Local business leaders were treated to some good news Friday morning.
Pierce County’s economy will grow by nearly 3 percent in 2013. Unemployment will fall, home sales will rise, hotels will open, personal income will rise and retail sales will improve. That news comes from two longtime University of Puget Sound economists who presented their analysis at the annual Tacoma-Pierce County Chamber Horizons Forecast Breakfast.
Professors Bruce Mann and Douglas Goodman made their 25th and final appearance Friday at the Chamber’s annual meeting. They presented their look at the county’s economy as compiled in their Pierce County Economic Index.
They told an audience of some 550 business leaders and Chamber members that happier days are riding the South Sound horizon.
In their executive summary, the professors predicted, “The pace of Pierce County’s recovery will improve during 2013.”
By the end of the year, “the economy will have completed 14 consecutive quarters of increasing economic activity.”
“It’s been a rough journey,” Mann began. “It’s been a slow boat to China on rough seas.”
The Great Recession fostered something of a lahar in the economic index between 2008 and 2010, slipping 3.25 percent. In the third quarter of 2010, Goodman said, we “boarded the Little Engine that Could.”
Things got better, and better they will continue to be. As Mann said, “We will pick up speed this year.”
“We’re headed in the right direction,” said Goodman.
Among the highlights:
• The economic index will see a moderate increase of 2.75 percent this year, the professors promised. The positive factors leading to this rosy prediction include international trade, the local military presence, aerospace industries, health care, educational institutions and the construction sector.
• At Joint Base Lewis-McChord, 55,000 troops and 40,000 dependents will help fuel the local economy, along with $540 million in construction at military installations.
• Add trade, distribution and warehousing, and the coming of the Grand Alliance shipping group to the Port of Tacoma.
• In addition, “meds and eds” – growth in health care spending and in the educational sector will help improve conditions.
• And at last, prepare for an increase in residential and commercial construction — for the latter, count construction of Amazon’s new distribution center in DuPont.
• But watch out for Europe again this year, the pair cautioned, and there’s the possibility that Washington, D.C., will muddy the recovery with debt and deficit reductions and reductions to defense spending.
• The labor market might also slow the recovery with wage increases and bargaining impasses.
• Where 17,000 jobs were lost to the Great Recession, expect a total of 11,500 new jobs in their place by the end of the year. Unemployment, as low as 4.8 percent in 2007, will fall to 7.9 percent this year from a high of 10.2 percent in 2010.
Not great, but better than it was.
• Total personal income will continue growing, they said, up $2 billion this year – or 5.5 percent – from last year.
• Annual retail sales will increase a modest a modest 2.2 percent, with dollar volumes returning to levels seen in 2005-2006.
• Housing sales, Mann said, will rise “back to the 2008 activity level.” The housing index will this year see an annual gain of 7.6 percent thanks to higher incomes, low interest rates and affordable prices. Demand for multifamily housing will see weakening demand, what with competition from the single-home market and new units coming available. Tacoma’s North End and the Peninsula will see stronger interest, however.
• And the commercial real estate market will remain flat, they said, although there will be a strong demand for medical space. More on the bright side, look for new hotels in Puyallup, Tacoma and DuPont, and retail space should be opening in Gig Harbor, Parkland, Edgewood, University Place and at Freighthouse Square.
Overall it will be “a pretty nice trip,” Goodman said.
Looking back, Mann said, “It has been fun and people seemed to enjoy it.”
“We have enjoyed the ride,” said Goodman, before the pair handed their baton to the two professors from Pacific Lutheran University who will take control of — and responsibility for — the PCEI.
Also featured Friday was keynote speaker Kimberly Harris, president and CEO of Puget Sound Energy — speaking on the future of energy, especially natural gas, liquid natural gas and compressed natural gas.
C.R. Roberts: 253-597-8535