Washington's local economy, which suffered only a mild case of 1980 recession fever, is showing signs of renewed vigor.

But don't expect any jumping for joy here -- now, or during the next 18 months.

That's the consensus of business people and economists in the Washington region. The best that they expect is mild economic expansion for one of the nation's most affluent marketplaces.

The good news, locally, is that an Inauguration Day is scheduled next January.

"After the election, no matter who wins, there will be a turnover" of administration officials, noted Fairchild Industries Chairman Edward Uhl. "It will be greater if Ronald Reagan is elected."

According to one active real estate agent, a substantial population turnover takes place every four years in the Washington area, as current administration officials leave town for forced or voluntary retirement from the government. This creates an active real estate market and a rebound in such related as retailing, wholesaling and house decorating.

Moreover, if events in 1981 follow the decades-old local economy script as carefully as they did in 1980, overall business activity will pick up naturally after a year of malaise that was caused -- in part -- by uncertainty about the future plans of many area households.

George Ferris Sr., founder of the regional investment firm of Ferris & Co., also said he thinks a victory by Reagan over President Carter would lead to "an improvement in business around the country, and it will affect Washington business favorably."

He complained about "Carter's indecision . . . especially on interest rates." Indeed, most Washington business leaders favor Reagan's election and say, privately, that they will vote for GOP, expecting somewhat better conditions.

A Reagan victory, according to Ferris, would not be followed by a fast business pickup but by a gradual gain, "with people more inclined to spend."

That is a key to this area's economy, since local business people are accustomed to growth. To the extent 1980 has been a disappointing year, it has been most noticed in such areas as real estate and auto sales, where available merchandise for sale, has outnumbered customers willing to commit dollars.

All the economic evidence suggests, however, that there was no real recession here of more than a few weeks' duration. The local economy was strong early in the year but suffered a slower rate of growth during the summer before hitting bottom, probably in August (when checks cleared by D.C. banks plummeted 14 percent from a year ago).

Economic activity here rises and falls -- but not too drastically -- with each new wave of consumer and business optimism or pessimism.

Areawide retail sales, for example, were about $7 billion in the first six months of the year, a gain of about 12 percent compared with 1979, primarily because of strong business early in the year. But sales in June were up just 7 percent from a year ago.

After a slow spring season, tourism rebounded in July, despite the heat wave. According to data compiled by the accounting firm of Laventhol & Horwath, hotel occupancy levels surpassed those of 1979 for the first time this year during July. Average area occupancy that month was 74.1 percent, up 17 percent from last year. Year-to-date occupancy averged 69.1 percent by the end of July, off only 1.9 percent from the 1979 pace.

Area employment, also has remained unusually stable, with D.C. unemployment lower than last year (6.9 percent in July versus 7.8 percent in 1979) and metropolitan area joblessness at 4.3 percent of the work force compared with 4.7 percent a year ago. Area service-industry jobs rose by 13,700 in the past 12 months.

All the while, Washington continues to attract new businesses and professionals that have a stake in government decisions. The "three A's -- accountants, attorneys, and associations -- are filling up office buildings as rapidly as they are completed and there is no sign that downtown Washington's current construction boom is about to end.

The real estate firm of Coldwell Banker estimates that a miniscule 0.1 percent of downtown office space is vacant, versus 3.5 percent for the nation as a whole, 12.5 percent in Atlanta, 8.3 percent in Kansas City and 4.5 percent in downtown Manhattan.

Also under construction is the District's convention center, which offers the hope of necessary new revenues for the hard-pressed city government. o

But to the extent there is such optimism, it is balanced by an awareness of the bad news -- broader economic developments from which even Washington is not immune.

Disastrous weather conditions ruined many crops in the farm states this summer and that means soaring food prices over the next year. Coupled with the continued impact of high energy costs, there is no hope that inflation can be cooled off substantially.

Area savings and loan executives predicted last week, for example, that mortgage interest rates will stay above 12 percent through the balance of 1980. One-third of local lenders expect rates to be 13 percent or higher on New Year's Day. The volume of mortgages settled in August at 21 Maryland and D.C. S&Ls was down to $87 million from $130 million a year ago, reflecting reduced real estate activity caused by inflation.

"I'm sort of a gloomy guy," observed Geico Corp. Chairman John Byrne, whose automobile insurance business is very sensitive to inflationary cycles. "Over the next five years, I worry about the cost of capital and where the nation's businesses are going to get it from. The bond market has been a disaster in the last five weeks, but you ain't seen nothing yet."

In particular, Bryne expressed concern last week about the strength of national economic recovery from the recent recession. "The nation lost a wonderful opportuntiy to break the back of inflationary psychology," he said. "I worry about whether we have the management skills that are necessary. Over the next 10 years, businessmen will have to earn at least 20 percent on equity, and I don't see managers focusing enough on the absolute need for a 20 percent or greater return" in terms of profits as related to stockholders' investments in business during an era of inflation exceeding 10 percent.

Potomac Electric Power Co. Chairman W. Reid Thompson said he does not see "much amelioration of inflation in the nation as a whole and in the District, and this will have a bad effect on people generally." But Thompson did forecast that recovery from national recession will be quicker than after the 1974-1975 contraction, because the energy component of overall price rises is not as severe now as it was then.

(One other bit of good news: Pepco's customers won't face rate increases that match the general inflation rate, because the Washington-based utility company has a very slim construction program planned and because Pepco is burning mostly coal to generate electricty, Thompson said.)

Fairchild's Uhl sees a flat economy for the next few months, with rising interest rates once again dampening home construction. "The wave of optimism that came along a few months when the administration announced it would balance the budget has dissipated, and everyone now expects the budget to be unbalanced. And that will have a bad effect on interest rates," Uhl said.

Washington economist Andrew Brimmer, a former member of the Federal Reserve Board, said economic evidence suggests that overall recession hit bottom during the summer, and he noted that Washington's economic slowdown was much less dramatic than in sections of the country dependent on heavy industry. The most obvious local examples were in housing, homebuilding and auto sales, he said.

Brimmer said he expects a modest recovery during the fall, "But just as the whole economy will show very, very slow recovery, we will have no boom here. Let's rule out a V-shaped recession. It is not a sharp drop followed by a sharp recovery. [Nationally] we may not recover even by the end of 1981. We will not have fully retraced all of the lost ground. . . .

"Washington, on the other hand, may be closer to regaining its previous level of activity a year from now," Brimmer continued. The local economy will precede and be stronger in recovery than the nation as a whole, he forecast.

One major reason that metropolitan Washington escaped recession this time has been solid economic and business expansion in the Northern Virginia suburbs, at a time when Maryland's economy was depressed by manufacturing layoffs and when the District's stagnant economy was reflected in continued high unemployment rates for the city's young people.

Residential and commercial construction is particularly strong in the Virginia suburbs, as thousands of new jobs have been created in recent years.

But the state's overall economy did not plummet as badly as the national averages, either, although building permits for new construction were off 10 percent for the first seven months of the year, new car registrations fell 15 percent, there was no increase in non-agricultural employment and retail sales edged up just 3 percent.

"Virginia generally lags behind the national economy in downturns and upswings," said Leland Traywick, director of the business research bureau at the College of William and Mary in Williamsburg.

"This summer we began to feel the recession that hit the nation earlier this year. Now . . . it lags a little bit in coming out of a recession. Therefore, if the nation's economy is turning around, as many anaylsts feel, then the chances are that by late fall or the end of the year, Virginia will see an upturn in business activity," Traywick stated.

Virginia never goes as deep into a recession as the major industrialized states. In 1975, national unemployment peaked at 9.1 percent while the highest level in Virginia was 6.9 percent, for example. This summer, when the U.S. rate of unemployment hit 7.7 percent, Virginia's jobless rate was 5.8 percent.

Much of Virginia business is service business, with a heavy dose of federal, state and local government and military workers in key regions. All services (including retailing and transportation) account for 72 percent of the state's total output of goods and services, while manufacturing accounts for just 21 percent (and that is light manufacturing, primarily).

Many of the same factors affect the metropolitan Washington economy, where about a quarter of all jobs are with the federal government (total area employment in July was 1,594,000, of which about 380,000 were on Uncle Sam's payrolls).

"The federal employment base is the bedrock, and the ancillary employment generated by the federal government is substantial -- the associations, law firms, et cetera," Brimmer noted. "Most, white-collar support employment is here because of the federal government."

But, as Uhl noted, Washington also is becoming the hub of the new communications industry. Communications Satellite Corp. is here as is Fairchild's own domestic communications subsidiary, MCI Communications Corp., and smaller firms. American Telephone & Telegraph has a growing employment base in the area, and Southern Pacific Communications is moving to Montgomery County from California.