'We are not the way we were'

During Dr. John Mitchell's 2021 Economic Forecast presentation with the Coeur d'Alene Regional Chamber of Commerce, this became certain: Everything is relative and uncertain. 

Still, Idaho is looking to be on the positive end of the spectrum, Mitchell said, mainly due to COVID-related developments like working from home.

"What the pandemic did was demonstrate, very vividly, the ability of people to work remotely and not live where their principal place of employment was," Mitchell said. "If you think about what we have lived through, the pandemic is an accelerant."

Places that are attractive, like the Coeur d'Alene, Spokane, and Spokane Valley metro areas, will likely continue to grow, Mitchell said, as regional dispersion of the population continues to draw people into the Inland Northwest. 

While it may not be evident to all, Mitchell pointed out that patterns like moving out of major cities change from time-old traditions.

Last year, grandparents didn't spend the holidays with grandchildren. Frequent flyers haven't been on airplanes since last March, big-city conferences have been replaced by their far less expensive Zoom meetings, and an increasing number of children are schooled from home.

"Is it a trend, or is it a blip? We'll have to see how that plays out," Mitchell said. "If you look at rent data, it shows in densely populated coastal urban areas, and rents are going down as people are looking for other locations, suburban locations, smaller cities with milder climates."

Some argue this change is temporary, Mitchell noted — that the trend will regress. Others do not, but, Mitchell said it will depend in part on the monetary and fiscal policy changes ahead.

Potential alterations to the current policy have what Mitchell called a "long shadow" that will loom over the plans of businesses, municipal governments, and individuals, disrupting them with a range of ever-increasing risk factors. 

Some of the risks include:

• The possibility of government-mandated shutdowns
• The longevity of forbearance and eviction moratoriums
• The long-term implications of online childhood education 
• A decrease in college enrollment rates
• The fraction of workers in the United States labor force
• The vitality of the United States economy 
• Decrease in retirement savings due to unstable financial income 
• The long-term impacts of COVID-19 on the medical system and those infected

Many consumer-driven sectors struggled during the pandemic — including Idaho's restaurants, travel, and tourism industries, which faltered by about 10% statewide, Mitchell said. Fortunately, as of Jan. 3, Idaho's total consumer spending was up 7.4% compared to that of January 2020. 

Money poured into different avenues, as Idahoans spent 20% more at grocery stores, cleaning products, video conferencing equipment, home remodeling, shipping distribution companies, bike shops, and home remodeling. 

"It's the notion of creative destruction," Mitchell said. "New ways of doing things to replace the old ways of doing things. It goes on all the time, but I think it's accelerated during this epidemic."

When it comes to shifting Idaho's employees, coping with the change isn't as easy — particularly for those whose jobs are not coming back. Mitchell pointed out several significant companies, Pier One, JCPenney, Men's Wearhouse, Jos. A. Bank and Sur la Table have been heavily affected by closures and bankruptcy. 

Locally, Mitchell said North Idahoans can expect leisure and hospitality industries to pick back up following a favorable vaccine distribution and consumer confidence over time.

New resident in-flow will also continue, prompting the housing and construction industry to continue to grow in the Inland Northwest. There will also be more substantial commodity prices to support forest products and other material sectors. 

"I think in the rearview mirror, 2020 will be a hiccup in a long period of strength," Mitchell said. "The recovery has started with the region on the rise, but that must not blind us to the victims of nature's surprise."

Mitchell is a Coeur d'Alene resident and favorite local speaker on the economy. He was a professor of economics at Boise State University for 13 years before joining the U.S. Bancorp in 1983.

Mitchell was chief economist of U.S. Bancorp until July 1998 and served as Economist Western Region for US Bank until July 2007. He has been making economic presentations on the nation and the region for almost 50 years.