ECONOMIC PULSE
An update on the local and national economy
Posted May 2005
Small Business is BIG Business
With all the buzz about Boeing and Microsoft, you might think they are the only big economic drivers in the greater Seattle area. What people may forget is that businesses with fewer than 100 employees comprise 97.8 percent of the employers and hire 65.9 percent of all workers in King and Snohomish counties, according to 2002 data from the U.S. Census Bureau.
There are 74,797 small employers with 721,500 workers. Add the 150,726 non-employer businesses and together they account for 65.7 percent of all 1,324,429 workers.
Washington has led the nation in new company creation for five consecutive years, according to the Washington Technology Center (WTC). A high rate of new company creation usually comes with a high risk of failure, but Washington's rank as first for closures has improved to third in the nation. Venture capital funding has increased, and biotechnology accounts for 15 percent of all investment in the state. There were an estimated 190 biotechnology businesses statewide in 2002.
The top 25 biotech companies in the Puget Sound region in 2005 employ 17,451 workers. Only two companies have more than 500 employees and nine employ 100 to 499 workers, according to the "Puget Sound Business Journal."
In the state of Washington, the Small Business Administration set a record for the first half of the current fiscal year, with total lending up 15 percent to 1,143 loans, and an increase of 17.5 percent in dollars loaned, to $210 million.
Small businesses in the West rank above the U.S. confidence level on every measure but one, according to a poll by American Express in February 2005. Western businesses expect to improve growth, revenues, investment, hiring and healthcare benefits during 2005.
In 2005, 87 percent of small businesses in the West expect to grow; this compares with 56 percent in 2003. Fifty-six percent plan to hire, compared with 36 percent in 2003. Twice as many plan to make capital investments this year as three years ago - 78 percent in 2005 compared with 39 percent in 2002 (not shown on chart).
Notes: Census Bureau employers do not include self-employed, nor people employed by government, railroads, credit unions and hospitals. WTC data are from the "Index of Innovation & Technology." Puget Sound Business Journal data are from "Book of Lists" March 2005. American Express semiannual poll has a margin of error of ±3.9 percent in the U.S. and ± 8.5 percent in the West region.
Puget Sound Economic Trends
| Mar-05 | Feb-05 | Mar-04 | ||
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| Rates | ||||
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| Purchasing Power U.S. Consumer Dollar | 51.7 | 52.1 | 53.4 | |
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| Inflation U.S. | 193.3 | 191.8 | 187.4 | |
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| Inflation (Seattle-Tacoma-Bremerton)^ | n/a | 197.6 | n/a | |
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| Umemployment % (Seattle-Bellevue-Everett) | 4.8 | 5.2 | 5.9 | |
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| 30-Year Mortgage Rates % | 6.01 | 5.72 | 5.59 | |
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| Economic Indicators | ||||
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| Total Employment* (Seattle-Bellevue-Everett) | 1,347,000 | 1,338,200 | 1,319,000 | |
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| — Professional & Business Services |
186,100 | 184,000 | 177,100 | |
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| — Retail Trade | 141,600 | 141,200 | 136,900 | |
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| — Government | 202,200 | 201,600 | 200,300 | |
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| — Aerospace | 61,800 | 61,500 | 58,700 | |
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| — High Tech | 53,300 | 53,300 | 51,800 | |
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| Airport Passengers (Sea-Tac) | 2,345,413 | 1,898,956 | 2,299,758 | |
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| Home & Condo Resale** | 6,812 | 4,090 | 5,504 | |
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| Median Home Price | $286,600 | $276,200 | $249,300 | |
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| New Car Sales** | (Feb 05) 8,805 | (Jan 05) 8,700 | (Feb 04) 9,218 | |
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| Year-to-Date Building Permits (thru Feb.) æ | 2,641 in 2005 | 2,672 in 2004 | ||
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| Quarterly | Q4-04 | Q4-03 | % Change |
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| Taxable Retail Sales (000)ö (King, Snohomish and Island counties) | |||
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| Retail Trade | $6,477,802,463 | $6,182,629,840 | 4.8 |
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| — Building Materials/Hardware | 465,499,878 | 423,515,043 | 9.9 |
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| — General Merchandise | 1,083,300,461 | 985,346,297 | 9.9 |
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| — Food | 365,254,339 | 444,486,572 | -17.8 |
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| — Auto Dealers/Gas Stations | 1,231,012,122 | 1,186,304,249 | 3.8 |
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| — Apparel/Accessories | 418,839,484 | 435,998,343 | 10.5 |
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| — Furniture/Home Appliances | 838,826,785 | 777,078,008 | 7.9 |
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| — Eating & Drinking Places | 921,696,817 | 845,804,930 | 9.0 |
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| — Other/Misc. | 389,471,778 | 388,937,472 | 0.1 |
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| Services | $1,510,812,931 | $1,470,184,387 | 2.8 |
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| — Hotels | 222,050,948 | 210,007,949 | 5.7 |
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| — Personal | 95,379,438 | 93,464,797 | 2.0 |
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| — Business | 515,432,305 | 498,573,581 | 3.4 |
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| — Computer | 148,754,979 | 139,160,547 | 6.9 |
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| — Auto Repair | 329,722,272 | 332,263,771 | -0.8 |
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| — Other | 348,227,968 | 335,874,289 | 3.7 |
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Bases: Most references are to the three-county area of King, Snohomish and Island counties. Exceptions noted. Sources: Federal and state agencies, including the Wash. St. Employment Security Dept.
^ Seattle inflation is reported only in even-numbered months.
* The Washington State Bureau of Labor Statistics uses NAICS as of January 2003; historical data using SIC codes will not be comparable over time. Employment figures are by place of work rather than place of residence and do not include agriculture.
** New Car Sales and Home & Condo Resale data are for King, Snohomish and Pierce counties. Car Sales Source: R. L. Polk. Home Resale Source: Northwest Multiple Listing Service.
æ Building permits are for residential, privately owned units in the Seattle-Bellevue-Everett PMSA. Source: U.S. Dept. of Housing and Urban Dev.
ö Taxable Retail Sales includes SIC 52-59; Services SIC 70-89.
Source: Conway Pederson Economics, Inc.