Economic Forecast

by Ben Spradling | Feb 25, 2020 11:42:00 AM

Despite reports from local meteorologists and the soggy
scene outside, the Puget Sound has been a mostly sunny place through the first
month of 2020. That’s the impression a scroll through recent business headlines
offers, anyway.

Last week welcomed positive news for some of the biggest corporate players in Western Washington. Microsoft submitted quarterly earnings that crushed Wall Street projections just as Amazon crossed the $1 trillion valuation threshold for the first time in its history. Meanwhile, Alaska Airlines announced it is poised bring an additional 2,800 employees aboard amid a surge in profits. Even Boeing, despite its recent issues, revealed it had added more than 2,000 jobs (thanks to a hefty tax benefit).

This bright start is a continuation of what most of the
local business community felt last year. Washington state’s economic growth and
competitiveness ranking rose to fourth
highest in the nation
in 2019 after adding nearly 53,000 jobs, including
roughly 42,000 in the Seattle area. Those additions contributed to a 4.4%
unemployment rate at the close of last year – an all-time low for the state.

From that employment-focused standpoint, this year’s
economic outlook has called for more of the same. The Puget Sound’s most
influential industries – technology, online retail, construction and aerospace
– were each expected to see job availability grow in 2020, some by as much as 4%.
While it’s likely too early to accurately determine if those projections are
being realized, it’s hard to deny the recent spate of positive reports.

Will this demand for new jobs translate into further
economic expansion by the end of the year? Well, here the forecast shows a few
more clouds. The Washington State Economic and Revenue Forecast Council estimated
a 34.8% chance
of the state experiencing a recession this year. Those odds
are similar
to predictions
seen prior to the economic downturn in 2007.

Factors that could potentially introduce a recession include
the decreasing number of exports out of Washington state, elevated consumer price
rates and a dip in housing construction toward the tail end of last year.
There’s also the trade war with China and the impact of the coronavirus
outbreak that could create additional economic complications.

But things may
not end up as gloomy
as all that seems. The Boeing 737 Max is expected to
resume production later this year, which will add a needed boost to exports.
Amazon is expected to build
a massive campus in Bellevue
that will ultimately staff more than 15,000
new employees. Plus, the tech industry continues to flourish.

With nearly 11 months left to go, whether Western Washington
experiences the highs or lows some have forecasted remains to be seen. But for
right now, as current headlines can attest, current economic conditions appear
sunny.

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