For the 23rd time, a pair of economics professors from the University of Puget Sound stood with tales to tell and prophecies to share before an annual gathering of Tacoma-area business leaders.
Professors Douglas Goodman and Bruce Mann have chronicled downturns over the past two decades, but none so nasty as the one they call the Great Recession, the one that lasted seven quarters from the end of 2008 through the summer of 2010.
There have been booms and bungles over 23 years, and there have been bad surprises and endemic changes in the way money flows, grows and flies away in the Puget Sound region.
Goodman and Mann have tried to make sense of it all with their annual look at the Pierce County Economic Index.
Never miss a local story.
Organized by the Tacoma Pierce County Chamber, the annual Horizons Breakfast event Thursday drew 420 guests to the Greater Tacoma Convention & Trade Center.
The news this year brings hope if not certainty concerning jobs, wages, spending, trade and the overall outlook for Pierce County in 2011.
The Great Recession has been “the largest and deepest since we’ve been keeping tabs,” Goodman said.
He predicted “a slow and uncertain recovery.”
“If not (with) glee and joy,” Mann said, at least people can be optimistic. “We did hear the dog bark, and it is barking recovery.”
“We could be on the low side of the return. We’re always cautious,” he said. “The recovery could lead to expansion. The recovery is here.”
Said Goodman, “It’s nice to have some positive news.”
From the report, overall:
Over the recession, the Pierce County Economic Index dropped 5.35 percent, the steepest and deepest decline since the PCEI was inaugurated.
As the year ends, the PCEI will increase by 2.9 percent, “the strongest annualized quarterly growth since late in 2006.”
During 2011, the PCEI will increase by 3.25 percent, “a solid beginning to the recovery.”
The index will fall by 1.35 percent in 2010, bettering a 3.9 percent decline in 2009.
The number of nonagricultural jobs in Pierce County will begin to increase during the fourth quarter of this year.
In 2011, employment opportunities will increase by 1.5 percent, adding about 4,000 jobs over 2010. However, employment in the county will remain shy of the 2007 pre-recession peak by 12,000 jobs.
For the whole of 2011, the county’s unemployment rate will average 8.9 percent, a shade below 2010 levels.
On retail sales:
Retail sales were up for the first quarter of 2010. Holiday sales this year will move up 2 percent over holiday spending in 2009. This increase will add some $30 million to local cash registers.
Retail spending in 2011 will continue to grow, but the increases will be modest – with the dollar volume up by almost 1.1 percent, giving local merchants an additional $55 million over 2010.
On personal income:
When 2010 numbers are finally tallied, total household income will be up by 2.25 percent, adding $683 million to household budgets in the county.
Total personal income growth will add nearly $1.3 billion to household accounts in the county.
Per-capital income growth will increase by 2.5 percent during 2011, but the $415 gain in 2010 plus the $973 added in 2011 will not completely offset the loss suffered during the recession.
Per-capita income in the county in 2011 will be $39,507, which will equal the purchasing power of an income in 2006.
On real estate:
The PCEI housing index in 2011 will equal the level of 2000.
The apartment market will continue to improve thanks to the return of 18,000 troops deployed overseas from Joint Base Lewis-McChord.
The outlook for commercial and industrial real estate is “cautiously optimistic,” while retail real estate “will continue to struggle” through 2011. Office space will “face the most serious challenge” in 2011.
After falling 17 percent in 2009, container traffic at the Port of Tacoma declined an additional 7.1 percent in 2010.
Counting for 34 percent of port volume, domestic trade – primarily to Alaska and Hawaii – will be up 2.8 percent in 2010.
“One bright spot” has the port renewing its log business because of demand from China. Logs will jump 26.3 percent next year compared with a partial-year in 2010.
Transshipment of automobiles will increase 8.1 percent.
After three consecutive years of declines, container volume will increase by 4.4 percent in 2011.