Western U.S. States Feel Impact From Asian Crisis

From Yahoo News


Sunday September 20 7:35 AM EDT
By Judith Crosson

DENVER (Reuters) -The economies of California and other western states will grow more slowly next year, due in part to the fallout from the economic crisis in Asia, economists from the region said Friday.

Whether it's timber from Oregon, apples from Washington or the baccarat tables in Las Vegas, western economies are feeling the impact from Asia, at least in some respect.

``The drag from Asia's problems appears to be more powerful then the push from real estate and construction's rebound,'' Howard Roth, Director of Regional Economies at the Bank of America, said.

His comments were echoed by other economists at the Western Economic Roundtable, sponsored by the Center for the New West, a Denver-based think tank.

``We initially thought it would be one-to-two years of this, (impact from Asia), but now it looks more like two-to-three years,'' Roth said later, adding that the government of Japan appears to be ``dithering'' in its approach to tackling the problem.

The impact from the economic woes in Asia appear to be felt the strongest in the Pacific states.

``Oregon's close ties to Asian export markets is causing the state to feel the impact of the region's financial crisis proportionately more than the country as a whole,'' Paul Warner, the economist for the state of Oregon, said.

Some 64 percent of Oregon's exports went to Asia in 1996, the most recent year available. High technology, timber and agriculture are Oregon's chief exports.

Economists said it was hard now to project how long it would before Asian economies bounce back. Kelly Matthews, chief economist at First Security Corp (FSCO - news) in Salt Lake City, said Asia's crisis could mirror the economic nightmare that some Rocky Mountain states went through when oil prices fell in the late 1980s.

``We didn't get over this quickly. It was brutally difficult and long,'' Matthews said.

He expects Utah's economic growth this year and next to remain among the top 10 states, but the rate of increase will be below the growth seen in the past few years.

Lumber exports from the state of Washington have fallen 70 percent from year ago levels, Paul Sommers, executive director of the Northwest Policy Center at the University of Washington said.

Apple growers in Washington saw exports to Japan drop by a third in the 1997-98 season, Sommers said.

Japan is Colorado's largest export market, accounting for 15.6 percent or $875 million of the state's exports, Nancy McCallin, chief economist for the Colorado Legislative Council said.

Even in Las Vegas gambling casinos are noticing reduced play for baccarat, a popular game among Asians, Keith Schwer, Director of the Center for Business and Economic Research at the University of Nevada, said. But Schwer said the information was anecdotal because casinos do not count who is sitting at the tables nor determine the country of origin.


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