We’ve set the stage for what’s in store for the global, national and regional economies in 2016. To review: global, a lot of problems most everywhere you look, meaning no help for the U.S.; national, 2015’s slow growth might look good in comparison; regional, tech and aerospace good, ag and some other sectors not so hot.
Now let’s bring it down to the micro level: How are Tacoma and Pierce County positioned to cope with what’s coming?
According to the November numbers from the Employment Security Department, Tacoma and Pierce County putter along at an unemployment rate of 5.7 percent, hardly stellar when compared to King County’s 4.6 percent, but somewhat better than, say, Grant County, which despite an infusion of big manufacturing projects and jobs is at 7 percent, or, closer to home, Lewis (7.5) or Yakima and Grays Harbor counties (both 8.0 percent).
That muddled and muddling-along middle is likely where Tacoma and Pierce County will ride out the storm in 2016.
This subregion is not going to enjoy the tech-fed boom that fuels Seattle’s economy, for the simple reason that it doesn’t have much of a tech economy to speak of. Even if Seattle’s tech sector cools, or even if Jeff Bezos suddenly stops gobbling up commercial real estate, there’s still enough momentum created by last year’s growth, and enough else going on this year, that the laments over having too much of a good thing aren’t likely to diminish in volume. One might as well curse the rain as envy Seattle’s “even we can’t mess this up” economy, for all the good either might accomplish.
But Tacoma and Pierce County aren’t going to take the clobbering that some smaller communities in the state are facing because a major employer in town has or will be shutting down. The economy here is too broad and diverse to be taken down by a large single loss, not that it wouldn’t be noticed or felt. Given that Tacoma was dealt two near-concurrent blows — the Russell departure and the recession — it’s almost a marvel that the jobless rate of 5.7 percent isn’t uglier.
One reason it isn’t is aerospace. King and Snohomish counties sop up all the attention when it comes to Boeing, but Boeing is a presence in this county through its own facility at Frederickson and a web of suppliers throughout the area. Aerospace has been known to have its boom and bust cycles, and some huge long-term questions about the sector’s future in the Puget Sound region persist, but those cycles aren’t likely to turn and those questions aren’t likely to be resolved in such a way as to imperil aerospace’s continued economic contribution.
For 2016, at least.
What else do we have? Tacoma’s role as a shipping hub is an interesting proposition in 2016. As discussed last week, weak economies and a strong dollar won’t help with the stuff we export, particularly agricultural commodities such as Washington wheat. But if those weak economies compel those countries to boost exports and if the strong dollar compels Americans to buy more imports, maybe that makes Tacoma’s port and warehouse operators net winners.
The county’s role as a major center for military facility and operations is similarly a mixed bag. The armed forces are cutting positions by the thousands, putting a lot of men and women out in the workforce. To the extent that answers employers’ continuing complaints about finding qualified, trainable and dependable workers, that could be a plus for everyone. To the extent that some of those leaving the military have an entrepreneurial bent and start companies that will be the foundation of regional growth, so much the better.
The military’s role in the local economy, like that of aerospace and the ports, is subject to some significant long-term decision-making. Guessing what those decisions will be can, like the decisions themselves, be safely put off until 2017, given the presence of an election campaign, and how reluctant candidates will be to propose something unpopular.
But the region also should not count on any positive effect from proposed megaprojects (the Tideflats liquid methanol plant, completion of state Route 167 from Puyallup to Interstate 5) for 2016. Even if they’re actually begun, those too are stories for 2017 and 2018 and beyond.
For now, Tacoma and Pierce County can carve away at that unemployment rate, or at least hold it steady in the face of whatever unpleasantness the global and national economies dish out in 2016, with its existing portfolio of industries and jobs, supplemented by smallish ventures, projects and improvements spread out over lots of industries. It’s not a get-rich-quick scenario for this area, but there aren’t many of those to be had anywhere in the country. All right, Seattle excepted. And in 2016, maybe not even there.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at email@example.com.