Snohomish County economic outlook bright — for at least some

LYNNWOOD — Businesses in Snohomish County face an uncertain future.

Technology and trade are two big drivers of economic growth here. But while some companies and workers stand to benefit, others could be caught in the churn.

That was the mixed message from business leaders and an economist Thursday at Economic Alliance Snohomish County’s annual market outlook.

Plenty of businesses here have bright futures, but fundamental shifts in the American economy likely mean some local workers could see their wages drop or lose their jobs. The region faces constraints, such as the dwindling supply of land close to Seattle that can be easily developed.

“There’s a tough stretch coming up” as the region likely grapples with increasing income inequality, backed up highways and other headaches, said Hart Hodges, an economics professor at Western Washington University and keynote speaker at Thursday’s event in Lynnwood.

Many workers earning low or medium wages were hit hard during the recession that began in 2008. Highly specialized white-collar workers, such as programmers and doctors, did well. Many high-end earners even saw their wages rise during the economic downturn and subsequent sluggish recovery.

“Growth is great for people who can take advantage of their technical skills,” Hodges said.

Other workers could be more vulnerable to the changing economy, though.

What happens with the United States’ trade policy could have big implications for Washington’s economy, he said.

President Donald Trump has criticized the country’s embrace of free trade and globalization, and promised to negotiate better bilateral trade agreements. Since taking office last month, he pulled the U.S. out of a sweeping free trade proposal that included 11 other Pacific countries.

The Boeing Co. plans to make fewer twin-aisle aircraft in the next few years, while significantly boosting output of its popular single-aisle 737, which is assembled in Renton. Most of its twin-aisle aircraft are assembled in Everett, which shares 787 production with Boeing’s plant in North Charleston, South Carolina.

Even as it turns out more airplanes, Boeing’s workforce is expected to decrease as robots and automated production equipment play bigger roles in its factories. In the past year, the number of Boeing workers in Washington has dropped by nearly 7,000.

While the number of aerospace manufacturing workers has declined slightly in recent years, the number of people working in professional and business services has picked up. The increase appears to be driven in part by companies focusing on their bread-and-butter activities and hiring accountants, landscapers and other contractors to do secondary work, said Anneliese Vance-Sherman, a labor economist with the state who attended — but did not speak at — Thursday’s event.

Jobs in those service sectors typically have good wages, but “that’s also where a lot of vulnerability lies” during an economic downturn, she said.

There is no sign of a recession on the horizon. Still, given uncertainty with U.S. trade policy and regional market constraints, many companies are in a holding pattern, said Derek Heed, a real estate broker with Colliers International.

The region’s amount of vacant land zoned for industrial use is the lowest it has been in more than 20 years, he said. That has some companies wondering: “Where are they going to locate? Where are they going to grow?”

Heed joined Inaki Elia of MTorres, Rich Fabian with FUJIFILM SonoSite and Kurt Lippman with Moss Adams in a panel discussion emceed by KING5’s Glenn Farley.

The value of being close to Boeing makes up for the area’s high costs of doing business, Elia said.

Finding enough engineers here can be tough for FUJIFILM SonoSite, which often has to recruit nationally, Fabian said.

Plenty of companies want federal tax reform and Republicans — who control Congress and the White House — generally are in favor. But industries so far disagree on what changes should be made. It may be some time yet before a compromise is worked out, Lippman said.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com. Twitter: @dcatchpole.