Puddles were forming on city streets, but inside the Greater Tacoma Convention & Trade Center on Wednesday morning the sun shone as more than 500 business leaders gathered to gauge the future as described by the latest version of the Pierce County Economic Index.
The data were optimistic across most sectors.
The 31st version of the annual Horizons breakfast, sponsored by the Tacoma-Pierce County Chamber, saw PCEI growth trending at a likely 2.4 percent in 2016.
“Things are looking up from last year,” said Martin Wurm, professor of economics at Pacific Lutheran University.
To bolster his prediction, he noted felicitous factors including revived construction employment, expansion at the Port of Tacoma and the University of Washington Tacoma, and increased employment in the construction sector.
For the overall local labor market, Wurm predicted “a gradual shift away from blue collar to the service industry,” citing the leisure industry in particular. As part of that argument, he described the area’s participation in the 2015 U.S. Open as an investment in “the rising stock that is Pierce County.”
He also said, “We still have a long way to go.”
Neal Johnson, principal at Sound Resource Economics and a former colleague of Wurm at PLU, presented visual evidence of a strong recovery in the housing market as delinquency rates have improved alongside the falling number of homes that are “underwater” or in “negative equity.”
Among other offerings Wednesday:
▪ Per capita personal income will increase by 1.2 percent in 2016.
▪ Employment grew at an average annual rate of 3.6 percent in 2015, and is predicted to grow by 3.4 percent by the end of 2016.
▪ From a peak of 10.7 percent in the second quarter of 2010, the county’s unemployment rate was an estimated 6.8 percent in 2015 and “has potential to drop in 2016, but at a smaller rate.”
▪ On the decreasing price of oil, the PCEI narrative notes, “That is a trend we expect to continue.”
▪ Retail spending, which “has seen a fairly strong resurgence since 2013,” will continue the trend with a predicted increase of 5.1 percent, for a total of $6.6 billion (in 2009 dollars) in 2016. Last year saw total sales of $6.3 billion.
▪ In single-family housing, Wurm and Johnson offered that “it now appears that the housing market won’t regain 2003 pre-bubble levels until the third or fourth quarter of 2016, at best.” Activity, measured by new listings and closed sales, marked an 8.3 percent gain in 2015 and is forecast to increase 4.2 percent this year.
▪ At the Port of Tacoma, grain exports fell 25 percent in 2015, and “2016 expects no change.” Auto imports will increase in 2016, and container volume at the Northwest Seaport Alliance is predicted to grow 2.1 percent in 2016.
Following the gathering, Chamber President and CEO Tom Pierson offered, “People are more optimistic, but still cautious.”
He listed a handful of reasons why the optimism is warranted, including stability at JBLM, the port alliance, improved transportation infrastructure and an increase in the graduation rates at Tacoma Public Schools.
C.R. Roberts: 253-597-8535