Idaho’s Division of Financial Management (DFM) released its latest economic forecast today and the news is gloomy. The probably of slipping back into a national recession is higher than it was just three months ago. “In the previous (July) forecast, the probability of the economy slipping into a recession was 25 percent,” says Derek Santos, chief economist. “The probability of a recession was raised to 40 percent in the current forecast.”
Santos writes the state’s economic recovery stalled more than expected this last spring and summer. Advancements in job creation are now predicted to be slower through 2014. For example, Idaho’s non-farm employment was forecast to grow two percent in the second quarter of this year, but it didn’t.
“The economic recovery had its second anniversary this summer”, says Santos. “Instead of being a milestone to celebrate what has been achieved, it served as a reminder of how much more is to be accomplished. The economy should be further along the road to recovery than it is.”
Santos writes all housing-related sectors are still the hardest hit in Idaho. This latest report has lowered expectations for job growth in the logging and wood products industries, construction, goods production, trade, non-goods and federal government.
The bright spot in Idaho’s economy is in the mining industry. Santos says mining’s ‘second wind’ is due to high metal prices. Moth-balled mines are now reopening. The Department of Labor reports renovation has started at the Star Mine, which was closed for 15 years. The mining industry is expected to add 500 jobs by 2014.
The division releases four forecasts each year. The report is based on data from the worldwide forecasting firm IHS Global Insight.