The Puget Sound Regional Economy 2017
Seattle Rotary 4 January 4, 2017
Chris Mefford President & CEO About Community Attributes
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1/3/2017 Puget Sound Economy and Outlook 2 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 Puget Sound Economy and Outlook 3 Fundamental #1
We are a Washington State economy Jan 4, 2017 76%58%84%68%41% 138,500 3.4 million jobs Whatcom + Skagit WAWAWAWA Jobs JobsJobsJobs 7.3 million residents 283,700 Snohomish
50,000 farm jobs 1,385,100 245,800 90,300 44,800 King Spokane Kitsap Wenatchee
308,700 83,900 Pierce Yakima
112,500 110,400 Thurston Kennewick
Source: CAI, ESD, PSRC 1/3/2017 Puget Sound Economy and Outlook 5 Jan 4, 2017 138,500 3.4 million jobs Whatcom + Skagit 7.3 million residents 283,700 Snohomish
136,100 50,000 farm jobs 1,385,100 245,800 90,300 44,800 King Spokane Kitsap Wenatchee
308,700 83,900 Pierce Yakima
112,500 110,400 Thurston Kennewick
Source: CAI, ESD, PSRC 1/3/2017 Puget Sound Economy and Outlook 6 Jobs Forecast, 2015-2018
7 Real Annual GDP Growth Seattle Metropolitan Area and U.S.
Sources: U.S. Bureau of Economic Analysis, 2016; Community Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 8 Real GDP Growth, 2010-2015 Seattle Metropolitan Area
Sources: U.S. Bureau of Economic Analysis, 2016; Community Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 9 Annual Employment Historic and forecast, Central Puget Sound Region
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.
1/3/2017 Puget Sound Economy and Outlook 10 Seattle Employment Quarterly employment, year-over-year change, Seattle MSA
1.7 million jobs in the region in Q3. Nearly 4% year-over- year increase in Q3.
Sources: Washington State Employment Security Department, 2016; Community Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 11 Unemployment Rate Seattle Metro Area and Washington State
Sources: Washington State Employment Security Department, 2016; Community Attributes Inc., 2016. Metro area represented by the Seattle-Bellevue-Everett Metropolitan District. Not seasonally adjusted. 1/3/2017 Puget Sound Economy and Outlook 12 Productivity Gains Real GDP per worker, Seattle-Tacoma-Bellevue, WA
2015 $
2001-2014 CAGR: 1.4%
2001-2014 CAGR: 1.0%
2001-2014 CAGR: 0.7%
Sources: U.S. Bureau of Economic Analysis, 2016; Community Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 13 Fundamental #2
Our quality of life is our greatest economic asset How do we do better? Help Grow, • Branding, marketing, promotion Recruit •Trade shows Businesses • Site selection support
•Workforce • Tax policies Retain & Sustain supports • Entrepreneurial • Higher education support Businesses, • Permitting, Entrepreneurs business support
• Basic needs • Parks & trails •Housing • Cultural assets Provide Livable • Transportation • Vibrant Communities • Schools & early neighborhoods childhood • Public safety Puget Sound Regional Growth
Annual Change in Jobs & People Change in Jobs Net Migration
Office of Financial Management, Washington State Employment Security Department
16 Growth by City
Population Change, 2010-2015 King County Population Growth 2010-2015 Growth Less Annexations
Office of Financial Management King County Jobs: Housing Units
Jobs to Housing Units Ratios
Office of Financial Management, Puget Sound Regional Council Household Forecast, 2015-2018
20 Population Change King County and the U.S., 2000-2016
Sources: Washington State Office of Financial Management, 2016; U.S. Census Bureau, 2016; Community Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 21 Real Median Household Income Indexed to 1989
Sources: Washington State Office of Financial Management, 2016; U.S. Census Bureau, 2016; Community Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 22 Income Gains Percentage change in real wages (2015 $), 2009-2015, Seattle-Tacoma-Bellevue, WA
Sources: Washington State Employment Security Department, 2016; Community Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 23 Middle Wage Jobs by Occupation Group Jobs that pay between $38,000 and $77,000 in King County
• 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).
1/3/2017 Puget Sound Economy and Outlook 24 Middle Wage Openings by Sector Jobs that pay between $38,00 and $77,000 in King County, 2015
Total Middle Wage Jobs • The Services sector 127,600 had 6,000 middle wage job openings in 2015, 68,700 the most of any sector. 57,300 • Information had the highest growth rate of 57,000 middle wage jobs from 51,900 2014 to 2015. In 2015, 4.9% of the sector’s 40,900 middle wage jobs were from new openings. 40,000
38,100
28,400
27,900
Sources: Washington State Employment Security Department, 2016; Bureau of Labor Statistics, 2016; Community Attributes Inc., 2016. 1/3/2017 Puget Sound Economy and Outlook 25 Fundamental #3
Trade, Import Capital, or Decline Circular Flows of the Economy
29 Washington State Goods Exports, 2002-2015
Aerospace All other exports
Sources: U.S. Census Bureau, 2016; Community Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 30 Export Markets for Washington Top merchandise and commodity markets, 2015
Sources: U.S. Census Bureau, 2016; Community Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 31 Workers in Foreign Invested Firms Seattle Region, 2007-2014 (estimated)
• 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.
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.
1/3/2017 Puget Sound Economy and Outlook 32 Strengths & Growth Central Puget Sound Region
U.S. Bureau of Labor Statistics, WA State ESD
33 Aerospace
U.S. Bureau of Labor Statistics, WA State ESD
34 Direct Jobs in Washington
• Aerospace employment has remained stable in recent years. • Related industries added 3,700 jobs year-over-year in 2015.
Sources: Washington State Employment Security Department, 2016; Washington Aerospace Partnership, 2013 and 2015; Community Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 35 Aerospace & Related Jobs by County, 2015
Sources: Washington
State Employment
Security Department,
2016; Washington
Aerospace
Partnership, 2013 and
2015; Community
Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 36 Aerospace Business Revenues (2015 $)
Sources: Washington Department of Revenue, 2016; Federal Reserve Bank of St. Louis, 2016; Community Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 37 Boeing Aircraft Forecast
Boeing currently has a backlog of 5,635 orders.
Source: The Boeing Company, 2016.
1/3/2017 Puget Sound Economy and Outlook 38 What to Watch 2017: Aerospace
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
40 Information
U.S. Bureau of Labor Statistics, WA State ESD
41 Information & Communication Technology
Sources: U.S. Bureau of Labor Statistics, 2016; Community Attributes Inc., 2016.
1/3/2017 Puget Sound Economy and Outlook 42 IT Industries Circle size indicates relative size (jobs) of Industry and Tech Units
43 Occupational Concentration (Location Quotient) Washington State and Seattle MSA, 2014
44 What to Watch 2017: Technology
• 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: Manufacturing
• Key local industries – Ship Building – Food Production – Craft Manufacturing – Construction Related • China • Makers spaces • Small businesses
46 Other Exports
47 Maritime Jobs, 2012-2015
• 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.
Sources: U.S. Census Bureau, 2016; Washington State Employment Security Department, 2016; Community Attributes Inc., 2016. • This represents a compound annual growth rate of 2.7%.
1/3/2017 Puget Sound Economy and Outlook 48 Defense Spending in Washington
• 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.
1/3/2017 Puget Sound Economy and Outlook 49 Summaries Headwinds
• Uncertainty with federal policies • Weak global growth • Slowdown in China • Defense spending cuts • Political and social instability
1/3/2017 Puget Sound Economy and Outlook 51 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
1/3/2017 Puget Sound Economy and Outlook 52 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.
1/3/2017 Puget Sound Economy and Outlook 53 Thank You