Regional Economic Outlook - SEATTLE ECONOMICS COUNCIL › uploads › 1 › 0 › 8 › 1 ›...

Spencer Cohen, PhDSenior EconomistApril 4, 2018

Regional Economic Outlook

About Community Attributes Inc.

April 4, 2018 Seattle Economics Council 2

RegionalEconomics

Land UseEconomics

Community &Economic

Development

Data Dashboards &Business Intelligence

InformationDesign

Surveys &Market

Research

Outline• Current economic conditions

• Jobs: aerospace and non-aerospace trends• Population trends• Income, wealth, occupations

• Global and national economic trends and outlook• Regional jobs and population short-term forecast


Forecasts are Never RightJust Less or More Wrong“The only function of economicforecasting is to make astrologylook respectable.”

- John Kenneth Galbraith“Forecasting is very difficult,especially when it involves thefuture.”

- Yogi Berra“Weather forecast for tonight:dark.”

- George CarlinApril 4, 2018 Seattle Economics Council 4

Circular Flow Economy


Regional Current Conditions


7

Major Industries in Washington 4,326,400 Total Jobs

Sources: Bellevue Creative Economy Study, 2017; QCEW, 2017; Washington State Employment Security Department, 2017; QCEW, Bureau of Labor Statistics, 2017;Industry/Occupation Crosswalk, Washington State Employment Security Department, 2017; Bureau of Economic Analysis, 2017

8

Major Industries in Washington Percent of Export Jobs by Industry


9

Creative Economy of King County


120,400 Total Creative Economy Jobs

King County Employment by Establishment Size2017

Seattle Economics Council 10April 4, 2018

Non-farm EmploymentSeattle MSA, annual growth rate


Seattle MSA figures areseasonally adjusted.Sources: Washington StateEmployment SecurityDepartment, 2018;Community Attributes Inc.,2018.

Employment by Industry, 2017Seattle MSA, Jobs in 2017 and 2017 growth rate (%)


Sources: Washington State Employment Security Department, 2018; Community Attributes Inc., 2018.

Excludingaerospace, jobgrowth increased3.3% in 2017.

Aerospace EmploymentSeattle MSA, annual growth rate


Seattle MSA figures areseasonally adjusted.Sources: Washington StateEmployment SecurityDepartment, 2018;Community Attributes Inc.,2018.

Four straight years ofdeclining employment.


Boeing EmploymentWashington and U.S., 2010-2017

*2017 figures are estimates based on dataavailable through September 2017.Sources: The Boeing Company, 2017;Community Attributes Inc., 2018.

Aerospace Revenue/WorkerStatewide, 2017 $


Sources: U.S. Bureau of Labor Statistics, 2018; Washington State Department of Revenue, 2018; St. Louis FRED, 2018;Community Attributes Inc., 2018.

Revenue/worker aproxy forproductivity.Between 2011 and2014, revenue perworker increased54%, but has sinceleveled off.

Unemployment RateU.S., Washington state, Seattle MSA, 2000-2018, 3mma


Rates seasonally adjustedand based on three-monthmoving average (3mma).Sources: Sources:Washington StateEmployment SecurityDepartment, 2018; St. LouisFRED, 2018; CommunityAttributes Inc., 2018.

Wages & Incomes (Seattle-Bellevue-Everett)

10th Percentile (0.1% CAGR)





$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Seattle Economics Council 17Sources: Bureau of Labor Statistics, OES, 2018.

2017 $

April 4, 2018

Personal Income, 2006-2017Per capita, 2017 $, Seattle-Tacoma-Bellevue MSA


*Estimate.Sources: U.S. Bureau ofEconomic Analysis, 2017;U.S. Bureau of LaborStatistics, 2018; St. LouisFRED, 2018; CommunityAttributes Inc., 2018.

Taxable Retail SalesKing County, billions 2017 $


*2017 estimates based on firsttwo quarters and net changeover same period in 2016.

Sources: Washington StateDepartment of Revenue, 2018;St. Louis FRED, 2018;Community Attributes Inc.,2018.

Seattle Economics Council 20

Total Washington Exports by Commodity or Merchandise, 2017

Source: U.S. Census Bureau, 2018.April 4, 2018

21

Washington Aerospace Exports2017

Seattle Economics CouncilApril 4, 2018


Washington Non-Aerospace Exports2017

Source: U.S. Census Bureau, 2018.April 4, 2018

Regional Population GrowthCumulative population growth since 1975


Sources: Washington StateOffice of FinancialManagement, 2017; ConwayPedersen Economics, 2017.

Jobs and PeopleChange in Jobs & Net Migration, Central Puget Sound Region


Source: Office of Financial Management, 2018.

April 4, 2018

25

Migrations to King CountyBy Origin of Newly Issued King County Driver’s Licenses, 2017

CaliforniaOregon

Texas

South(less TX)

Midwest

East Coast

MountainPacific

(No CA or OR)

International

Source: DOL WA 2018

April 4, 2018 Seattle Economics Council

Origin of Newly Issued King County Driver's Licenses

2,108

3,404

2,992

2,313

3,197

2,344

3,379

2,952

3,896

2,990

4,487

3,554

4,711

3,260

4,883

0

1,000

2,000

3,000

4,000

5,000

6,000

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q12017

Q22017

Q32017

Q42017

California

Oregon

Texas

Pacific (No CA or OR)

South (No TX)

Mountain

East Coast

Midwest

International

Source: DOL WA 2018

Seattle Economics Council 26April 4, 2018

Global and U.S. Economic Trendsand Forecast


Global Economic TrendsReal GDP, year-over-year growth (%)

April 4, 2018 Seattle Economics Council 28Sources: IMF World Economic Outlook,October 2017 and January 2018.

Forecast

The IMF recently increased itsprojection for global GDP by 0.1percentage points.

Total Trade VolumeGoods and services, annual % change

April 4, 2018 Seattle Economics Council 29Sources: IMF World Economic Outlook,October 2017 and January 2018.

Forecast

Assumes stability inglobal trade regime,which could beundermined in 2018.

U.S. Economic RecoveryMonths of expansion following recession, NBER definition


*2008-2009 expansion period still ongoing.Sources: National Bureau of Economic Research, 2018; Community Attributes Inc., 2018.

Recession Period Recovery/ Expansion Period

1990-1991 1991-2001

1960-1961 1961-1970

2008-2009 2009-?

1981-1982 1982-1990

1937-1938 1938-1945

2001 2001-2008

1973-1975 1975-1980

1929-1933 1933-1937

1860-1862 1862-1866

1948-1949 1949-1953

Months of Recovery/Expansion

U.S. Real Gross Domestic ProductHistoric and Forecast, 2000-2022


Sources: St. Louis FRED,2018; Blue Chip EconomicIndicators, 2018 (for years2018-2019); InternationalMonetary Fund WorldEconomic Outlook, 2018(for years 2020-2022).

Forecast

Key Stories and Factors to Watch• China’s continued macroeconomic restructuring

and local debt reconciliation.• Tariffs and escalation of trade friction, risk of trade

war.• Geopolitical issues—Korean Peninsula, sustained

recovery in Europe, Russia.• National factors—impact of tax cuts, Feb interest

rate hikes, Trump Administration trade policies.• Regional—sustained growth in Seattle and

Washington state economies, vibrancy of techeconomy, affordability.


Seattle Regional Outlook

33April 4, 2018 Seattle Economics Council

What Could Go Wrong?


What to Watch for


Factor Effect DescriptionExpected reversal in Boeing employment Positive • Voluntary layoffs past five years to end;

Boeing to resume hiring.• Backlog of more than 5,800 aircraft, of

which 1/5 final assembly in SnohomishCounty.

• ~Half all state aerospace jobs in Snohomish.Foreign market opportunities Stable/

UncertainRegion's leading export markets to remainclose to current growth levels for 2018 and2019.But will the U.S. get embroiled in a trade warwith China?

Overall U.S. growth Stable Blue Chip projects 2.7% and 2.4% in real GDP in2018 and 2019.

Sustained statewide growth Positive Washington State ERFC projects 2018 and 2019growth in real GDP of 2.8% and 3.6%.

Seattle MSA growth Positive Growth in Seattle expected to sustain in 2018.

Merchandise and Commodities: Washington ExportsNon Aerospace, 2002-2022

36

Historical Forecast

Sources: U.S. Census Bureau, 2018; International Monetary Fund, 2017 and 2018; Blue Chip Economic Indicators, 2018; Community Attributes Inc., 2018

Leading Regional Export Markets


*GDP growth based on constant prices in national currency.Sources: Blue Chip Economic Indicators, 2018; International Monetary Fund World Economic Outlook, October 2017; U.S. CensusBureau, 2018.

2018 2019 2020-2022

China $9.3 6.8% 6.3% 6.1% 5.9% Blue Chip for 2018 and 2019, IMF for 2020-2022Canada $3.2 3.0% 2.2% 1.9% 1.8% Blue Chip for 2018 and 2019, IMF for 2020-2022United Arab Emirates $3.1 1.3% 3.4% 3.4% 3.1% IMFJapan $2.0 1.5% 1.4% 1.1% 0.7% Blue Chip for 2018 and 2019, IMF for 2020-2022Norway $1.9 1.4% 1.6% 1.6% 1.8% IMFSaudi Arabia $1.7 0.1% 1.1% 1.1% 2.0% IMFRussia $1.5 1.8% 1.9% 1.7% 1.5% Blue Chip for 2018 and 2019, IMF for 2020-2022I reland $1.5 4.1% 3.4% 3.4% 2.8% IMFTaiwan $1.4 2.0% 2.4% 2.3% 2.3% Blue Chip for 2018 and 2019, IMF for 2020-2022United Kingdom $1.1 1.7% 1.4% 1.3% 1.7% Blue Chip for 2018 and 2019, IMF for 2020-2022

All Other Countries/Markets $15.6

Global $42.2

SourcesForeign MarketEstimated King County& Snohomish CountyExports 2017 (bils $)

GDP Growth, 2017Forecast Annual Growth (%)

Boeing BacklogAs of January 2018, ranked by final assembly orders


*Backlog defined as unfilled orders.Some 787 orders will bemanufactured in South Carolina.Source: The Boeing Company, 2018.

Country/Market Total Backlog 737 747 767 777 787United Arab Emirates 485 245 0 0 188 52Qatar 101 0 0 0 71 30Singapore 193 116 0 0 20 57Japan 70 11 0 0 26 33I reland 438 402 0 0 0 36China 304 275 0 0 6 23Russian Federation 58 30 0 0 6 22United Kingdom 107 84 0 0 0 23Taiwan 22 0 0 0 4 18France 26 5 0 0 0 21

All other markets 4,027 3,480 11 97 104 335

Total 5,831 4,648 11 97 425 650

Net Job GainsSeattle MSA, historic and forecast


Sources:Washington StateEmploymentSecurityDepartment, 2018;CommunityAttributes Inc., 2018.

Annual GrowthSeattle MSA, historic and forecast


Sources: WashingtonState EmploymentSecurity Department,2018; CommunityAttributes Inc., 2018.

Forecast

Jobs by Industry (Seattle-Bellevue-Everett)

41Sources: Bureau of Labor Statistics; Washington State Employment Security Department, 2001-2023

42

Jobs by Occupations (Seattle-Bellevue-Everett)

Sources: Washington State Employment Security Department; Bureau of Labor Statistics; 2012-2023

Split into two and enlarge


Population Growth & Housing Unit Change

0

5,000

10,000

15,000

20,000

25,000

00-01 02-03 04-05 06-07 08-09 10-11 12-13 14-15 16-17

Change Over PreviousYear

Sources: Washington State OFM, 2017

Households Housing Units

King County Annual Households & Housing UnitChange, 2000-2017

April 4, 2018

44

Planned Office Projects, Seattle and Bellevue

Sources: CB Richard Ellis, 2018; Community Attributes Inc, 2018

April 4, 2018 Seattle Economics Council

Thank YouSpencer Cohen, PhD

[email protected]


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