Spokane-area economists expect employment growth in 2013, building upon gains during the last half of this year.

Grant Forsyth, chief economist at Spokane-based Avista Corp., says he's projecting 1.1 percent job growth in 2013 in Spokane and Kootenai counties. If improvement in the economy occurs more quickly than expected, he says, employment could increase by 2 percent, which was the pre-recession average annual rate of growth.

Even so, Forsyth says, the number of employed people in the region hasn't reached pre-recession levels yet. In that regard, he says, the Inland Northwest is lagging behind the Puget Sound region and the U.S. as a whole, both of which have surpassed pre-recession employment.

"We've been lagging the West Side for some time," Forsyth says. "Assuming there's no fiscal cliff, we won't get over that until some time in 2013."

If the fiscal cliff occurs, employment could be flat and thereby take longer to reach pre-recession levels, he says.

Fiscal cliff refers to the increase in taxes and decrease in government spending that's scheduled to occur in 2013. President Obama and Congress currently are negotiating a plan to avoid the fiscal cliff, but if they fail to reach an agreement, the Congressional Budget Office is projecting an increase in unemployment and another recession as a result.

Doug Tweedy, Spokane-based regional economist for the Washington state Employment Security Department, says he expects Spokane County to end 2012 with 2,000-plus jobs more than it had a year earlier, or about a 1 percent increase in employment.

Preliminary numbers for Spokane County in October, the most recent month for which data are available, showed total nonfarm employment in Spokane County was 210,700, up compared with 208,100 a year earlier and the highest level since October 2009.

The unemployment rate here in October dropped to 7.6 percent, down from 8.3 percent a year earlier, and was the lowest rate since December 2008.

Tweedy says much of the job growth has occurred during the last half of the year, with the first half being more sluggish.

The growth has occurred despite a drop in public-sector employment. The number of government jobs has decreased by 600 in Spokane County this year, with job losses occurring at all levels of government, Tweedy says. He adds, however, that public-education employment has remained flat this year.

More declines in public-sector employment are expected in 2013, with private-sector employment growth continuing to offset those job losses.

Tweedy says four industries account for the largest gains in employment: health care, finance and insurance, professional scientific, and advanced manufacturing, which involves making rubber and plastic parts, in some cases for the aerospace industry.

Forsyth says that while job growth is expected to occur, the region could use a large economic event, such as the announcement of plans for a large Boeing Co. manufacturing plant, to kick-start the local economy.

"The region is still in need of a positive economic shock," he says.

—Linn Parish