Q&A: 2003 business forecast
What is your economic outlook for the Rogue Valley in the coming year?Joe Danelson,
U.S. Bank regional vice president
I'm positive about the economic outlook for the valley.
The demand for commercial real estate continues to be pretty strong so the construction sector should remain strong. The residential housing is relatively healthy and real estate values are holding up well.
It's a little mixed on the manufacturing side. Commodity prices continue to be a little weak. But we still have a relatively healthy manufacturing sector in the valley. And employment looks relatively good.
Consumer spending is the main catalyst for economic growth in the Rogue Valley as it is nationally.
There are going to be some building projects, and there are more that are on the drawing board. I anticipate those will happened because interest rates remain very low for commercial construction spending.
personal finance teacher at South Medford High School
I think we're going to do OK. There are going to be a lot more service-oriented jobs. I think it will still take a while to turn the economy around. I don't think we are going to experience more of downturn in the valley. It will be flat for a while, but then things will pick up.
People are still spending money. We don't have a problem getting local businesses to donate money, even though everybody is asking for money. All the businesses seem to be positive and upbeat about it, although employment levels haven't risen. I haven't heard anything negative as far as the outlook.
What could change things is if the national economy gets worse. Oil prices are rising, which is going to hurt the standard of living here. California's economy is going to keep sluggishly along and that will keep things down as far as real estate prices that go up when we have a lot of people coming in.
We're in a deflationary period so prices are being held down. That's good for consumers as long as they keep their jobs.
Oregon Economic and Community Development Department
I don't think it's predictable. The economy next year is tied to one word ' Iraq.
One prospect is there will be negligible impact; it will be settled quickly and uncertainty removed from the market. Under that basis, we will probably have a year better than this last one. And this one probably wasn't all that bad. Go back 20 years and 5 percent unemployment would've been considered pretty good.
The other scenarios revolve around nonsettlement traumas, which means anything from huge federal deficits to prolonged campaigns with casualties. In that environment there are too many uncertainties. I don't think it's likely we'll see robust expansion under those circumstances.
regional economist for Oregon Employment Department
I think we will resume growth in 2003, and there are a number of reasons why I feel that way.
Our economy is a bit tourism based and activity will resume. The California economy is fairly healthy and being linked to the Interstate 5 corridor, we're pretty dependent on the California economy. In the 1990-91 recession, we were affected in those years. This recession hasn't impacted California heavily outside the Silicon Valley's high-tech companies. Plus, the downturn in the airline industry has been protracted, and there has really been a shift in how people prefer to travel. Because of that shift to ground transportation, car sales and motor-home manufacturing have been fairly strong. I think that bodes well for the Rogue Valley. We're in convenient location between San Francisco and Portland. With the threat of terrorism people are leery about what will happen outside our borders; I think that will tend to keep people closer to home. Previously, people were thinking about taking off cross country and overseas.
senior housing developer and PremierWest director
I would say I'm very excited about this next year. The general feeling is that Medford's unemployment is somewhat high compared to rest of the nation. But our construction and home building hasn't slowed. We see even more aggressive growth. At PremierWest, we expect profit to increase by 50 percent next year.
We're projecting that interest rates will remain low. More than any other factor, that will contribute to the valley's rebound. Economist John Mitchell says he is really pumped. Oregon is already in its rebound, and people don't even know it.
I'm in the long-term care business, and there are some negatives. Effective Feb. 1, state budget cuts could and likely will affect long-term care and assisted-living business with Medicaid cuts. Some people will go out of business. In the longterm, the state moratorium in effect on new assisted-living facilities is beginning to firm up some of the occupancies.
CFP, CLU, LUTCF Certified Financial Planner
2002 will conclude with an unprecedented third year in a row of market downturns. Many of my clients are very concerned, but I believe good news is in their future.
The most recent seasonally adjusted Consumer Price Index is up for November and was also up in October. Interest rates are at a 41-year low, and inflation is averaging about 1.4 percent. We have a tax-cutting president and a Congress that is pro-growth. Productivity has increase over the last 10 years by more than 2.5 percent annually. Lots of high-quality, high-dividend paying and relatively inexpensive stocks are available. These all add up to much better days ahead for all of us in the valley and the nation.
Now if we only had a freeway with more than one lane, then 2003 would be wonderful.
Q&A appears Mondays on the Mail Tribune's Business page. It provides local leaders an opportunity to address timely issues in the business community.
To suggest a subject for this column, please contact business reporter Greg Stiles at 776-4463 or e-mail