Looking at the Tri-City economy and population change, one is to ask: How do we measure economic progress in any given geographic area? This tends to be a debatable question and you might not get an easy answer, but you sure will get many different perspectives. Taking a look at the business and population segments in one geographic area and comparing that to the same or higher geographic levels is one perspective.
Some of the leading indicators of economic growth include employment growth, labor force growth, unemployment rates and population changes.
Tri-Cities rounded out 2016 with the fastest-growing job market in the state, with 3.6 percent growth over the year.
With more than 8,000 businesses, the Tri-Cities represent a very diverse economy, led by the area’s top five industries that account for more than 50 percent of employment. Major employing industries include professional and business services, healthcare and social assistance, retail trade, agriculture and educational services.
Much of the growth in 2016 was expected to be in the goods-producing industries, which grew 10 percent over the year. Manufacturing added more than 1,000 jobs in 2016, which is close to 15 percent change over the year. Even though manufacturing is not in the top five industries in percentage of total employment, it remains one of the fastest growing industries for the area. Manufacturing locally is represented heavily by food-processing, which supports many industries including agriculture, wholesale trade, transportation, warehousing and more.
Agriculture is the third largest industry in the area, with more than 11 percent of employment share. This industry provides income and employment for more than 12,750 people in the region.
Construction had another record year in 2016. Construction managed to recover all jobs lost during the national 2008 recession and reached a new high with close to 7,000 jobs and 6.2 percent expansion rate. Construction activities in both homebuilding and commercial building for the Tri-Cities area has done quite well, and is expected to weather the shift to modestly higher interest rates. Real estate prices are continuing to increase, along with the population and business demand for more real estate availability.
The latest wage records show that the average annual wage in Tri-Cities has increased by 3.5 percent over the year to $47,419 in 2015. However, total payroll accounts increased by 6.8 percent for the same time period with a total over $5.5 billion dollars. Wage increases contribute to overall GDP growth in the area.
Two of the contributors to the payroll growth include transportation and warehousing, which increased more than 15 percent in total payrolls, and added more than 4 percent to employment numbers.
Hanford-related employment mostly in professional and business services is stable, with more than 21,000 jobs. This is the largest industry in the area, and is responsible for innovation and research, nuclear clean up and site maintenance and management. The most important aspect of Hanford-related employment is its contribution to the total payroll. In 2015, Hanford alone represented more than 34 percent of total payroll in the Tri-Cities area.
Hanford payrolls contribute greatly to the local economy and local GDP, but industries that rely on population are expanding as well. That includes both private and public healthcare and social services and educational services. These two industries pay good wages to more than 25,000 workers in the area, $48,000 and $35,000 respectively. Demand for such services continues at all segments of population demographics.
Population and business demand also drives growth in the leisure and hospitality industry, which expanded by 8.8 percent in 2016. This industry provides more than 11,000 jobs in the area and provides very valuable services to local residents and visitors.
Population in Benton and Franklin Counties is 279,116 as of 2015, the U.S. Census estimates. The average annual growth rate for the past five years has been 2.7 percent in Franklin County and 1.7 percent in Benton County, compared to the state’s average annual population growth of 0.8 percent.
Local area population and businesses are propelling this community forward with creation of jobs and ample supply of workforce. The labor force market reached more than 134,400 participants in 2016, with 2.9 percent growth over the year. An influx of labor force into the job market has kept the area’s unemployment rate the same as in 2015, at 6.8 percent. This is not concerning because labor force growth is sign of population confidence in local economy.
We expect to have yet another year of growth in the area. Much of the growth in 2017 is expected to be in both goods-producing industries like manufacturing and construction, and service providing industries like healthcare, education, transportation, warehousing, leisure and hospitality, retail and food services.