Business leaders attending the 2018 Horizons Economic Forecast breakfast on Jan. 24, presented by the Tacoma-Pierce County Chamber of Commerce, received a healthy helping of positivity as they look ahead to the future of the region.
Neal Johnson, principal of Sound Resource Economics, presented the Pierce County Economic Index and according to him, all economic indicators for Tacoma-Pierce County are pointing upward. Three measures of progress are positive gains in employment, retail sales and housing.
Between 2014 and 2017, upward of 10,000 new jobs were added to Pierce County. Projected for 2018 is another 9,500 jobs countywide, bringing the total number of jobs by the end of this year to 330,000. In 2017, employment gains were greatest in construction, education and health services, professional and business services, and government.
According to the Index, retail sales were up 6 percent through the end of June 30, 2017, totaling $15.3 billion. Through the end of 2018, the retail trade sector is forecast to increase an annualized rate of 4.5 percent, based on forecasted personal income growth.
Johnson said housing starts will continue to increase, which will attract new residents to the county and thus increase the employee pool for open available jobs.
Johnson predicted there is enough economic growth – albeit slow, measured growth – to keep things chugging along at least through 2020 without fear of another recession.
Bruce McCain, a chief investment strategist for Key Private Bank, presented the national economic outlook. He also said the country as a whole is experiencing slow growth.
“If we were in a baseball game, we could be in the seventh or eighth inning and we could see extra innings,” McCain said. “Because of the characteristics of this cycle, we might see a continued sluggish recovery. Wage rates have normally accelerated when unemployment is low, but lately it’s been sluggish.”
McCain said an ailment afflicting the country now is a shortage of labor.
“Labor is no longer growing as fast as it once did,” McCain said. “Those born in 1956 will turn 65 in 2020. We’re halfway through the normal employment cycle of that baby-boomer generation. We will have a great loss of experience. This clearly has a demographic effect.”
McCain said businesses are now reluctant to invest for fear that investment will not help with productivity enhancements. He also added that capital spending in structures has lagged. Most spending has been invested in equipment to help reduce the need for skilled labor.