

Capital expansion will be increasingly vertical, especially in downtown Vancouver as the city recaptures the waterfront and professional office and residential development accelerates.

The Discovery Corridor north along Interstate 5 to Woodland will become a reality, and we should see build-outs of industrial areas in Camas, Ridgefield and Battle Ground fueled by improved transportation access and the availability of developable land.

Vancouver and Clark County will be a robust metropolitan community. Those in Portland will ask, how did they do that? It will be the result of vision, focus and the dint of hard work.

The outlook for 2006

* Clark County will continue to attract businesses from the Portland metro area looking for space to grow.

* Clark County businesses will continue to take advantage of expanding national and global markets.

* Countywide job growth at 5 percent a year should continue to outpace the regional job growth of 3.3 percent.