TACOMA, Wash. – A “good, but not great” recovery for Pierce County in 2011 is predicted by Horizons 2011, the closely-watched, local economic forecast produced by University of Puget Sound economists Bruce Mann and Douglas Goodman, in conjunction with the Tacoma-Pierce County Chamber.
Unemployment in Pierce County will average 8.9 percent next year, only slightly better than the 2010 rate, the Horizons 2011 Pierce County Economic Index Report predicts. Retail sales over the upcoming holidays will rise 2 percent over 2009, giving some cheer to local businesses. The real (after inflation) personal income of the average resident will also rise modestly during 2011, reversing a three-year downward slide.
However, home sales remain highly fragile and the possibility of a currency-induced trade war among countries competing for exports with the United States leave the local outlook uncertain, the report’s authors say.
Mann (photo left) and Goodman (below), who have been forecasting the Pierce County economy for 23 years, presented the results of their research this morning (Thursday, Dec. 16) at the annual Horizons event at the Greater Tacoma Convention and Trade Center. The event is organized by the Tacoma-Pierce County Chamber. The Pierce County Economic Index Report is undertaken as part of University of Puget Sound’s Civic Scholarship Initiative, which partners the university’s faculty and students with others in support of community goals.
The research incorporates the Pierce County Economic Index, an 18-month, forward-looking index. The forecast is presented each year to businesses, government, and other organizations to help them plan ahead. Some of the major points in this year’s report include:
- The Great Recession ended and economic recovery began in Pierce County in the third quarter of 2010, more than a year later than the country as a whole.
- The Pierce County Economic Index (PCEI) will move ahead in the first half of 2011, partly due to the return of troops. But this recovery will slow during the second half, leaving the PCEI up 3.25 percent overall in 2011.
- Another 4,000 jobs will be added in 2011, but the labor force, too, will rise, in part because new labor has been attracted by the Northwest’s reputation for good job prospects and because the number of graduating students has risen. Local unemployment will slip to 8.9 percent in 2011, from 9.4 percent in 2010.
- Retail spending growth through 2011 will be a modest 1.1 percent higher in dollar terms. This will just about match the inflation rate.
- Per capita income, after accounting for inflation, will rise 1.5 percent in 2011, reversing a three-year slide and strengthening purchasing power.
- Home sales will continue to suffer. Single family home activity (sales and listings) will fall by 6.8 percent in 2011, partly because of the boost given to 2010 sales by tax incentives.
- Retail real estate will continue to struggle through 2011, while office real estate faces a serious challenge following the departure of Russell Investments. The outlook for commercial and industrial real estate is cautiously optimistic.
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.
The keynote address at the breakfast was given by Robert Baur, managing director and chief economist for Principal Global Investors. Sponsors of the event are the Port of Tacoma, Puget Sound Energy, Business Health Trust, Regence BlueShield, Carlile Transportation Systems, and The Boeing Company.
Copies of the PCEI Report may be obtained by contacting Media Relations Manager Shirley Skeel: sskeel@pugetsound.edu; Tel. 253.879.2611; Cell 510.684.6715.
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