Fueled by soaring 747, 767, 777 and 787 aircraft sales for the Boeing Co.’s Everett plant, Snohomish County’s economic engine is roaring, producing sustained growth that is expected to power the state and regional economy as well for several years to come.
In fact, everything’s going so well that it’s almost “as good as it gets.”
That’s the view of seasoned economist Mike Parks, publisher of the respected Marple’s Pacific Northwest newsletter for Washington, Oregon, Idaho, Montana and Alaska. For the 11th consecutive year, Parks appeared last month at Frontier Bank’s annual gathering at the Everett Golf &Country Club to deliver his usual detailed and insightful analysis of what’s going on with the Northwest climate.
Noting that economists are “often wrong but never in doubt,” Parks tempered his preview of 2007 with comments about how easy it is for predictions to go wrong, even looking only12 months down the road. Still, upward trends in the economy appear so strong that the outlook for this year appears to be fairly certain, he said, barring major negative events.
“There have been surprises in the economy … who knew that high-priced oil was good for you? But that’s what has fueled orders for Boeing’s new 787 well into 2012 … and U.S. airlines have yet to be heard from,” he said.
Growth lines on the economic charts will pause in their climb in 2007, he predicted, and begin leveling out, but the economy is still expected to be strong.
“Things look so good in our region that I spent some time worrying about being flattened by some things we can’t see right now,” Parks said. “For instance, will Microsoft’s new Vista program be full of bugs; will declining oil prices take the wind out of 787 sales; or will Boeing be able to deliver the new plane on time and on budget? We don’t know.”
Education and transportation issues raise concerns, too.
“Will high school graduation rates continue to increase? We’re up from 70 to 75 percent in the number of graduating seniors but that still ranks us 31st among the 50 states. Also, we know our transportation network is stretched almost to the breaking point. We have to take better care of what we’ve built as well as expanding it,” he said.
Part of the good news, of course, is that the state’s unemployment rate is expected to drop from 3 percent in 2006 to 2.3 percent in 2007, essentially reflecting full employment, Parks said. Tied to that full employment expectation is an anticipated increase in state revenues to as much as $27 billion for the biennium rather than the predicted $24 billion.
Concluding his remarks, Parks cautioned again about oversimplifying the Northwest’s complex economy in the process of trying to understand it and predict it, quoting Nobel laureate Enrico Fermi, who said in 1938, “Before I came here I was confused about this subject. I am still confused but on a higher level.”