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Avista economist tells Spokane Valley council health-care growth masks regional weakness; warns of inflation and rate risk
Summary
Dr. Grant Forsyth presented a regional economic forecast to Spokane Valley council, saying health care has been the primary driver of employment growth locally and warning that inflation and energy-price shocks could worsen municipal budgeting pressures.
Dr. Grant Forsyth, chief economist for Avista Corporation, told Spokane Valley council on April 21 that while the U.S. economy is expected to continue modest growth, the region's recent employment gains are heavily dependent on the health-care sector. Removing health-care employment from local figures, Forsyth said, would leave the metro area with weak or negative growth.
Forsyth highlighted several factors city leaders should consider for budgeting: potential federal health-care reimbursement cuts that could curtail local health-care hiring; the role of AI and top-income households in driving U.S. growth; elevated gasoline prices influenced by international events and state climate policy; and long-term interest-rate pressures tied to fiscal outlooks. He told the council that the consensus U.S. GDP forecast is roughly 2% for the next couple of years but that uncertainty is rising.
"The health-care sector has been propping up employment growth in our metro area," Forsyth said. "If you take out health care employment, the rest of employment growth is negative for recent years." He also warned that energy-price shocks tend to push fuel costs up faster than they fall, which could sustain higher municipal operating costs.
Forsyth said Spokane Valley has averaged about 1% population growth annually in recent years, driven mainly by in-migration, and recommended that the council weigh population-driven revenue against infrastructure and service costs when planning budgets. He closed by noting wage and compensation growth near 4% and saying that higher inflation expectations and elevated long-term rates mean municipalities should not assume near-term rate declines.
The presentation did not produce votes; council members asked follow-up questions about health-care reimbursement rates, the local manufacturing and construction picture, and whether the Valley's particular manufacturing gains are captured in the regional data. Forsyth offered to follow up with staff on data questions.
