BICOASTAL ECONOMY. the Tide Ebbs with Growth Slowing on Both Coasts, the Vaunted "Bicoastal Economy" That Characterized the 1980s Is No More. Still, the West Coast Is in Relatively Good Shape, despite a Slackening Defense Industry. on the Eastern Seaboard, Only Florida Continues to Post Above-Average Growth
Brad Knickerbocker, writer of The Christian Science Monitor, The Christian Science Monitor
`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 accurate."
"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. …