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Chris Mefford President & CEO

The Puget Sound Regional Economy 2017Seattle Rotary 4January 4, 2017

About Community Attributes

1/3/2017 Puget Sound Economy and Outlook 2

Regional Economics

Land Use Economics

Community & Economic Development

Data Dashboards & Business Intelligence

Information Design

Surveys & Market Research

Three Fundamentals of Our Economy

1. We are a statewide economy2. Our quality of life is our greatest economic asset3. Trade, important capital, or decline

1/3/2017 3Puget Sound Economy and Outlook

Fundamental #1

We are a Washington State economy


1,385,100King

283,700Snohomish

308,700Pierce

112,500Thurston

245,800Spokane

90,300Kitsap

138,500Whatcom + Skagit

44,800Wenatchee

50,000 farm jobs

Jan 4, 20173.4 million jobs7.3 million residents

41%WA Jobs

58%WA Jobs

68%WA Jobs76%WA Jobs

84%WA Jobs

110,400Kennewick

83,900Yakima

Source: CAI, ESD, PSRC


1,385,100King

283,700Snohomish

308,700Pierce

112,500Thurston

245,800Spokane

90,300Kitsap

138,500Whatcom + Skagit

44,800Wenatchee

50,000 farm jobs

Jan 4, 20173.4 million jobs7.3 million residents

110,400Kennewick

83,900Yakima

Source: CAI, ESD, PSRC

136,100

7

Jobs Forecast, 2015-2018

Real Annual GDP GrowthSeattle Metropolitan Area and U.S.


Sources: U.S. Bureau of Economic Analysis, 2016; Community Attributes Inc., 2016.

Real GDP Growth, 2010-2015Seattle Metropolitan Area



Annual EmploymentHistoric and forecast, Central Puget Sound Region


2016 employment growth of 3.5%. Employment in 2017 projected to grow 2.2%.

Sources: Washington State Employment Security Department, 2016; Community Attributes Inc., 2016.

Seattle EmploymentQuarterly employment, year-over-year change, Seattle MSA



1.7 million jobs in the region in Q3.Nearly 4% year-over-year increase in Q3.

Unemployment RateSeattle Metro Area and Washington State


Sources: Washington State Employment Security Department, 2016; Community Attributes Inc., 2016.Metro area represented by the Seattle-Bellevue-Everett Metropolitan District. Not seasonally adjusted.

Productivity GainsReal GDP per worker, Seattle-Tacoma-Bellevue, WA



2015 $

2001-2014 CAGR: 1.4%

2001-2014 CAGR: 1.0%

2001-2014 CAGR: 0.7%

Fundamental #2

Our quality of life is our greatest economic asset

• Branding, marketing, promotion

• Trade shows• Site selection support

Help Grow, Recruit

Businesses

• Workforce supports

• Higher education• Permitting,

business support

• Tax policies• Entrepreneurial

supportRetain & Sustain

Businesses, Entrepreneurs

• Basic needs• Housing• Transportation• Schools & early

childhood• Public safety

• Parks & trails• Cultural assets• Vibrant

neighborhoodsProvide Livable Communities

How do we do better?

Annual Change in Jobs & People

Office of Financial Management, Washington State Employment Security Department

16

Change in Jobs Net Migration

Puget Sound Regional Growth

Growth by CityPopulation Change, 2010-2015

Office of Financial Management

2010-2015 Growth Less Annexations

King County Population Growth

Office of Financial Management, Puget Sound Regional Council

Jobs to Housing Units Ratios

King County Jobs: Housing Units

20

Household Forecast, 2015-2018

Population ChangeKing County and the U.S., 2000-2016


Sources: Washington State Office of Financial Management, 2016; U.S. Census Bureau, 2016; Community Attributes Inc., 2016.

Real Median Household IncomeIndexed to 1989


Sources: Washington State Office of Financial Management, 2016; U.S. Census Bureau, 2016; Community Attributes Inc., 2016.

Income GainsPercentage change in real wages (2015 $), 2009-2015, Seattle-Tacoma-Bellevue, WA



Middle Wage Jobs by Occupation GroupJobs that pay between $38,000 and $77,000 in King County


• At an average of 1.3 earners per households, jobs that support middle household incomes range in pay from $38,000 to $77,000 per year.

• Jobs in this wage range increased by 10,000 in Seattle from 2005 to 2013 (0.3% CAGR).

• All other jobs increased by 135,000 (1.5% CAGR).

Total Middle Wage Jobs

127,600

68,700

57,300

57,000

51,900

40,900

40,000

38,100

28,400

27,900

Sources: Washington State Employment Security Department, 2016; Bureau of Labor Statistics, 2016; Community Attributes Inc., 2016.

Middle Wage Openings by SectorJobs that pay between $38,00 and $77,000 in King County, 2015

• The Services sector had 6,000 middle wage job openings in 2015, the most of any sector.

• Information had the highest growth rate of middle wage jobs from 2014 to 2015. In 2015, 4.9% of the sector’s middle wage jobs were from new openings.


Fundamental #3

Trade, Import Capital, or Decline

Circular Flows of the Economy

29

Washington State Goods Exports, 2002-2015


Sources: U.S. Census Bureau, 2016; Community Attributes Inc., 2016.

AerospaceAll other exports

Export Markets for WashingtonTop merchandise and commodity markets, 2015


Sources: U.S. Census Bureau, 2016; Community Attributes Inc., 2016.

Workers in Foreign Invested FirmsSeattle Region, 2007-2014 (estimated)


Sources: U.S. Bureau of Economic Analysis, 2016; U.S. Bureau of Labor Statistics, 2016; Community Attributes Inc., 2016; Brookings Institute, 2016; Rhodium Group, 2016.

• Washington ranks 35th in FDI jobs/total workforce (2014).

• Seattle ranked 25th

in cumulative greenfield FDI, 2009-2015.

• Washington ranked 25th in Chinese FDI from 2000-2015, and 29th on per capita basis.

U.S. Bureau of Labor Statistics, WA State ESD

33

Strengths & Growth Central Puget Sound Region

34

Aerospace


Direct Jobs in Washington

• Aerospace employment has remained stable in recent years.• Related industries added 3,700 jobs year-over-year in 2015.

1/3/2017 35

Sources: Washington State

Employment Security

Department, 2016; Washington

Aerospace Partnership, 2013

and 2015; Community Attributes

Inc., 2016.

Puget Sound Economy and Outlook

Aerospace & Related Jobs by County, 2015

36

Sources: Washington

State Employment

Security Department,

2016; Washington

Aerospace

Partnership, 2013 and

2015; Community

Attributes Inc., 2016.

1/3/2017 Puget Sound Economy and Outlook

Aerospace Business Revenues (2015 $)

1/3/2017 37

Sources: Washington Department of Revenue, 2016; Federal Reserve Bank of St. Louis, 2016; Community Attributes Inc., 2016.

Puget Sound Economy and Outlook

Boeing Aircraft Forecast


Source: The Boeing Company, 2016.

Boeing currently has a backlog of 5,635 orders.

Boeing• Historic backlog; productivity

• Significant dependence on China

• Major price competition underway

• Local jobs part of nationwide capacity puzzle

• Hiring needs still great; fill open positions

Other Aerospace• Space! Emerging industry?

• Continued growth in smaller companies

• Supply chain diversification

40

What to Watch 2017: Aerospace

41

Information


Information & Communication Technology


Sources: U.S. Bureau of Labor Statistics, 2016; Community Attributes Inc., 2016.

43

IT IndustriesCircle size indicates relative size (jobs) of Industry and Tech Units

44

Occupational Concentration (Location Quotient) Washington State and Seattle MSA, 2014

• TALENT, TALENT, TALENT• Continued growth in Cloud

Services• Amazon and Microsoft• Virtual Reality and Augmented

Reality• More tech in other industries• More company headquarters• Start-ups• IPOs• Funding …

45

What to Watch 2017: Technology

46

• Key local industries

– Ship Building

– Food Production

– Craft Manufacturing

– Construction Related

• China

• Makers spaces

• Small businesses

What to Watch 2017: Manufacturing

47

Other Exports

Maritime Jobs, 2012-2015


• Maritime Sector employment increased by 5,200 jobs from 2012 to 2015, largely driven by growth in the commercial fishing and seafood products subsector and boat and ship building, repair, and maintenance.

• This represents a compound annual growth rate of 2.7%.

Sources: U.S. Census Bureau, 2016; Washington State Employment Security Department, 2016; Community Attributes Inc., 2016.

Defense Spending in Washington


• Defense industry contracts supported 56,300 jobs in Washington in 2014.

• Additional 100,000 civilian and military defense personnel in state.

Sources: Washington Military Alliance, 2015; Community Attributes Inc., 2015.

Summaries

Headwinds

• Uncertainty with federal policies• Weak global growth

• Slowdown in China• Defense spending cuts• Political and social instability


Tailwinds

• Strong foundation in jobs, incomes• Global presence established and growing • Continued talent migrating to Greater Seattle • Continued growth in tech industry overall• Real estate investment in region• Boeing aircraft orders and backlog


Synopsis and Takeaways on Future Growth

• Employment is very high, incomes are high• Strong, tradable industries will support continued growth• Major concerns are global in nature—declines in trade and

economic softening in major export markets could weaken growth in the region.

• Seattle home to major hubs in ICT, aerospace, and more—strong prospects for growth, assuming trade is not disrupted.

• Growth has not been even in the region. Housing increasingly unaffordable for many.

• Downward trend in globalization.


Thank You

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