RETAIL
Pam Lindloff, a commercial broker with NAI Norris, Beggs & Simpson, has her thumb on the pulse of Clark County’s shoppers and sees plenty for customers and retailers to be excited about in 2007.

The highlights:
• Clark County retail sales growth will continue to outpace population growth due to increased shopping opportunities. Same-store sales will increase 11 percent to 13 percent.

• Sales leakage to Oregon will decline with the opening of more new stores in Clark County.

• One million square feet of new retail space will be completed or will be under construction during 2007.

• Clark County will continue to attract national retailers, with national restaurant brands to follow.

Lindloff said research indicates Southwest Washington can easily handle a greater number of stores. The national average for retail shopping gross leasable area per capita was 20.5 square feet in 2005, according to the National Research Bureau and CoStar Group. Clark County is at 18 square feet per capita.

PAPER
Last year proved to be a tough one at Georgia-Pacific’s Camas mill. The company announced plans to eliminate 300 jobs after deciding to close three of its five paper-making machines. Mike Tompkins, the mill manager, said the mill will still employ 500 people earning an average hourly wage of $24. These employees will focus their work on two key business areas - premium towels like enMotion and SofPull and white business paper used in printers, copiers and commercial printers. Tompkins said the declining housing market has made it difficult for the Camas mill to find wood chip sources. High fuel costs are also impacting the Camas operation.

TOURISM
Cultural travel is a buzzword in the tourism industry as domestic travel continues to rebound from the slump that came in 2001. People on vacation want to know about the history of where they are staying and partake in the cultural offerings. Clark County is quietly becoming a destination as a jumping off point for visitors to Mount St. Helens and the Columbia River Gorge. The Lewis and Clark bicentennial celebration highlighted Vancouver’s place in the explorers’ trip and the Confluence Project, which includes the land bridge over state Highway 14, gives visitors a reason to return. The Cathlapotle Plankhouse celebrates our region’s Native American heritage.

Those attractions helped push direct tourism spending here in 2005 to $328.6 million, a 12 percent increase from 2004, according to Kim Bennett, president of the Southwest Washington Convention & Visitors Bureau. Room occupancy through October this year was 60.3 percent, which leaves room for improvement, but was 6.1 percent higher than a year ago. Bennett foresees a solid 2007 for the local tourism trade. Key expectations include:

• The state Legislature is expected to increase statewide spending on marketing the state.

• Two new hotels will add rooms to the overall county inventory.

• Hotel occupancy rates should grow by 2 percent.

• Travel spending should increase by 10 percent.

ENERGY
Predicting energy prices is about as easy as preparing a gourmet meal in the galley of a fishing boat in 30-foot seas. The only sure thing is that prices are going to rise and fall based on supply and demand. When and by how much is the great unknown. Terry Morlan, director of power planning for the Northwest Power and Conservation Council, has the unenviable task of predicting energy costs during this especially volatile time. War and unrest in the Middle East, where many of the world’s energy resources originate, have created shortages in oil supplies and uncertainty in prices. Rapid economic development in China and other areas has created a specter of growing strain on the available energy supplies in the world. North America is reaching limits to its ability to expand traditional natural gas supplies, and the ability of less conventional sources to fill our needs is less predictable in both amount and cost.

With those conditions as a backdrop, Morlan said it’s possible for natural gas and electricity prices to drop in 2007. Oil pricing is a wild card, but Morlan said he wouldn’t be surprised to see those prices also decline in part due to slower growth in China’s economy.

COMMERCIAL REAL ESTATE
The commercial real estate market includes industrial, retail and office space that generally enjoyed a profitable 2006. Eric Fuller, president of the Vancouver-based commercial real estate firm Eric Fuller & Associates, said the coming year is going to be mixed.

Sales of properties as investment land hit a record in 2006 with $327 million in sales, a 70 percent jump from 2005. Repeating that kind of year is almost impossible, but Fuller expects a good year in 2007, but one that is more typical.

Last year mimicked 2005 in that virtually no new industrial, multi-tenant projects were completed. Fuller believes that will change in 2007 with 200,000 square feet of new space coming. He doesn’t expect it to stay vacant for long with existing businesses snapping up the extra room. Class A office space took a hit in 2006 with the departure of BPA personnel and other businesses leaving the market, which drove up the vacancy rate three percentage points to 18 percent. Fuller doesn’t see any large projects on the horizon and said rental rates will be stable.

HEALTHCARE
Health care continues to be a hot topic and fueled by two key discussions - cost and the level of coverage. Jonathan Avery, hospital administrator, Legacy Salmon Creek Hospital in Vancouver, said 2007 will be no different. Clark County’s health care providers will continue to hone business strategies to meet local needs. Southwest Washington Medical Center will complete its expansion this year. Kaiser Permanente is opening a new facility in Orchards and The Vancouver Clinic will break ground on an expanded replacement facility at its 87th Avenue location. At Legacy Salmon Creek Hospital new programs to be added include one for stroke patients, advanced neurosurgery capability and expanded pediatric care. Health care jobs are expected to increase by 4.5 percent in 2007.

EMPLOYMENT
The robust job growth in 2006 ends this year, according to Scott Bailey, a regional economist with the Washington Employment Security Department. He expects Clark County to add 3,100 jobs this year for a 2.3 percent annual growth rate, down from the robust 3.3 percent increase in 2006. Bailey said the decrease will follow national trends that are being influenced in part by a slowing housing market. The construction industry stands to take the biggest hit this year with job growth of 400 positions, half of the increase experienced last year. Manufacturing will also be down this year. The trade, transportation and utilities sector, the largest in the local economy with almost 25,000 jobs, will grow by 2.6 percent.

MORTGAGE
Both the Mortgage Bankers Association and Freddie Mac Economist Frank Nothaft believe that the housing market is returning to a normal condition after a record five-year stretch of surges in the number of home sales and prices. For 2007, economists predict that the slowdown will continue through the year at a moderated pace, said Deborah Oester, of Bank of Clark County. New and existing home sales will decline by 8 percent, and appreciation will also be at a slow pace. Long-term fixed mortgage rates are expected to rise during the year, but likely won’t hit 7 percent. The spread between fixed rate mortgages and adjustable rate mortgages will continue to be minimal, and unlikely to reach 2006 levels. One-year ARMs should hit a maximum of 5.5 percent and longer term ARMs to stay below 6 percent.

ECONOMIC DEVELOPMENT
Bart Phillips’ gauge of the local economy is simple - jobs and investment. Since 2001, Clark County’s work force has increased 16 percent to 136,000 employed by the end of 2006. Last year 22 companies expanded in the Clark County area, bringing 750 jobs and $100 million in investments. “By these two measures, the economy of Southwest Washington has been among the strongest in the state,” said Phillips, president of the Columbia River Economic Development Council.

Phillips sees another strong year in 2007, but beyond that said significant investments are needed for this region to remain competitive. He sees the need for a research university to work with area technology companies and supports Washington State University Vancouver’s efforts to become that school.

RESIDENTIAL REAL ESTATE
The saying goes that all real estate is local and Dick Riley sees no exception for Clark County. The real estate appraiser said the local residential market has cooled as other parts of the nation, but that it was never going to be a “bottom falling out” bust. Instead, he considers the 2006 market correction a good thing with the final landing coming this spring or summer. He sees first-time buyers once again being able to enter the market. A gradual appreciation is expected to start in the second half of 2007. Riley said 2007 will end much like the record year of 2005 with the sale of new and existing homes hitting the 13,000 threshold.

SEMICONDUCTORS
The proliferation of digital electronics such as cameras, televisions and MP3 players contributed to an estimated $248 billion in semiconductor chip sales in 2006, a 9.4 percent increase from the previous year. That pace isn’t likely to slacken as the Semiconductor Industry Association expects 2007 to be even better with $274 billion in sales and $300 billion by 2008. Some might question the sustainability of those projections, but Rob Bernardi, president of Kokusai Semiconductor Equipment Corp. in Camas, believes those estimates are accurate and based on three interrelated players, consumers, the economy and technological advances. Bernardi said consumers and the economy will play the most critical part in the equation.

TRANSPORTATION
If all housing is local, then transportation issues for most people are probably even more specific, as in how come it takes me so long to get to work. But it’s a much wider view in terms of economics. Freight moves across a variety of modes and delays cost money. Solving those problems is critical and Dean Lookingbill, director for the Southwest Washington Regional Transportation Council, said 2007 could be a pivotal year as the region could make decisions about where to place high capacity rapid transit corridors and what to do with the Interstate 5 Bridge.