Wednesday — February 4, 2004

Kempthorne
report forecasts
economic growth

Personal income projected to rise

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By GREGORY FOLEY
Express Staff Writer

A report released last month by Gov. Dirk Kempthorne forecasts moderate economic growth for the state through 2007, with service-based industries, such as tourism, leading the way.

Heidi Williamson, dealer service representative for Smith Sports Optics in Ketchum, takes an order Monday from a Colorado retailer of Smith ski goggles. Williamson said she has recently been taking 75 to 150 order inquiries per business day. Express photo by Willy Cook

In his 70-page "Idaho Economic Forecast," Kempthorne and the state’s Division of Financial Management predict that Idaho’s per-capita incomes will expand more than 3.8 percent for each of the next four years, with the state’s average income reaching $30,947 in 2007.

"Idaho’s economy began moving again in 2003 and is expected to gradually grow through 2007," the report states. "This is a welcome change from 2002, when Idaho non-farm employment declined for the first time in 15 years."

If the projections hold true, Blaine County’s economy—which is ever increasingly focused on service-related commerce—could experience substantial growth.

The report states that non-farm employment growth in Idaho will expand 1.5 percent in 2004, 1.7 percent in both 2005 and 2006, and 1.9 percent in 2007. It notes that the numbers are "subdued" in part by recent declines in the state economy’s goods-producing sector.

At the same time, per-capita personal income is projected to rise 4.7 percent in 2004, 3.8 percent in 2005, 4.6 percent in 2006 and 4.9 percent in 2007.

With manufacturing down, other sectors of the economy will be responsible for all of the job growth, the report states.

"The largest growth engine will be the services sector followed by trade," the report notes.

The services and trade sectors together make up the largest sector of the state’s economy, accounting for more than 80 percent of all non-farm jobs.

Education and health services are predicted to be the fastest growing type of industry, "followed closely" by leisure and hospitality services, as well as professional and business services, the report states.

With St. Luke’s Wood River Medical Center, Atkinsons’ Markets, Blaine County School District and Sun Valley Resort among Blaine County’s major employers, the county’s workforce could certainly benefit from growth in the services sector.

However, construction jobs—which contribute significantly to Blaine County’s economy—are projected to decline in the state during the forecast period.

The report projects that housing starts in the state will decline, in part because a recent surge in housing construction will begin to catch up with demand for new homes.

"In the course of just a couple of years Idaho’s construction sector will transition from a growth engine to a slight drag on the economy," the report says.

The projections put forth in the report rely somewhat on assumptions that the national economy—which has been slowly recovering from a pronounced recession—will generate more jobs and growth in the coming years.

"It is believed the U.S. economy turned the corner in the latter part of 2003… National job growth is expected to keep the economy moving forward, and this will have a positive impact on the Gem State."

One Wood River Valley business tied to the goods-producing sector reported this week that it is flourishing, largely because of improvements in the national economy.

Heidi Williamson, dealer service representative for Ketchum-based Smith Sports Optics, said she has received a welcome surge in product orders in recent months.

"We have definitely seen improvement in goggle orders," she said. "The ski industry seems less apprehensive to put in big orders now. We can’t keep them on the shelves."

Senate Majority Leader Clint Stennett, D-Ketchum, said this week that he supports the governor’s report.

"I am supporting it. I think he’s got some basis to stand on there," Stennett said. "We think it is a good forecast and we think the state will grow into that."

 

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