Dr. Chang Mook Sohn offered a cau-tiously optimistic appraisal of Washington states economic outlook during Monday’s lecture luncheon at the Asia Pacific Cultural Center.
Sohn – who as Executive Director of the Washington Office of the Forecast Council, prepares quarterly economic forecasts for the governor, the state Legislature and state agencies – shared his prognostications during the afternoon event, which was co-sponsored by the Tacoma-Pierce County Chamber and the World Trade Center Tacoma.
Finally, we are seeing the positive numbers in 2004, he said, noting that although the national recession officially ended in November 2001, the real effects of the recovery are only now being felt in terms of jobs. Recent data clearly indicate the economy is recovering.
The countrys third quarter Gross Domestic Product (GDP) – the total value of all goods and services provided in an economy at any given time period and the broadest measure of the economy – was up 8.2 percent, a 20-year high. Productivity was up about 9 percent.
And Washington states economy is similar to that of the national economy, Sohn noted.
The states economy will grow, but extremely slowly over the next several years, he said.
October employment releases brought some news that indicates Washington state is on the road to economic recovery:
– Initial unemployment insurance claims decreased 7.9 percent to the lowest level since March 2001.
– Employment services, including temporary help, increased 5.2 percent.
– Employment growth in construction, financial activities, retail trade and information services was above that of the national average.
Still, Sohn said he expects to see a slight increase in the states unemployment rate before it drops.
Washington states employment during the current recovery – from November 2001 to August 2003 – saw a net loss of just over 12,000 jobs, compared to the over 64,000 jobs lost during the recession, from December 2000 to November 2001.
Most of those jobs lost – 41,000 and 56,000, respectively – were lost in the Seattle metropolitan area, which Sohn described as the engine that drives the states economy.
On the positive side, Sohn stated that Pierce County has been able to add jobs, although he noted challenges remain, especially in light of the fact that only one of the Armys two deployed Fort Lewis-based Stryker brigades is set to return.
That will have a huge impact on housing and rental activities in Pierce County, he said.
The biggest concern to Sohn, however, is manufacturing. Manufacturing is the economic base, he said, saying it defines the economys ability to bring money in, and in that respect Washington state is hurting.
Noting that Boeing is about half the size it was five years ago and that this is the fifth straight year there has been an in-state decline in aerospace employment, Sohn said Washington has lost 100,000 jobs in manufacturing employment – from 360,000 to 260,000 – in the last five years.
Manufacturing jobs are not going to come back, he said. That will limit economic expansion over the next several years. Still, he saw a positive side to the decline in aerospace employment. Because of that, the states economy is diversifying, Sohn pointed out.
Despite concerns about risks to the national economic recovery, and thus the states recovery – the budget deficit and geopolitical Iraq postwar concerns – Sohn is upbeat. I think that jobs will be added soon, he said