Economic prospects for county look 'solid'.

Byline: Ilene Aleshire The Register-Guard

Lane County's economy will keep growing in 2006, but not as quickly as it did in 2005, a panel of economists said at the 12th annual Economic Forecast forum in Eugene.

"Two-thousand-six is going to look a lot like late 2005," said Brian Rooney, regional economist with the Oregon Employment Department. "We've passed the recovery period, and we're going into long-term growth."

Bill Conerly, principal of Conerly Consulting, described the economic prospect for this year as "solid but unspectacular growth" at the forum, which was held Wednesday at the Hilton Eugene & Conference Center.

The local construction industry most likely will have a strong year, State Economist Tom Potiowsky said, with some continued growth after a record year in 2005.

The outlook for wood products and high tech also is good, he said, although he added that he doesn't see local tech companies adding a lot of jobs. And retailers will benefit from the growth in housing the area has seen in recent years.

The housing market is likely to cool off in response to increases in long-term interest rates, the four-member panel agreed. But Potiowsky said he doesn't see signs of a housing bubble in the Eugene-Springfield area, in part because home prices only began to rise sharply in the third quarter of 2004.

Other cities, such as Medford, had been seeing double-digit increases in home prices at least a year earlier, he said.

Conerly, however, sounded a note of caution about housing, saying that for every 100 new residents, 80 new homes were being built. Unless every one of those new residents is a single person buying their own home, there's a danger of overbuilding, he said. Conerly also questioned whether there are enough qualified home buyers to keep the housing boom going. Nationally, he said, he sees a one in 10 chance of the country sliding into recession because of a bursting housing bubble.

U.S. Bancorp economist John Mitchell said he also is concerned about housing, specifically "the consumption housing link." Americans have been turning increasingly to their home equity for disposable income, he said, a worrisome trend.

And energy is another wild card, he said, with potential impact on a wide range of industries as prices begin climbing again.

Overall, though, Mitchell sees 2006 as a continuation of 2005. "It's not a bad outlook."

Conerly had a word of warning for employers, based on several years of economic growth and decreasing unemployment.

"You have workers who are at their jobs simply because they didn't feel they had an opportunity to leave," he said, and with the improving economy, that is likely to change. "It might be time to start thinking about reducing turnover through wages and other non-monetary means such as the way you treat people."