ECONOMIC PULSE
An update on the local and national economy
Posted January 2006
The employment outlook for Puget Sound is encouraging
Jobs are out there — statewide claims for unemployment benefits in early December were 10.9 percent lower than a year ago. This is significantly better than the nation, where jobless claims were about the same as last year. In the Seattle area, employers are adding jobs.
The state of Washington added 74,800 net new jobs between November 2004 and November 2005. Of these gains, King County posted 30,100 jobs, Pierce 10,700 jobs and Snohomish 10,100 jobs. The three counties had 3.1 percent more people employed this November than at the same time last year, while the state gained 2.8 percent and U.S. posted only a 1.2 percent gain.
Job growth in Washington was strong in the second quarter, led by aerospace with a 10.6 percent increase, construction at 7.6 percent and software at 4.3 percent. A private Seattle economist, Roberta Pauer, predicted in November that by next summer the Seattle region might regain all of the positions lost during the recession. The three-county Seattle-Tacoma-Bellevue MSA’s unemployment rate hovers at 5.1 percent because people are moving here in search of jobs and are added to our labor force and unemployment numbers. The seasonally adjusted unemployment rate in the state is 5.6 percent, while the U.S. has a 5 percent rate.
How are the big employers faring?
PORTS: Shipping and Tourism
Did you know that seven of 10 Boeing sales are exported, as are six of 10 Microsoft sales? Or that one in five Washington jobs are supported by exports? That’s the finding of the state’s chief economist, Chang Mook Sohn.
The Seattle and Tacoma ports together are the third largest container shipping facility in the nation. The Port of Seattle hosted 28.8 million air passengers and 560,000 cruise ship passengers in 2004.
The Port of Seattle supports 36,853 employees, and the Aviation Division (Sea-Tac Airport) has 33,139 on-site jobs. The Port of Tacoma, which has three new terminals, employs 43,138, up from 28,400 in 2000. The Port of Everett has 805 employees in 2005.
AEROSPACE:
Boeing employs 62,100 in the state of Washington (including subsidiaries and contingent labor), and with new orders rolling in, more jobs are predicted for Boeing and its suppliers. Some suppliers are adding a plant or a warehouse, while others expect to hire from 10 to 50 more workers each. The forecast in the Puget Sound region is more aerospace jobs — the total will reach 70,500 in 2006 and 76,500 in 2007, according to Conway-Pedersen Economics, Inc.
SOFTWARE:
Software publishers in the state employ 40,000 workers; 30,300 are employed by Microsoft. Total software employment is forecast to grow steadily to an estimated 43,800 in 2007 statewide, according to the Washington Economic Forecast.
CONSTRUCTION:
The busy housing and office construction market means employment in the four-county Puget Sound region* is predicted to grow for the next 12 to 18 months, according to various forecasters. One factor in housing growth is that more people are moving here than are moving away – in 2005, there were 16,300 more people than in 2004, another 29,000 more forecast in 2006 and 28,600 more in 2007, according to Conway-Pedersen. Housing permits were estimated at 25,700 in 2005 and are forecast to be 28,200 in 2006 and another 28,200 in 2007. Total construction jobs were 101,000 in 2004, and 107,800 in 2005; 111,300 are predicted for 2006, and 116,100 for 2007.
HEALTH CARE:
The Workforce Training and Education Coordinating Board’s Health Care Personnel Shortage Task Force plans to present its annual report to the Washington State Legislature in January. The report is expected to state, "Washington’s health care personnel shortages continue to be severe and, without further action by government and industry, are projected to get worse due to an aging population and an aging health care workforce. Health care continues to top all industries in the number of job vacancies, representing 16 percent of all vacancies in 2005."
The crystal ball
The forecast is that jobs will grow by 290,000 in the next five years in the four-county region, according to the Central Puget Sound Economic Development District. It has an ambitious goal of creating 100,000 additional new jobs over the next five years, primarily in the fields of aerospace, information technology, life science and biotechnology, alternative energy and environmentally friendly businesses. The plan was developed by Prosperity Partnership, which includes 150 government, business, labor and non-profit groups. Total employment is currently 1,724,800, so 390,000 jobs is an increase of 22.6 percent or an average of 4.5 percent per year over the five-year period – half again more than the predicted employment increase of 3 percent.
Solid, steady growth is expected for almost every occupation in the Puget Sound. The local job increases are double that of the United States, which has a 1.3 percent to 1.6 percent growth rate.
* King, Kitsap, Pierce and Snohomish counties.
Sources:
U.S. Bureau of Labor Statistics, Washington Employment Security
Department, December 2005 "The Puget Sound Economic Forecaster"
from Conway-Pedersen Economics, Inc.; and various news stories
and industry data.
Puget Sound Economic Trends
| MONTHLY | Nov 2005 (P) | Oct 2005 | Nov 2004 |
| Rates | |||
| Purchasing Power U.S. Consumer Dollar | 50.6 | 50.2 | 52.4 |
| Inflation (CPI) U.S. | 197.6 | 199.2 | 191.0 |
| Inflation (Seattle-Bellevue-Everett)^ | N/A | 203.3 | N/A |
| Unemployment % (Seattle-Tacoma-Bellevue) | 5.1% | 4.9% | 5.2% |
| U.S. 30-Year Mortgage Rate % | 6.44% | 6.21% | 5.83% |
| Economic Indicators | |||
| Total Employment* (Seattle-Tacoma-Bellevue) | 1,673,100 | 1,662,300 | 1,616,000 |
| - Professional & Business Services | 222,700 | 221,500 | 209,400 |
| - Retail Trade | 184,300 | 178,700 | 178,500 |
| - Government | 259,400 | 254,100 | 260,600 |
| - Aerospace | 66,400 | 65,600 | 60,100 |
| - Software Publishers | 40,300 | 40,500 | 38,400 |
| Airport Passengers (Sea-Tac) | 2,226,447 | 2,318,174 | 2,191,469 |
| Home & Condo Sale*** | 6,190 | 6,973 | 5,908 |
| Median Home Price*** | $312,400 | $313,400 | $267,200 |
| Passenger Vehicle Registrations** | Oct. 2005: 10,540 | Sept. 2005: 11,086 | Oct. 2004: 10,473 |
| Year-over-Year Housing Permits (annual est.) | 25,700 in 2005 | 24,600 in 2004 | |
| Taxable (000) (King, Snohomish, Kitsap and Pierce counties) | |||
| Quarterly | Q2, 2005 | Q2, 2004 | % Change |
| - Building Materials/Garden Supplies | $748,857,912 | $722,878,704 | 3.6% |
| - General Merchandise | $1,134,694,441 | $1,043,869,732 | 8.7% |
| - Food & Beverage | $411,330,560 | $461,835,263 | -10.9% |
| - Motor Vehicles & Parts | $1,940,879,121 | $1,802,797,778 | 7.7% |
| - Gas Stations & Convenience Stores w/Pumps | $144,207,650 | $138,291,745 | 4.3% |
| - Apparel/Accessories | $544,309,881 | $509,389,353 | 6.9% |
| - Furniture & Home Furnishings | $351,276,952 | $306,148,087 | 14.7% |
| - Appliances & Electronics | $428,739,694 | $359,577,087 | 19.2% |
| - Food Services & Drinking | $1,269,490,603 | $1,165,094,108 | 9.0% |
| - Hotels | $267,522,504 | $234,096,386 | 14.3% |
| - Personal | $144,895,321 | $125,922,548 | 15.1% |
| - Finance, Insurance | $175,879,007 | $176,343,139 | -0.3% |
| - Repair & Maintenance | $319,034,217 | $298,098,723 | 7.0% |
^ Seattle inflation is reported only in even-numbered months.
*The Washington State Bureau of Labor Statistics uses NAICS as of January 2003
** New Passenger Registrations is for King, Snohomish and Pierce counties. Source: R. L. Polk.
*** Home Sales data is King, Snohomish, Pierce and Kitsap counties. Source: Northwest Multiple Listing Service.
†Taxable Retail Sales - only a few major categories are listed. Source: Washington Department of Revenue
‡Housing permits are for residential, privately owned units. Source: December 2005 "Puget Sound Economic Forecaster" by Conway-Pedersen Economics, Inc.
Bases: Most references are to the three-county area of King, Snohomish and Island counties. Exceptions noted.
Sources: Conway-Pedersen Economics, Inc.; Auto-R.L. Polk Co.; Housing sales & home prices-Northwest Multiple Listing Service; Inflation/CPI-U.S. Department of Labor Bureau of Labor Statistics; Employment-Washington Labor Market & Economic Analysis Regional Labor Economist; Mortage rate-HSH Associates; Airport-Sea-Tac Operations; Building Permits-U.S. Census Bureau; Retail Sales-Washington Department of Revenue