The recession in Pierce County will continue well into next year, hitting jobs, home sales, businesses, and personal income, according to two University of Puget Sound professors of economics — Bruce Mann and Douglas Goodman — who presented their findings this morning at the annual Tacoma-Pierce County Economic Forecast Breakfast “Discovery Leads to Recovery / Horizons 2010 Annual Economic Forecast.”
Dr. Mann and Dr. Goodman told attendees a long-awaited rebound will not begin until the third-quarter of 2010, leaving the county lagging well behind the nation, which many believe is already in recovery. They add that Pierce County unemployment, which averaged 9.3 percent through 2009, will rise to 9.75 percent in the first quarter, then slowly improve.
The Horizons 2010 report incorporates the Pierce County Economic Index, an 18-month forward-looking index. The forecast is presented each year to business, government, and other organizations to help them plan ahead. Some of the major points in the report include:
— For 2009 the Pierce County Economic Index (PCEI) will be down 3.1 percent compared to 2008, the largest year-over-year drop since tracking began in 1975. This includes a record drop in employment, with 11,000 fewer jobs in the county;
— In early 2010 the downturn will continue in Pierce County. On an annualized basis, the PCEI will fall about 3.25 percent in the first quarter as uncertainties over health care reform and reduced activity in Iraq offset the relative strength in the health care and military sectors that are key to the local economy. In comparison, the Commerce Department reported that the U.S. economy had already expanded at an annualized rate of 2.8 percent in the 2009 third quarter;
— The PCEI will rise 1.3 percent on an annualized basis in the third quarter of 2010. The benefits of the national recovery, increased trade flows, new military construction spending, and a recovering housing market will âbe enough to offset the negative effects of Russell Investments moving out of the area,â the report says;
— The annual PCEI for 2010 will decline 0.1 percent overall year-on-year. This will be the first time since 1975 that the PCEI will register two years of back-to-back annual declines;
— The 2009 holiday shopping season will be weak, with inflation-adjusted fourth-quarter sales down 1.6 percent from the previous year;
— In 2009 Pierce County residents will see their personal income fall by a total of $800 million, leaving the average income at $33,700, down 3.9 percent for the year;
— Sales of single-family homes will start rising in the fourth quarter of 2009. The first half of 2010 will experience the strongest home sales, with somewhat slower growth thereafter as the tax credit disappears and fewer bargains are available;
— For the first time in five years, the outlook for the industrial real estate market in Pierce County is not bright.
The PCEI was the first economic index of its kind in the United States, and remains one of only a few econometrically based local area forecasting models. The development and implementation of the forecast uses both student research and the expertise of university faculty.
This morning’s breakfast event was held at the Tacoma Convention Center. The keynote address was given by John Mitchell, principal of M & H Economic Consultants of Portland. Mitchell writes Sterling Bank’s economic newsletter and formerly served as chief economist of U.S. Bancorp and as economist western region for U.S. Bank. Sponsors of the event are First Citizens Bank, Puget Sound Energy, Regence BlueShield, and Tacoma Public Utilities. The event is organized by the Tacoma-Pierce County Chamber of Commerce.
Copies of the Horizons 2010 report may be obtained by contacting University of Puget Sound Media Relations Manager Shirley Skeel at email@example.com or (253) 879-2611.