The Puget Sound Regional Economy 2017 Seattle Rotary 4 January 4, - - PowerPoint PPT Presentation

Chris Mefford

President & CEO

The Puget Sound Regional Economy 2017

Seattle Rotary 4 January 4, 2017

About Community Attributes

1/3/2017 Puget Sound Economy and Outlook 2

Regional Economics Land Use Economics Community & Economic Development Data Dashboards & Business Intelligence Information Design Surveys & Market Research

Three Fundamentals of Our Economy

• 1. We are a statewide economy
• 2. Our quality of life is our greatest economic asset
• 3. Trade, important capital, or decline

1/3/2017 3 Puget Sound Economy and Outlook

Fundamental #1 We are a Washington State economy

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1,385,100 King 283,700 Snohomish 308,700 Pierce 112,500 Thurston 245,800 Spokane 90,300 Kitsap 138,500 Whatcom + Skagit 44,800 Wenatchee 50,000 farm jobs

Jan 4, 2017 3.4 million jobs 7.3 million residents

41%

WA Jobs

58%

WA Jobs

68%

WA Jobs

76%

WA Jobs

84%

WA Jobs

110,400 Kennewick 83,900 Yakima

Source: CAI, ESD, PSRC

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1,385,100 King 283,700 Snohomish 308,700 Pierce 112,500 Thurston 245,800 Spokane 90,300 Kitsap 138,500 Whatcom + Skagit 44,800 Wenatchee 50,000 farm jobs

Jan 4, 2017 3.4 million jobs 7.3 million residents

110,400 Kennewick 83,900 Yakima

Source: CAI, ESD, PSRC

136,100

7

Jobs Forecast,

2015-2018

Real Annual GDP Growth

Seattle Metropolitan Area and U.S.

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Sources: U.S. Bureau of Economic Analysis, 2016; Community Attributes Inc., 2016.

Real GDP Growth, 2010-2015

Seattle Metropolitan Area

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Sources: U.S. Bureau of Economic Analysis, 2016; Community Attributes Inc., 2016.

Annual Employment

Historic and forecast, Central Puget Sound Region

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2016 employment growth of 3.5%. Employment in 2017 projected to grow 2.2%.

Sources: Washington State Employment Security Department, 2016; Community Attributes Inc., 2016.

Seattle Employment

Quarterly employment, year-over-year change, Seattle MSA

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Sources: Washington State Employment Security Department, 2016; Community Attributes Inc., 2016.

1.7 million jobs in the region in Q3. Nearly 4% year-over- year increase in Q3.

Unemployment Rate

Seattle Metro Area and Washington State

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Sources: Washington State Employment Security Department, 2016; Community Attributes Inc., 2016. Metro area represented by the Seattle-Bellevue-Everett Metropolitan District. Not seasonally adjusted.

Productivity Gains

Real GDP per worker, Seattle-T acoma-Bellevue, WA

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Sources: U.S. Bureau of Economic Analysis, 2016; Community Attributes Inc., 2016.

2015 $

2001-2014 CAGR: 1.4% 2001-2014 CAGR: 1.0% 2001-2014 CAGR: 0.7%

Fundamental #2 Our quality of life is our greatest economic asset

• Branding, marketing,

promotion

• Trade shows
• Site selection support

Help Grow, Recruit Businesses

• Workforce

supports

• Higher education
• Permitting,

business support

• Tax policies
• Entrepreneurial

support

Retain & Sustain Businesses, Entrepreneurs

• Basic needs
• Housing
• Transportation
• Schools & early

childhood

• Public safety
• Parks & trails
• Cultural assets
• Vibrant

neighborhoods

Provide Livable Communities

How do we do better?

Annual Change in Jobs & People Office of Financial Management, Washington State Employment Security Department

16

Change in Jobs Net Migration

Puget Sound Regional Growth

Growth by City

Population Change, 2010-2015

Office of Financial Management 2010-2015 Growth Less Annexations

King County Population Growth

Office of Financial Management, Puget Sound Regional Council Jobs to Housing Units Ratios

King County Jobs: Housing Units

20

Household Forecast,

2015-2018

Population Change

King County and the U.S., 2000-2016

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Sources: Washington State Office of Financial Management, 2016; U.S. Census Bureau, 2016; Community Attributes Inc., 2016.

Real Median Household Income

Indexed to 1989

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Sources: Washington State Office of Financial Management, 2016; U.S. Census Bureau, 2016; Community Attributes Inc., 2016.

Income Gains

Percentage change in real wages (2015 $), 2009-2015, Seattle-T acoma-Bellevue, WA

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Sources: Washington State Employment Security Department, 2016; Community Attributes Inc., 2016.

Middle Wage Jobs by Occupation Group

Jobs that pay between $38,000 and $77,000 in King County

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• At an average of 1.3

earners per households, jobs that support middle household incomes range in pay from $38,000 to $77,000 per year.

• Jobs in this wage range

increased by 10,000 in Seattle from 2005 to 2013 (0.3% CAGR).

• All other jobs increased

by 135,000 (1.5% CAGR).

Total Middle Wage Jobs 127,600 68,700 57,300 57,000 51,900 40,900 40,000 38,100 28,400 27,900 Sources: Washington State Employment Security Department, 2016; Bureau of Labor Statistics, 2016; Community Attributes Inc., 2016.

Middle Wage Openings by Sector

Jobs that pay between $38,00 and $77,000 in King County, 2015

• The Services sector

had 6,000 middle wage job openings in 2015, the most of any sector.

• Information had the

highest growth rate of middle wage jobs from 2014 to 2015. In 2015, 4.9% of the sector’s middle wage jobs were from new openings.

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Fundamental #3 Trade, Import Capital,

• r Decline

Circular Flows of the Economy

29

Washington State Goods Exports, 2002-2015

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Sources: U.S. Census Bureau, 2016; Community Attributes Inc., 2016.

Aerospace All other exports

Export Markets for Washington

T

• p merchandise and commodity markets, 2015

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Sources: U.S. Census Bureau, 2016; Community Attributes Inc., 2016.

Workers in Foreign Invested Firms

Seattle Region, 2007-2014 (estimated)

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Sources: U.S. Bureau of Economic Analysis, 2016; U.S. Bureau of Labor Statistics, 2016; Community Attributes Inc., 2016; Brookings Institute, 2016; Rhodium Group, 2016.

• Washington ranks

35th in FDI jobs/total workforce (2014).

• Seattle ranked 25th

in cumulative greenfield FDI, 2009-2015.

• Washington ranked

25th in Chinese FDI from 2000-2015, and 29th on per capita basis.

U.S. Bureau of Labor Statistics, WA State ESD

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Strengths & Growth

Central Puget Sound Region

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Aerospace

U.S. Bureau of Labor Statistics, WA State ESD

Direct Jobs in Washington

• Aerospace employment has remained stable in recent years.
• Related industries added 3,700 jobs year-over-year in 2015.

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Sources: Washington State Employment Security Department, 2016; Washington Aerospace Partnership, 2013 and 2015; Community Attributes Inc., 2016.

Puget Sound Economy and Outlook

Aerospace & Related Jobs by County, 2015

36

Sources: Washington State Employment Security Department, 2016; Washington Aerospace Partnership, 2013 and 2015; Community Attributes Inc., 2016.

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Aerospace Business Revenues (2015 $)

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Sources: Washington Department of Revenue, 2016; Federal Reserve Bank of St. Louis, 2016; Community Attributes Inc., 2016.

Puget Sound Economy and Outlook

Boeing Aircraft Forecast

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Source: The Boeing Company, 2016.

Boeing currently has a backlog of 5,635 orders.

Boeing

• Historic backlog; productivity
• Significant dependence on China
• Major price competition underway
• Local jobs part of nationwide

capacity puzzle

• Hiring needs still great; fill open positions

Other Aerospace

• Space! Emerging industry?
• Continued growth in smaller companies
• Supply chain diversification

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What to Watch 2017: Aerospace

41

Information

U.S. Bureau of Labor Statistics, WA State ESD

Information & Communication Technology

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Sources: U.S. Bureau of Labor Statistics, 2016; Community Attributes Inc., 2016.

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IT Industries

Circle size indicates relative size (jobs) of Industry and Tech Units

44

Occupational Concentration (Location Quotient)

Washington State and Seattle MSA, 2014

• TALENT, TALENT, TALENT
• Continued growth in Cloud

Services

• Amazon and Microsoft
• Virtual Reality and Augmented

Reality

• More tech in other industries
• More company headquarters
• Start-ups
• IPOs
• Funding …

45

What to Watch 2017: T

echnology

46

• Key local industries

– Ship Building – Food Production – Craft Manufacturing – Construction Related

• China
• Makers spaces
• Small businesses

What to Watch 2017: Manufacturing

47

Other Exports

Maritime Jobs, 2012-2015

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• Maritime Sector

employment increased by 5,200 jobs from 2012 to 2015, largely driven by growth in the commercial fishing and seafood products subsector and boat and ship building, repair, and maintenance.

• This represents a

compound annual growth rate of 2.7%.

Sources: U.S. Census Bureau, 2016; Washington State Employment Security Department, 2016; Community Attributes Inc., 2016.

Defense Spending in Washington

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• Defense industry

contracts supported 56,300 jobs in Washington in 2014.

• Additional 100,000

civilian and military defense personnel in state.

Sources: Washington Military Alliance, 2015; Community Attributes Inc., 2015.

Summaries

Headwinds

• Uncertainty with federal policies
• Weak global growth
• Slowdown in China
• Defense spending cuts
• Political and social instability

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Tailwinds

• Strong foundation in jobs, incomes
• Global presence established and growing
• Continued talent migrating to Greater Seattle
• Continued growth in tech industry overall
• Real estate investment in region
• Boeing aircraft orders and backlog

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Synopsis and Takeaways on Future Growth

• Employment is very high, incomes are high
• Strong, tradable industries will support continued growth
• Major concerns are global in nature—declines in trade and

economic softening in major export markets could weaken growth in the region.

• Seattle home to major hubs in ICT, aerospace, and more—

strong prospects for growth, assuming trade is not disrupted.

• Growth has not been even in the region. Housing

increasingly unaffordable for many.

• Downward trend in globalization.

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Thank You