`CALIFORNIA is just like the rest of the country, only more so,"
goes the old adage. These days, the reverse is true for the Golden
State's economy and for that of Oregon and Washington State as well.
As the nation slides toward recession, the West Coast is in
relatively better shape. "Flat at a high level and likely to stay
flat," is how Walter Hoadley, chairman of Bay Area Economic Advisers
in San Francisco describes it.
"We're sort of growin' but slowin'," quips John Mitchell, chief
economist for US Bancorp in Portland. In other words, like the rest
of the country only less so.
Yes, there has been some slowdown in certain industries, such as
timber in Oregon and aerospace in Washington. And there is some
disruption as economic activity shifts within the region - from
overcrowded Los Angeles and San Francisco to the Central Valley
towns of Fresno and Bakersfield, for example.
But overall, according to economists in all three states, the
West Coast is likely to weather the economic downturn indicated by
recently declining growth in personal income and gross national
product nationwide. This is particularly good news for the Pacific
Northwest, which suffered severe recession in the early 1980s.
Some analysts are less sanguine. The cover story in Forbes
magazine last week, titled "California's Fading Boom," warned that
"more and more manufacturers are packing up and leaving California."
Citing the high costs of labor, housing, and energy, as well as "a
bewildering array of environmental regulations and antigrowth
propositions" (like "Big Green" on next week's ballot), the
pro-business magazine predicts that the loss of manufacturers to
relatively friendlier states like Arizona, Colorado, and Texas "will
have a devastating impact on the state economy."
That is not the view, however, of two Federal Reserve Bank of San
Francisco economists, Carolyn Sherwood-Call and Ronald Schmidt. "The
outlook for California's economy hinges on whether the drop in
activity from a year earlier reflects a return to a more moderate
level, or whether that decline marks the beginning of a regional
slide," they report in the bank's latest quarterly review. "Our
analysis suggests that the first interpretation may be more
"There's no Texas or New England about to happen, which some
pundits think," says Sanford Goodkin, executive director of the San
Diego-based KPMG Peat Marwick/Goodkin Real Estate consulting group.
"The economy is relatively strong because of its diversity.... Any
economy or real estate market that has been in such heat for so long
needs a period of slumber. Job formation will be slower, but still
beyond almost every other state if not all other states."
Mr. Goodkin notes, for example, that while California is expected
to lose 200,000 defense-related jobs between now and 1995, state
employment still will be growing by 300,000 jobs a year. He also
predicts that Los Angeles soon will pass New York in dollar volume
of international trade. …