From a small northwestern observatory…

If you’re in business in Western Washington (as we are), then the quarterly Puget Sound Economic Forecaster by Dick Conway and Doug Pedersen is must-reading. The latest issue just hit my desk, and given the current state of flux, it’s worth reviewing.

You have to get to the back page to find what I consider to be the most interesting graphic — a chart of Puget Sound Leading Economic Indicators dating back to the early 1970’s. The era is marked with 5 recessionary periods — 1974, the “hic-cup” recessions of 1979-1982 and 1990-1992, the “9/11” recession (which really started in late 2000) and the current mess, which dates to 2007. Intriguingly, in each of these periods, the index turns downward well before the beginning of the recession. Of more interest, the index turns upward well before the end of the recession (as it has now) and turns into a sustained multi-year period of growth which carries it to a new peak. If you’re a chartist (as I am) this is interesting stuff.

C & P note that the Puget Sound region — despite its famed economic health — actually had a somewhat worse time than the nation as a whole during this recession. We lost 7.4% of our jobs during this period, compared with 6% for the U.S. They suggest this means that the region will trail the nation as a whole coming out of the recession. I concur with them that the region lost disproportionately in construction and finance.