It would appear that our old friend Bill Virgin (formerly of the print P-I), is now writing a weekly column for the Tacoma News Tribune. Here are a few excerpts from his latest piece regarding what we may expect to see in store for the local economy in 2010: 2010 recovery will hinge on confidence
What will get the economy going in 2010?
Conditions would seem to be ideal for a decent recovery, if not a sharp snapback. Interest rates are low. Energy prices are comparatively low. Deferred spending and depleted inventories mean pent-up demand. A weak dollar against other currencies ought to make our exports more attractively priced and our products more competitively priced here at home.
What’s missing is an intangible – confidence. Lots of companies report increased activity in the form of requests for quotes. But everyone’s waiting for everyone else to make the first move to translate those queries into actual orders and purchases. They all want to be convinced the worst is over and the rebound will be real – and they’re waiting for proof in the form of someone else taking the lead. Get confidence back, you’ll get your recovery.
It’s good to see Bill’s voice getting out there again. It’s interesting that he brings up confidence. The problem of confidence is something that seems to be coming up a lot lately…
In another article posted today by the Bellevue Reporter, Seattle economists predict slow recovery in 2010
The days of banking on high-risk investments are over, at least until our short-term memory problems allow for the next economic bubble.
But don’t expect history to repeat itself any time soon. Economic forecasters predict a slow recovery from the massive recession that tore through world markets last year.
Pent-up demand normally creates high levels of snap-back growth after a recession, like the one in 1982. But that isn’t likely to happen this time around, according to Michael Dueker, head economist for Russell Investments North America.
“It’s time to pay the piper for the fact that we’ve had a financial crisis,” he said during a recent economic-forecast conference in Seattle.
Bottom line: credit is hard to come by, and 90 percent of the U.S. gross domestic product is dedicated to bailouts and stimulus funding, which keep our economy afloat, but make it hard to bounce back.
The future doesn’t look so bright for real estate and development.
Around 38,000 construction jobs were lost last year, and home values dove a minimum 25 percent in most cases.
Jim DeLisle, director of graduate real-estate studies at the University of Washington, predicts the housing market may take another 18 months to bottom out, while it could be another four years before anything significant happens on the development front.
Worse yet, DeLisle predicts a debt crisis on the horizon for commercial real-estate owners.
“We’re not out of the ballpark,” he said. “This isn’t over yet.”
DeLisle also suggests a new crisis looms in the form of bullet loans coming due within the next few years.