Nicholas D. / Flickr
Storm clouds roil over downtown Boise.
If you spent an evening walking around Boise, asking people about the economy, the housing market, and how they’re feeling about all of it, what would you hear? Well, we did that, and here’s your answer. It’s a bit unsettling.Â
Molly Messick
A sign advertises a foreclosed home in Nampa, Idaho’s Blackhawk Subdivision.
The Idaho housing market’s boom and bust is sure to be a long-term focus here at StateImpact. RealtyTrac’s August numbers, out last week, show that Idaho has the fifth highest rate of foreclosure in the nation. The Boise area has seen the worst of it, with foreclosures concentrated in Ada and Canyon Counties. There, filings are a daily occurrence.
Idaho’s housing boom was concentrated around its two main metropolitan areas, Boise and Coeur d’Alene. John Starr of the global real estate company Colliers International had a front-row seat as capital poured into the local market in the years preceding the bust. When he thinks of the early 2000s, he remembers watching land prices rise with demand, and house lots shrink. What the area wound up with, he says, were more and more subdivisions, packed tight with houses. Now, many of those homes stand vacant.
In Starr’s analysis, the decision by big banks and out-of-state developers that Boise was a good place to put money has a lot to do with Micron Technology. When Micron took off in the early 1990s, other employers were drawn to the state. Idaho boomed. Census data show that the state’s population grew by more than 28 percent from 1990 to 2000, and by more than 20 percent from 2000 to 2010. To housing developers looking for places to invest, Idaho was a gem. But Starr says they should have looked closer. Continue Reading
According to a White House estimate, here’s how President Obama’s ‘American Jobs Act’ would affect Idaho’s economy:
• $160 million would prevent or reverse layoffs of about 2,500 teachers, police officers and firefighters.
• $190 million for highway and transit modernization projects could support at least 2,500 jobs.
• $94 million would upgrade schools, supporting as many as 1,200 jobs.
• About 40,000 Idaho businesses would see their payroll taxes cut in half to 3.1 percent on the first $5 million in wages.
• $20 million would revitalize and refurbish vacant or foreclosed homes and commercial buildings.
• $11 million would upgrade community colleges.
Idaho’s timber industry is another example of a sector that’s been a main-stay of the area economy since the state lines were drawn. Like mining, it’s seen big declines over the last couple of
Tom Brakefield / Getty Images
Stacked wood in a lumber yard at an Idaho sawmill
decades. Idaho’s wood products industry is driven by lumber demand, which is a function of the housing market. The state Division of Financial Management is predicting incremental increases in both sectors of the economy starting this year. The DFM’s 2011 forecast said housing starts will increase 30 percent this year, 55 percent in 2012, 16.4 percent in 2013 and 13 percent in 2014. As those starts pickup, so too will the demand for lumber.
“This anticipated strong demand will act as a countervailing force to supply factors that have exerted relentless downward pressures on logging and wood products employment.” – Derek Santos, Economist, Division of Financial Management
Jay O’Laughlin is the Director of the Idaho Forest Wildlife and Range Policy Analysis Group at the University of Idaho. He said the key question is how long will it take for the state to work through its housing “overbuild.” “It will be more than a year,” said O’Laughlin, “less than five years, I’m confident of that.” Continue Reading
Winston Davidian / Getty Images
There are 759,000 people in Idaho's labor force, at least 70,000 are out of work
The Idaho Department of Labor today reported a drop in the state’s unemployment rate, but the number of people still out of work isn’t declining as quickly as labor officials would like. August’s seasonally adjusted unemployment rate is down two-tenths of a percent to 9.2. That’s the lowest Idaho’s rate has been in the last 15 months. Still, Department of Labor spokesman Bob Fick said 70,000 people were still out of work around the state.
“The number of workers with jobs declined for the third straight month, dropping below 689,000 for the first time since March. Nearly 2,400 workers dropped out of the labor force in August, the second largest one-month drop on record. The largest was 2,600 in July.” – Bob Fick, Idaho Department of Labor
Fick said employers expanded payrolls by just 1,800, matching the gain from July to August in 2010 but far below the pre-recession average of 3,300 new jobs.
Director of the Business Research and Economic Development Center at Boise State University, Brian Greber, believes too much weight is put on monthly unemployment figures. He said those statistics aren’t always a good indicator of what’s happening in the job market. Instead, he thinks the focus should be on the actual number of jobs being added to the economy. Continue Reading
Curtis Gregory Perry
A pre-recession construction project south of Twin Falls
Agriculture Secretary Tom Vilsack this week announced a new round of grants and loans from the agency’s rural development program. The funds are meant to spur rural job creation and business development. In Idaho, the one grantee is the Idaho Falls office of the Yellowstone Business Partnership.
Executive Director Jan Brown says they have big plans for their $49,500 allocation. They’ll hire two consultants to work with small businesses in rural counties of eastern Idaho. The aim is to help those businesses shift to more sustainable and, Brown says, money-saving practices. That would be things like more efficient waste management, energy conservation and water conservation. That, she says, could free up money for hiring.
This is the slow road to create jobs in rural Idaho and beyond. The New York Times detailed criticism of this route to economic growth earlier this week. The basic complaint? For all of its funding and effort in rural areas, why doesn’t the Obama Administration have more to show? But on the flip-side, where would rural communities be without this spending?
Economists like Lionel Beaulieu, the director of the Southern Rural Development Center at Mississippi State University, said financing for rural programs might have prevented even deeper levels of poverty and unemployment.
“The truth is,” Mr. Beaulieu said, “we don’t know how much worse it would have been if not for this funding.” — The New York Times
The creation and growth of most western states was a direct result of the mining industries that developed in the late 1800s. In Idaho, it was silver and gold. Mining and other traditional natural resources have taken a big hit in the last decade, but industry representatives and some economists believe they’re still a major player in Idaho’s 21st Century economy.
Jeff Perkell / Getty Images
Idaho's mining industry is known for its silver, molybdenum and phosphorus
“It (mining) might not be the largest industry in the state,” said Jack Lyman, Executive Vice President of the Idaho Mining Association (IMA), “but it’s certainly an important industry in our state.”
The Idaho Division of Financial Management said the state’s mining industry grew four percent in 2010 and it projects “consistent gains” through 2014.
“Mining is benefiting from high metal prices.” – Derek Santos, Economist, Division of Financial Management
In fact, the average price of an ounce of silver has doubled from August 2010 compared with August 2011. Still, Lyman says its difficult to forecast potential growth because the industry’s fate is largely dependent upon global commodity prices. Continue Reading
Idaho Division of Financial Management
Idaho's Industry Share of GSP in 2010
The Idaho Department of Labor says the state’s economy has been growing more slowly than the nation’s. The Idaho Statesman reports the state’s total gross state product rose 3.3 percent last year to $55.4 billion. But, when adjusted for inflation, it rose 2 percent to $50.7 billion. Nationwide, the inflation-adjusted gross product for 2010 is 2.6 percent.
Idaho ranked 30th among the states in its rate of growth.
These five industries, like construction and high-tech, hardly cover Idaho’s entire economy, but they have acted as some of the most volatile and crucial economic indicators over the last decade. State economists say Idaho’s economic turnaround will be gradual, albeit it’s headed in the right direction.
Keith Brofsky / Getty Images
Business services are expected to make a "disproportionately positive impact" on employment
Services & Trade: The services industry includes everything from accountants and lawyers to roofers and painters. This sector of Idaho’s economy experienced declines in 2009 and 2010 but is now expected to be one of Idaho’s growth engines over the next four years. That’s according to the 2011 Idaho Economic Forecast which is published by the Division of Financial Management. The retail and wholesale trade part of this sector is also expected to grow. According to the report, Idaho’s trade sector shed more than 10,500 jobs in retail and wholesale trade between 2007 and 2010.
“This sector’s return to growth is especially important because it is the largest private employer in the state.” – Derek E. Santos, Economist, Idaho Division of Financial Management
Scentsy.net
Inc.com ranks the Meridian, Idaho based wickless-candle company Scentsy the 85th fastest growing company in the United States over the last three years. According to its website, Scentsy has 100,000 independent sales representatives who market and sell products through home parties.
It’s the second year the wickless-candle company has made Inc. Magazine’s list of the fastest-growing, privately-held companies. Scentsy says its 2010 revenues totaled $381.8 million.
The Idaho Department of Commerce reports 16 other Idaho based companies made the list this year including, Balihoo in Boise, North Wind in Idaho Falls and Bodybuilding.com in Meridian.
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