Pierce County’s economic forecast looks good for 2017 as jobs and per-capita income are on the rise amid global political winds of change.
That was the sentiment from Wednesday morning’s Horizons Economic Forecast, hosted by the Tacoma-Pierce County Chamber of Commerce at the Greater Tacoma Convention & Trade Center.
Jeffrey Kravetz, regional investment director for US Bank, offered the keynote, which was a national-international perspective on today’s business climate, in which global factors such as politics abroad increasingly offer signals for U.S. interests.
Kravetz, who believes we are at an “inflection point,” noted the populist rise among European countries, reflected in Brexit and the Italian referendum of last year, and advised attendees to watch what happens in the German general election and French presidential election this year. Donald Trump’s election in this country’s presidential election also had its roots in its own domestic populist movement.
Kravetz sees positive signs in Trump’s economic agenda of tax reform, deregulation of key industries and increased infrastructure spending with private enterprise shouldering more of the burden.
One of his points of investment guidance for 2017 was to stick to a plan to stay fully diversified.
So how do investors stick with their plans, in a world where Trump’s tweets can quickly move markets?
“If you read the news every day, and follow stock prices, they can be extremely volatile in the short term, for a variety of reasons,” Kravetz told The News Tribune after the event.
“So, we advise our clients to really look at longer term trends and see where the economy is now from a historical perspective, what’s driving it higher, and are the numbers there to support either a better economy or a better stock market. We believe that both of those exist today, with strong economic data, and then the prospect of some deregulation, infrastructure spending, and maybe some corporate tax reform, which can be a really powerful catalyst for the market and the economy to move higher.”
Dr. Neal Johnson of Sound Resource Economics presented the state of Pierce County’s economic health. The highlights from the executive summary of the county economic index:
▪ Unlike previous periods when local jobless rates were driven by a lack of jobs, “the current outlook is constrained instead by the size of the qualified workforce,” according to the report summary distributed at Wednesday’s meeting. “This means that many of Pierce County’s unemployed are unqualified for the positions or lack the soft skills to obtain or retain employment.”
▪ On the flip side, there was a 3.6 percent rise in labor force participation in 2016, which outpaced population growth. “Unfortunately, the increase may only be 1.5 percent in 2017,” the report said.
▪ Approximately 135,000 Pierce County residents work outside the county, and that number is expected to grow as lower housing prices compared with the Seattle metro attract more people to Pierce County.
▪ A 2.2 percent growth in jobs projected for 2017 in Pierce County is expected to create an additional 6,800 jobs.
▪ 2017 per capita income is expected to rise 3.1 percent, driven by construction growth and assuming local workers fill those jobs.
▪ In housing activity, new listings, according to the index, were up 8 percent in 2016 and closed sales up 10.5 percent.
▪ Since 2013, a 9.9 percent rise in median incomes and 22 percent decline in mortgage rates have helped to offset rising home prices in the county, but rising mortgage rates obviously will affect affordability in 2017.