“Washington state’s economic recovery will be much slower than we expect, compared to earlier recessions,” predicted Hart Hodges, director of Western Washington University’s Center for Economic and Business Research.
Speaking to the Everett Area Chamber of Commerce’s economic forecast luncheon at the Everett Golf &Country Club in mid-November, Hodges presented charts and graphs showing the differences between the current recession and earlier ones.
“The recovery will be a slow ride out, not a rapid bounce back,” said Hodges. “In 2001, businesses quit spending during the recession but consumers didn’t.”
Their spending helped to speed economic recovery. In the present recession, however, both business and consumers quit spending, he said.
That situation, in turn, has slowed job recovery, he said, leaving hundreds of thousands of people unemployed with few immediate opportunities for work.
He doesn’t expect strong job recovery to happen until 2011, anticipating more job losses through 2010. The October unemployment rate in Snohomish County already has hit 10.2 percent, one percent ahead of the state.
“Because many of the statistics we work with from the state don’t separate Snohomish County numbers from the Seattle metropolitan area statistics, I’m going to focus on the statewide economy, since the county is tied so closely to those numbers,” Hodges said.
“Permanent layoffs are much higher than normal,” he said. “People are not expecting to get their old jobs back as much as in previous recessions.”
Hodges said he sees no major driving force in the economy that will help pull the state out of the recession.
“The adjustment period will be very uncomfortable and will be years long,” he said.
Congressman Rick Larsen, D-Wash., who shared the two-man panel discussion with moderator Bob Bolerjack, editorial editor for The Herald, said he sees China’s emerging recovery from its own part of the global recession as “a bit of good news” since it is a major trading partner with the United States.
Government will try to help in the short term, he said, but long-range the government will be focusing mostly on reducing the natonal budget deficit and trying to rein in government spending.
Larsen said the state made a strong business case for keeping Boeing’s second 787 production line in the state. Even though Washington lost out on the decision, with Boeing choosing the South Carolina site, the state needs to continue to invest in education and related things that will show Boeing and other businesses that Washington is the best state for their investments.
Hodges said one key to the county’s recovery will be how quickly its housing market recovers., calling housing “very, very important.” Construction jobs, he said, are good paying and have a strong ripple effect on the economy.
He gave strong support to the importance of Boeing and other manufacturing companies in Washington state and Snohomish County, noting that 33 percent of all wages paid in the county go to workers in manufacturing roles.
Wages in manufacturing in the county are quite strong, he said, averaging $72,351 annually based on 2007 data from the Washington State Department of Employment Security’s latest figures.
Overall wage figures in the county were $46,182 to 46,559 in 2008, he said.
The largest subsectors of the manufacturing category, Hodges said, are transportation equipment manufacturing, primariluy in aerospace including Boeing suppliers; computer and electronics manufacturers (such as Fluke Corp., Intermec and medical device manufacturers such as SonoSite, Philips Medical Systems and Cardiac Science Corp.), and fabricated metal products manufacturing.
Manufacturing employment by age group includes about 18,000 in the largest group, ages 45-54, followed by 12,000 in the 35-44 group and nearly 9,000 in the 55-64 age group, which includes the large sector of experienced Boeing Co. employees expected to retire within the next 10-15 years.
Smaller age groups include 7,000 ages 25-34, roughly 1,000 ages 22-24 and the smallest group, over 65 years old, numbering about 700.
Other major employment categories outside of manufacturing include construction, retail, finance, professional and technical services, food and accommodations, health and government.
Copies of Hodges’ presentation are available at www.cbe.wwu.edu/cebr or on the Everett chamber’s site, www.everettchamber.com.
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