Nov. 4--Washington's economic performance in 2010 will be "much better" than this year, thanks to the state's diverse technology employers and proximity to fast-growing global markets, a regional business newsletter editor said Tuesday in Vancouver.

But while the Washington and Northwest have advantages including lower-cost hydroelectric power and above-average population growth, risks to the region's economic growth remain.

Among those negatives are Boeing's decision to move expanded 787 aircraft production out of Washington, and the reliance in Oregon on improvement in the nation's struggling housing industry, said Michael Parks, editor emeritus of Marple's Northwest Business Newsletter.

Parks spoke to a breakfast gathering of several hundred people at Heathman Lodge hosted by Riverview Asset Management Corp., a division of Riverview Community Bank in Vancouver.

"It's going to be awhile before Washington gets back to employment peaks of 2008," Parks said. "The good news is that the state is much less dependent on aerospace jobs than it was 20 years ago." In 1990, about 5.4 percent of employment in the state was tied to the aerospace industry. That percentage now is down by nearly half to 2.9 percent, he said.

Looking ahead, the state's broader manufacturing sector could see some improvement next year, if the dollar continues to weaken against other currencies, making our goods more competitive. And construction could even make a bit of recovery, if there's new spending on infrastructure projects such as roads and bridges.

However, the analysts and economists that Parks talks with are wondering what will drive real economic growth over the next 18 months, if consumer spending doesn't pick up. Couple that with concerns about a housing recovery and worries that recent massive government spending could trigger inflation, and you've got plenty of reasons for experts to hedge their forecasts.

"Uncertainty is as high as I've ever seen in my 35 years of tracking the economy," Parks told his audience. "We are operating at only 70 percent of our industrial capacity in this country. There are uncertainties around how we will unwind the extraordinary government involvement in the economy. And our national debt at 8 percent of the nation's gross domestic product adds risk."

Despite the difficulty in making a forecast, Parks said the Pacific Northwest has a lot going for it.

-- Population growth of 11 percent since 2000 as compared with national growth of 8 percent.

-- Server farms supporting such tech operations as Google and Amazon.com and solar power investments.

-- Geographic access to the world's fastest-growing economies.

-- Lower power costs and relatively plentiful water.

Parks expects a U-shaped recovery from the Great Recession, with slow but sustainable growth through 2010 and into 2011.

"In Washington, the most trade-dependent state in the union, we should be cheering for a weak dollar, Parks said. "Trade will lead the recovery. Our advantages in terms of trade and our diverse portfolio of tech companies related to software, semiconductors, medical technology and telecom will serve us well."

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