Any way you count it, Idaho economy soaring

There is a formula to figure out almost anything.

For instance, the Idaho Department of Labor can give you a rough guide to the economic health of North Idaho.

“It obviously isn’t precise math,” said Sam Wolkenhauer, a regional analyst for the department, “but you’re going to come close if you take figures for the entire state of Idaho, then subtract Ada and Canyon counties — basically the Boise metro area — and compare North Idaho to the rest of the state.

“In general, Kootenai County and the region’s other counties (Shoshone, Boundary, Bonner and Benewah) will have Idaho’s strongest economic growth if you leave Boise out of the equation.”

Why should this matter at the moment?

Bloomberg News, a national information source, recently published a study showing that Idaho’s economy is the fastest-growing in the entire country.

Using Bloomberg’s index, which measured employment, personal income, home prices, tax revenue, mortgage delinquency and stock market figures, the Idaho economy jumped 9.7 percent for the 12 months ending in March of this year, more than 4 percent higher than the second-best state (Washington).

Even more specifically, the study showed Idaho’s increasing success largely has been based on international trade. The state’s businesses have done a better job (in relative terms) than anyone else in reaching outside the borders of the United States.

Idaho has been enjoying a fairly long uptick with exports. Overall sales have gone up from $2 billion in 2003 to $4.87 billion last year.

That’s obviously good news, although it comes with the usual qualifier: Idaho’s overall numbers are small.

The state’s most recent measured population was 1.67 million in 2016 (less than metro Nashville), although estimates based on U.S. Census Bureau figures suggest that, with a growth rate of slightly more than 100,000 per year, Idaho now has about 1.8 million residents.

In Kootenai County, anyone who has tried to buy a home or rent an apartment lately knows that we’re growing quickly, as well.

The county had a population just above 154,000 last year, so based on the state’s growing numbers, we likely have risen past the 160,000 mark in 2017.

Wolkenhauer’s “formula” seems to be holding true for the area’s economy, too.

Even though Idaho’s numbers are skewed by the semiconductor industry and its high rate of exports — Boise-based Micron has 31,500 employees and owns a giant share of the state’s international sales — there has been plenty of growth elsewhere.

“Semiconductors, industrial, plus food and agriculture account for 70 percent of total exports from Idaho,” said Megan Hill, spokesperson for the Idaho Department of Commerce. “That leaves 30 percent of the pie for industries that are prevalent in North Idaho, like aerospace, wood products, and mining.”

Aerospace and technology are growing faster in the northern five counties (what the Department of Commerce designates as Region 1) than in most of Idaho — and so is manufacturing, especially in the tech sector.

As for the boom in international sales, the state maintains trade missions in Mexico, China and Taiwan, and a look at North Idaho businesses represented in state-sponsored visits outside the U.S. provides a fair glimpse at what the future may hold.

The Region 1 companies on recent trade trips were Ground Force (mining equipment), Unitech Aerospace, Tamarack Aerospace, Kochava (technology), 21st Century Scientific (medical equipment), Encoder Products (manufacturing) and Cascade Rescue (manufacturing).

It’s also worth noting that North Idaho is making progress in exports despite what appears to be an unusual down period in the export sales of wood products.

“For the past couple of years, our Asian business — mostly Japan — has dropped to just a fraction,” said Ahren Spilker, international sales director for the consistently robust Idaho Forest Group in Coeur d’Alene.

“A combination of the dollar’s value and competition from places like Eastern Europe have cut into business.

“But this industry is cyclical, so we’ve kept our hand in, especially with respect to Japan. We’re not out of international sales by any means.”

On the flip side of Idaho Forest Group’s export downturn, Hecla Mining Co. seems to be surviving the ongoing strike at its Lucky Friday mine with yearly sales of $134.3 million — and a Standard & Poor’s rating upgrade from B- to B.

“I’m not sure how you compare our operations to something like manufacturing exports,” said Luke Russell, Hecla’s vice president of external affairs. “We have mines in Canada and Mexico, so we are basically an international company.”

Hecla recently announced extension of work through 2020 at its San Sebastian mine in Mexico, so despite the hit of the Silver Valley strike, stock analysts are not jumping off the company bandwagon.

Hecla has consistently grown its reserve base for future production, with 2017 reserves totaling 172 million ounces of silver and 2 million ounces of gold. Sales for the Coeur d’Alene-based company, which celebrated its 125th anniversary last year, is 55 percent domestic, 45 percent international.

Analyzing North Idaho’s overall economic growth also requires looking at a few specialty situations.

“One thing to remember is that there are (North Idaho) companies that sell products domestically that are then exported internationally,” Hill said. “That money technically gets counted as domestic business, but realistically the goods are leaving the United States.”

Wolkenhauer touched on another issue.

“Some of the figures are misleading, and it’s really obvious in a place like Kootenai County,” Wolkenhauer said. “For instance, a lot of the business growth is in the services industry, and that doesn’t count as exports.

“Yet a lot of the people served leave the area. Some don’t actually reach the U.S. border, but obviously some do — yet that technically isn’t international business.

“There are certainly a lot of visitors from Canada who add to the area’s economy.”

Wolkenhauer also stressed that the phrase “services” can be misleading when assessing an area’s economic well-being.

“North Idaho is seeing a lot of growth in health care, professional services and education,” he said.

“Remember that when these figures get counted, a coffee barista is a services job — but so is a surgeon.”