The West's supercharged economy will lose a bit of steam in the next few years but still outpace the nation as it has most of the decade, according to economists from around the region.
"This region will continue to outpace the national economy at least for this decade and maybe into the 21st century," said Thayne Robson, director of the Bureau of Economic & Business Research at the University of Utah in Salt Lake City. "We are a low-cost region for growth."As they head into the next decade, the states will have to grapple with a number of growth-management issues, ranging from infrastructure and economic diversification to tax reform and the changing face of the population, the economists said.
Representing 11 Western states, the economists met for the daylong Western Economic Roundtable this week, sponsored by the Center for the New West, a Denver-based policy research institute.
Most of the economists predicted slightly slower growth for their states in the next two years, ranging from 2.5 percent to about 4 percent. Many cited a slowdown in the region's booming construction industry and federal job cuts as factors.
But Oregon state economist Paul Warner had a more unusual problem - an inadequate labor force for the fast-developing high-technology industry.
"The key reason why we think we're slowing down is we are simply running out of labor," he said. "It is getting difficult to find the labor needed."
Economists in Utah, Nevada, Washington and California forecast growth to continue at the same or a higher level, with Utah predicting the biggest increase, a 5.7 percent job growth rate.
"If you're growing and you're growing in the right sectors, you're on a roll, and Nevada is on a roll," said Keith Schwer, director of the Center for Business & Economics Research at the University of Nevada-Las Vegas.
"The only question is, will we overdo it, and we'll overdo it when the market tells us."
U.S. employment increased 2.3 percent in 1995 and is forecast to increase 1.4 percent in 1996 and 1.3 percent in 1997, according to Brian McDonald, director of the Bureau of Business & Economic Research at the University of New Mexico.
For much of the decade, the West's economic growth has been driven by migration, urbanization, economic diversification and globalization, said Philip M. Burgess, president of the Center for the New West.
The region is weaning itself from a reliance on natural resources, such as mining and timber, and is becoming a center for telecommunications, high technology and biotechnology, creating a "silicon mountain."
For example, Oregon's timber harvest is about one-half of what it was in the late 1980s, and the high-tech industry will overtake timber in job growth soon, Warner said.
"We've got a silicon forest," he said.
Other growing sectors include the services industry and manufacturing, including specialty-item producers such as Rocky Mountain Chocolate Factory, based in Durango, Colo., Burgess said.
As states look ahead, they must deal with several issues, ranging from the environment to how best to manage economic development.
Some of the problems include transportation and infrastructure improvements; environment issues from air pollution to water; and how best to finance the upgrades and economic development.
"Growth issues are market-driven," Robson said. "They are not issues driven by public policy."
Economists participating in the conference were from Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming.