After a fairly robust 2019, slower economic growth is anticipated for the Tacoma-Pierce County region for 2020.
That seems to be the overriding message in this year’s Pierce County Economic Index report, presented this week at the Tacoma-Pierce County Chambers’s Horizons Economic Forecast breakfast at the Greater Tacoma Convention Center.
The report, pulled together by Neal Johnson of Sound Resource Economics, is compiled annually. Last year’s presentation emphasized uncertainty given the partial government shutdown at the time. This year’s report shows 2019 actually offered areas of surprising growth.
"Income growth in 2020 is forecast to continue, with a 3.2 percent increase in total real personal income and a 1.2 percent gain in real personal income per capita.”
It also notes “a likely decrease in the number of workers who are employed only part-time for economic reasons, which has continued to see declines at the state level.”
WHERE IS EVERYONE WORKING?
There’s no question job creation is happening here and elsewhere, much of it in King County.
Overall, just about half of employed residents from Pierce County work somewhere else, and lower housing costs here may continue reinforcing the live here, work somewhere else motif.
About 35 percent of Pierce County’s employed residents worked in King County in 2017, the latest year for data, according to the report.
“The big surprise in the 2018 labor data was the relatively weak growth in both the labor force (up 2.1 percent) and the number of employed Pierce County residents (up 2.3 percent) compared to the higher 2.7 percent growth in in-county jobs,” the report states. “This was reversed in 2019, with a 4.0 percent jump in the labor force and a 3.8 percent increase in the number of employed Pierce County residents, with in-county jobs increasing only 1.9 percent.”
With more people looking for work here, the county has struggled competing with its neighbor to the north in terms of job creation.
“Pierce County’s ratio of jobs to employed residents, which increased from 2010 to 2015, has since trended downwards,” the report states. “While the long-term trend for Pierce County has been a gradual increase in this ratio, indicating more local jobs available per Pierce County worker, the recent trend likely indicates local job creation is being swamped by the higher job growth outside of the county.”
Construction saw the most jobs added, 1,700. Leisure and hospitality along with professional and business services sectors each added 1,400 jobs, with growth slowing in trade, transportation and utilities, government, and education and health services, which combined added 1,000 jobs in 2019, according to the report.
“While in-county job growth is expected to continue, it will be at a slower rate, with approximately 6,225 jobs added in 2019 and another 5,300 forecast for 2020, bringing Pierce County nonfarm employment to 335,000 by the end of 2020,” the report states. “The number of employed Pierce County residents grew by an impressive 15,100, or 3.8 percent, in 2019. The forecast for 2020 is for 3.0 percent growth, with the total number of employed reaching 439,300 by the fourth quarter of 2020.”
“The higher employment gains relative to in-county job growth runs counter to the nearly equal jobs and employment growth seen in 2018.”
Other report highlights:
Concerns over tariffs and retaliatory tariffs kept recession fears lingering in 2019 but also kept 30-year mortgage rates low. Those looking for homes in Pierce County faced a drop in new listings for inventory compared with 2018, along with rising home prices here (though still much lower than in King County). Permits for new construction for homes and multifamily units in the county also were down a combined 3.7 percent through November.
An estimated population increase of more than 17,300 per year for 2019 and 2020 by the index “will continue to keep rental rates above an inflationary increase.”
THE PORT OF TACOMA
The port, operating as part of the Northwest Seaport Alliance with the Port of Seattle, definitely has taken its hits when it comes to international tariff battles.
According to the report: “While a threat of further tariffs has been withdrawn, and tariffs have been reduced, some of the impact has been built into the current trade flow and the impact is likely to linger through 2020. Consequently, 2020 container volumes are likely to be significantly lower than forecast.”
In regard to other competitors, “Based on traffic data through November 2019, the NWSA’s share of West Coast container traffic is projected to edge back up to 13.4 percent for the full year. Whether the Canadian ports of Prince Rupert and Vancouver resume capturing market share is a bit clouded due to the U.S. tariffs.”
Auto imports for 2019 are projected to increase by approximately 30.8 percent from 2018, and rise again (though not as much) in 2020.
2019 grain exports are estimated to drop 30.9 percent compared with 2018, “directly attributable to China’s retaliatory tariffs on U.S. grains. The NWSA’s forecast calls for no change in 2020.”
Another export has seen dramatic change, as the report noted: “Log exports through the Port of Tacoma have ceased due to high tariffs. 2019 volumes are expected to be 15.2 million board feet, down 34.4 percent from 2018, with the NWSA forecasting no log exports in 2020.”
Original Source: https://www.thenewstribune.com/news/business/article239324023.html
Written by: Debbie Cockrell, Tacoma News Tribune
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