Bonner County faces mixed recovery

SANDPOINT — It will, in some ways, be a tale of two recoveries — one in the greater Sandpoint area and the other on the county’s west side.

The economy will rebound sooner in eastern Bonner County, especially in the greater Sandpoint area, led by a manufacturing sector which showed “remarkable strength” and a tourism sector that “didn’t take nearly the beating it did nationwide,” said Kathryn Tacke, regional economist for the Idaho Department of Labor.

“I feel pretty good about what is happening in the greater Sandpoint area,” she said of where the area stands as the country begins a long climb out of the worst economic downturn in decades.

However, the county’s west side has been devastated by mill closures and unemployment that is likely over 20 percent, Tacke said.

It will take far longer for that area of Bonner County to recover, she added.

“I know there are a lot of people suffering over there and that suffering, unfortunately, is likely going to last a couple more years at least,” she added.

Also hard hit by the bursting of the housing bubble and country’s financial crisis were the county’s real estate and construction industries, Tacke said.

The collapse of the housing market hit the region’s timber industry hard and it will be a long time before it recovers, Tacke said. Even then, there will be fewer timber jobs available as technology plays an increasing role in the industry.

“The timber industry is the biggest challenge (to the area’s recovery),” Tacke said. “It was hit before the recession began and it’s continued to take hits during the recession.”

Tacke compared the industry’s slump to that seen in the early 1980s, but noted the overall impact is less onerous because of increased diversification, especially in the greater Sandpoint area.

That diversification, led by a surprisingly robust manufacturing sector, will lead to “some remarkable things happening when the recovery takes hold,” she said.

Even in the depth of the recession, the sector has shown signs of growth and manufacturers like Quest, Unicep, Encoder and Litehouse look to continue their expansion as the country moves onto stronger financial footing. Intermountain Community Bancorp will continue to lead the way and Coldwater Creek will again be a “job-creating machine” as the recovery hits its stride, she said.

“There’s good reason to believe we’ve hit bottom in the country,” Tacke said. “Every industry will see improvement later this year, maybe not as much as we would like, but things will improve.

“It may even happen a little faster in Bonner County because there’s some remarkable things happening there.”

A weak dollar could boost tourism in 2010, as out-of-area visitors and Canadians find it less expensive to visit and shop. While numbers didn’t drop significantly during the recession, visitors didn’t stay as long and didn’t spend as much, Tacke said.

Even though there are similarities, Tacke said there are far more differences with the back-to-back-to-back recessions of the 1980s. The region was heavily dependent on the timber industry, accounting for at least one-fourth of the county’s economic base, which proved a disaster for the Idaho Panhandle.

“The recessions in the 1980s were three slaps in the face to the U.S. but it was three punches in the face to us here,” she added.

While ramifications of the recession will be felt for a long time, Tacke said the country should start seeing some improvement this spring. Bonner County as a whole, and the greater Sandpoint area in particular, are poised to be on the leading edge of that recovery.

“I am very, very hopeful for Bonner County,” she added. “I think in the last few years, the county’s made some good decisions and that’s given it the resources it needs to really shine in the future. Unless the U.S. economy performs horribly, I see Bonner County really thriving over the next 10 years.”