USA Today painted a bright picture of the Idaho economy Thursday. But c'mon. Is it really that rosy?
The nation's housing slump has caught up with the Treasure Valley. This past summer, Micron Technology Inc. laid off more than 1,100 workers. Average wages remain among the nation's lowest.
But economists who track Idaho's economy say these are mere stumbles. They agree: The accolades USA Today heaped on the Gem State are deserved.
"This is a pretty strong economy despite some of the blows we've had," Boise economist John Church said. "It's not as bad as it might look. The jobs we've lost are only a fraction of what we're gaining."
Boise economist Don Reading agrees, though he believes the future inevitably will bring dimmer times than the article suggests.
"At some point, it will run out," Reading said. "The economic reality is that it cannot go on forever."
Growth is slowing, and that means the glut of unsold homes will last longer, he said. And growth continues to be uneven, bypassing rural Idaho. Meanwhile, new burdens will be put on the economy as the population grows, he said.
"As more people move in, costs go up, traffic goes up and we put more stresses on services," Reading said. "Crime and all the other things people moved here to get away from will continue to grow."
It's already harder for average people to live in Idaho than it was only a few years ago, he said. He points to the increase in housing costs in Ada County.
"From 2000 to 2006, the median price of houses has gone up better than 50 percent, but the real median family income is still about the same," he said. "We're still a low-income state."
Economist Bill Conerly, of Conerly Consulting in Lake Oswego, Ore., said Idaho's problems — especially the housing slump — aren't as pronounced as they are in other states.
"There is an overhang of houses, but the overhang is everywhere," said Conerly, who will be the keynote speaker at the Boise Metro Chamber of Commerce's Economic Outlook Forum Nov. 13. "But Idaho's rapid population growth should absorb excess houses much better."
He added, "We will need a pause in home appreciation to let incomes catch up."
Conerly said the state's biggest challenge is something usually considered good: a low unemployment rate. It means companies that want to expand can't find the employees they need.
"It's the nicest set of problems to have," he said.
Idaho state economist Mike Ferguson, who told USA Today that he doesn't see Idaho's "spectacular economic run" ending any time soon, said the state has a well-balanced economy, including a strong agricultural sector that can help offset problems.
"Why is Idaho doing so well? A big part of it is that we're blessed with low energy costs, we have a pretty efficient public sector and a not overly burdensome regulatory environment," Ferguson told the Idaho Statesman.
"And one of the things we hear over and over again is how impressed companies are with our labor productivity."
Even when setbacks come, Idaho can rebound quickly, Church said.
"We're a relatively small economy, so it doesn't take too much of an in-migration change to change the scale from negative to lackluster to very vibrant and growing," he said.
Ken Dey: 672-6757
