EVERETT – Employees of the Boeing Co. are celebrating, but there’s reason for everyone who lives and works in Snohomish County to appreciate the 787’s debut.
Because there’s still no doubt that when Boeing’s flying high, the rest of the region’s economy goes along for the ride.
“It’s pretty obvious that Boeing has a big impact and is having a big impact right now,” said Dick Conway, a Seattle economist. “The major impact of Boeing really stems from its employee wages and how they spend that money.”
It’s no coincidence that when Boeing has hit turbulence, job creation in Snohomish County also has stalled.
For example, the last time Boeing’s production and employment peaked, in 1998, the county saw annual job growth of 5.8 percent, Conway said. The company’s downturn, which started that year, ushered in a local four-year recession.
Jobs shrank dramatically in 2000 through 2004, when Boeing laid off thousands locally. In 2004, the county’s job growth rate stood at less than 1 percent. In the years since, however, it’s been right around or above 5 percent a year, double the state average.
For every job Boeing creates in Snohomish County, there’s roughly one other job created as a result because of Boeing’s high pay, Conway said.
Where would the red-hot local economy be if Boeing decided to assemble the Dreamliner elsewhere? Those who witnessed the 2003 bidding race for Boeing’s business know that was a possibility.
“That question was certainly legitimate a few years ago,” Conway said. “Boeing looked around the country at places to put together this plane.”
Had Everett not been selected, the long-term effect could have been dramatic, he added.
“What did seem clear to me was that if they went elsewhere, it would have been the beginning of the end for Boeing in our state,” Conway said.
Which was a big motivation behind the state’s offer of more than $3 billion in tax breaks if Boeing assembled the 787 here. Since then, local leaders have also stepped up efforts to lure other aerospace activity.
Two years ago, Snohomish County Executive Aaron Reardon went to the Paris Air Show with the intent of promoting the county as an aerospace hub.
“It was very introductory,” Reardon said.
But the market success of the 787 has changed that. Last month, Reardon, along with a Washington state delegation, returned to the Paris event. This time around, Reardon said, “businesses know where Snohomish County is.”
Local and state officials had passed tax incentives and regulatory changes that made Washington state – Snohomish County in particular – friendlier to businesses. And with its proximity to Boeing, the county provides aerospace companies the opportunity to save on shipping, Reardon said.
Without Boeing and its 787, aerospace companies might view Snohomish County as resembling a shopping mall without a major department store, said Deborah Knutson, director of the Snohomish County Economic Development Council. Knutson also attended the air show.
“Our main tenant is obviously Boeing,” Knutson said.
However, Knutson pointed out, even without the 787, Snohomish County would have seen an upswing in its economy because of increased sales of Boeing’s other Everett-built planes – the 747, 767 and 777. But the county definitely has benefited from the 787 through direct engineering jobs and related work with suppliers, she said.
Boeing’s decision to bring the 787s to Everett for final assembly brought with it tremendous residential growth as well as growth in the service industry, Reardon said. He also noted the increased occupancy rates in county office space, particularly offices in Mukilteo near Boeing.
Some expected a rush of Boeing suppliers would fill factory and warehouse space around Everett. That hasn’t happened, though a number of suppliers have set up some limited operations here.
But with Boeing hiring and having secured the long-term prospects of its Everett plant with the 787, real estate investors have seen Snohomish County as a much more attractive place to buy. In the past three years, the building of apartment complexes and deals for shopping centers and other commercial buildings have sped up noticeably, said Gary Bullington of Cushman &Wakefield.
“The 787’s a psychological boost to the market, in addition to being one that’s actually borne out in the statistics,” he said.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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