'We can diversify the local economy beyond construction and tourism' | Forecasts for 2010
January 26, 2010 · 2:24 PM
By VICTORIA COMPTON
and BILL WATSON
As we in San Juan County enter 2010, many people are wondering what will happen this year in our local economy. While in some ways it’s anyone’s guess, a few trends do suggest themselves.
First, let’s hope that as the world and national economies stabilize, they do not take another significant dip (a “W” instead of a “V” recovery). The national financial services sector may be the determining factor whether we have another dip or not, as we watch the national and consumer debt levels and the value of the dollar.
If these sectors stabilize (the “V” scenario), the housing market should solidify with prices holding and sales volume starting to pick up. The Washington state unemployment rate should flatten and begin falling.
The national economy will determine much of our local real estate market recovery by determining if off-island buyers feel comfortable enough to invest in second and retirement homes. These same “off-islanders” are needed to restart our single-family home construction recovery.
Tourism may remain slow as individuals recover some of their lost wealth and regain their comfort with vacationing. Construction and tourism are the top two drivers for our local economy, and our top two employment sectors. Over 27 percent of all state and local retail tax dollars in San Juan County are generated by tourists. Construction alone generated nearly $160 million in retail sales for San Juan County. As these sectors recover, local municipal spending will also recover.
Best-case scenario is stabilization of the local economy with a slight recovery in the traditional industry sectors and thereby the local “public” revenue streams.
But, what is recovery? Do we simply want to return to the economic state and methods that led to the recent economic collapse, or are we interested in taking this opportunity to expand beyond the traditional drivers of our economy? Our local economic challenges in the future include recovering our traditional industries (single-family home construction, real estate, retail, tourism and the municipal sector) while we begin to increase the year-round sustainability of the local economy.
First, to recover jobs in our traditional industry sectors we’ll need to continue importing dollars by expanding and better targeting tourism and real estate promotion. This will maintain our competitive high ranking as a tourism and second-home destination.
Second, we need to increase our self-sufficiency. We can do this by increasing and improving our inter-island transportation and storage facilities, our communication and by enabling businesses to better fulfill our needs with local products and services. Increasing business-to-business awareness and “shop locally” values applied to businesses will all contribute to strengthening our economy and community.
We can diversify the local economy beyond construction and tourism, and maintain agriculture as a locally sustainable industry sector. As we improve these sectors of our economy, new jobs will be created. This will increase the local “multiplier effect” which keeps more local dollars circulating in local hands. We can become more open to expanding businesses that will improve year-round sustainability, and target businesses that complement the islands’ values.
Lastly, we can protect our community’s natural resources and beauty while streamlining our local land-use regulations to make the rules and processes effective and efficient. These efforts will enable our community of businesses and citizens to maintain their quality of life and sustainability.
— Victoria Compton is director of the San Juan County Economic Development Council. Bill Watson is her predecessor.