Top 10 Highlights from the 2024 Horizons Economic Forecast

​The Chamber’s annual Horizons Economic Forecast event took place on Wednesday, January 31, 2024, and saw over 400 guests in attendance! The program featured expert economists, industry executives, and local business leaders to candidly discuss the economic outlook of 2024, as well as offer insights and advice to business owners.

Some of the top topics on everyone’s mind this year were workforce, interest rates, and community investments. The event speakers covered these topics and more through presentations and live discussions.
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Take a look at the top 10 takeaways from this year’s Horizons Economic Forecast:

1. Pierce County: A Hub of Investment & Growth

The program commenced with an address from Bruce Dammeier, Pierce County Executive, during which he underscored Pierce County's reputation as an attractive destination for both investment and employment opportunities. Highlighting two notable investments within the county, encompassing over seven million square feet of leased property, he emphasized the success of these ventures, with one property achieving full occupancy and the other surpassing the 70 percent mark. This emphasizes Pierce County's enduring appeal as a robust investment hub and vibrant community that continues to attract new residents.

2. Port of Tacoma's Impact on Jobs,
​Trade & Prosperity

Kristin Ang, Commissioner at the Port of Tacoma, emphasized the Port's dedication to driving employment, trade, and economic development while championing workforce diversity. Their operations support approximately 42,000 jobs and contribute $2.8 billion to labor income, representing countless livelihoods and aspirations. She reinforced their dedication to promoting inclusivity and diversity in maritime careers, offering lucrative opportunities in high-demand skill trades.
 
A notable point Commissioner Ang shared was the consolidation of the Honda Kia import business and partnership with General Motors, which led to record auto cargo volumes, making the Port of Tacoma the fifth-largest auto importer in the U.S. This expansion created more job opportunities for longshore workers, truck drivers, and manufacturing personnel, contributing to regional economic growth.

3. Legislative Initiatives Aimed at Tackling Economic Challenges

Congresswoman Marilyn Strickland of Washington's 10th District began her address by acknowledging the significant developments witnessed by the South Sound and Washington State at large over the past year. She further acknowledged widespread concerns voiced regarding labor shortages, supply chain disruptions, infrastructure needs, and the evolving marketplace dynamics necessitating continuous adaptation. In response to these challenges, she highlighted key federal legislative initiatives aimed at addressing these pressing issues:

• The Bipartisan Infrastructure Act, poised to generate high-paying jobs that will invest in mass-broadband, mass-transit, roads, and clean water.
• The CHIPS and Science Act, designed to repatriate manufacturing jobs to the United States while bolstering technological advancements to maintain global competitiveness.
• The Inflation Reduction Act, intended to alleviate financial burdens through provisions such as tax credits, support for clean energy endeavors, and measures aimed at reducing the cost of essential medications like insulin.

 
While acknowledging the positive strides made through these legislative efforts, Congresswoman Strickland emphasized the ongoing commitment to further legislative action, promote continuous progress, and advocacy to address emerging challenges.

4. 2024 Interest Rate Cuts

We were honored to have Mona Mahajan, Senior Investment Strategist from Edward Jones, as the keynote speaker. Mona addressed a topic that has been prominent in everyone’s minds – 2024 interest rates. It’s no surprise people are wondering if the Fed will start cutting rates this year, as well as when and by how much. According to the Fed’s new set of economic projections, up to three cuts in 2024 are projected. Also, markets pricing in about six rate cuts this year, although probability of a March rate cut has come down.

5. Inflation Trending Downward

In addition to anticipated rate cuts, it was noted that the Fed’s set of economic projections also indicated lower inflation. Inflation has been moving lower and may continue in the year ahead, with headline inflation coming down from 9.1 percent in June 2022, to 3.1 percent in December 2023. Shelter and rent should continue to put downward pressure on core inflation in the year ahead, bringing it close to 2.5 percent. Overall, leading indicators of inflation point to generally better trends ahead.

6. Collaboration & Progress in the South Sound

Congressman Derek Kilmer of Washington’s 6th District delivered a memorable address focusing on the power of community collaboration and shared progress in the South Sound region.
 
He highlighted a few significant achievements, including the $54 million investment in the Husky Terminal at the Port of Tacoma, enhancing the region's global economic standing. He also emphasized the tangible impact of federal investments in areas such as affordable housing through the Tacoma Housing Authority and expanded services at the Tacoma Rescue Mission, addressing crucial needs ranging from addiction recovery to workforce development. Furthermore, Kilmer celebrated the secured funding for the preservation and enhancement of Puget Sound, a vital environmental and economic resource for the region.
 
Concluding his address, he urged continued innovation, partnership, and a steadfast commitment to preserving the spirit of collaboration, as he believes that through collective action, there are boundless opportunities for progress and prosperity.

7. Pierce County Economic Index (PCEI) Forecast to Rise in 2024

A focal point of the annual Horizons Economic Forecast entails a review of the Pierce County Economic Index (PCEI) Report, authored and presented by Dr. Neal Johnson of Sound Resource Economics. This report serves as a vital tool for assessing the overall health and performance of Pierce County's economy. By analyzing various factors such as employment trends, income levels, taxable sales, housing dynamics, and real estate markets, a comprehensive understanding of the local economic landscape is attained.
 
The PCEI is principally influenced by fluctuations in the county's total real personal income and real personal income per capita. The PCEI experienced an upsurge in 2020 and 2021 due to COVID-related economic stimulus initiatives. However, with the absence of such stimulus in 2022, the PCEI witnessed a decline of 5.3 percent. Despite this setback, the PCEI rebounded modestly in 2023, posting a 1.8 percent increase, and is projected to continue its upward trajectory with an anticipated 1.9 percent rise in 2024.

8. Housing Activity to Decline in 2024

Dr. Johnson also delved into the analysis of housing activity outlined in the PCEI Report. Throughout 2023, housing activity notably underperformed initial projections, with new listings and closed sales experiencing declines of 30 percent and 27 percent, respectively. Moreover, the Pierce County Housing Affordability Index witnessed a substantial 28.7 percent decrease by the conclusion of 2023. Looking ahead to 2024, the housing market is expected to maintain its subdued trajectory, contingent upon potential reductions in mortgage rates. Projections indicate that the Pierce County Housing Activity Index is poised to decline by 9.5 percent by the culmination of 2024.

9. How Businesses Are Navigating the Post-COVID Landscape

The conclusion of the Horizons Economic Forecast program featured a panel of local Pierce County leaders engaging in discussions pertinent to their respective businesses. Among the topics deliberated was the transition businesses underwent post-COVID. Brenda Miller of Velvets Big Easy provided insights into the strategic evolution of her business towards a broader scope and enhanced community integration. Deliberating meticulously on the alignment of her company with community needs, Miller emphasized the creation of employment opportunities and the provision of exceptional culinary experiences. Originating as a food truck and catering enterprise during the pandemic, Velvets Big Easy has since expanded its operations into a brick-and-mortar establishment, indicating their commitment to sustainable growth and community engagement.
 
Teresa Delicino from Workforce Central also addressed the post-COVID landscape, acknowledging the challenges faced during the pandemic while expressing optimism about the current stabilization. Delicino highlighted Workforce Central's ongoing commitment to bridging educational resources with business needs, aiming to facilitate seamless access to essential resources for local enterprises.

10. JBLM Addresses Recruitment Challenges

JBLM serves as a significant economic driver within the South Sound region and Washington State at large. As part of the local panel, Lt. Col. Dane Franta of the 62nd Airlift Wing at JBLM provided invaluable insights into the military community's resilience amidst global uncertainties and ongoing challenges in labor and recruitment. A key emphasis by Lt. Col. Franta was the revitalization of community outreach initiatives, recognizing the importance of re-establishing connections lost during COVID. JBLM is actively engaged in attending hiring fairs, organizing air shows, and participating in Armed Forces Days to reinforce their commitment to engagement and recruitment efforts.
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Remarkably, statistics for 2023 indicate that JBLM currently hosts the smallest military personnel presence in its history. Consequently, recruitment efforts have been intensified to meet operational requirements. As part of their recruitment messaging, JBLM fosters a sense of camaraderie and shared purpose, emphasizing the unique benefits of a military career path.