Employment Security Department: Tri-City region had stable economic expansion in 2017, with positive outlook for 2018
In economic analysis, 2017 marks a decade since the peak economic activities happened in the nation, state, and Tri-City region.
What is worth mentioning is that Tri-City region has gone through some of the worst economic contractions and best economic expansions in recent history with a jetpack in the economic forefront.
The average annual rate of nonfarm job growth for the Tri-City region has been 2.1 percent over the last decade. Tri-City regional growth is almost double that of Washington state’s growth of 1.2 percent and three times faster than the nation’s growth of 0.6 percent.
Current economic conditions are showing robust nonfarm employment activities and great improvements in the labor market.
Local nonfarm job growth has been widespread in 2017, however the main driver of growth was the construction industry, with a 15.6 percent increase over the year. This marks fifth year of rapid job expansion in construction activities in the region.
Both homebuilding and commercial building for the Tri-Cities area have done quite well, while at the same time showing a trade skills gap and growing labor force demand, which were created by employment declines during the 2008 recession.
More homes were sold in the past three years than in all years of 1980s. In the1980s, home prices were four and a half times less expensive than the average $267,051 home cost in 2017.
While the inventory of homes is the lowest since the early 1990s, the number of housing permits increased along, with total value of the permits. Real estate prices are continuing to increase, along with the population and business demand for more real estate availability.
In the meantime, other industries have shown significant gains in employment, including education and health services, which expended by 2.4 percent over the year and 3.6 percent a year over the past 10 years.
Local health care services are becoming a regional hub by bringing in more specialized services that were not available before.
At the same time, local school districts are working on facility expansions and renovations and also building new facilities to accommodate a growing student population. Leisure and hospitality and local government are yet another group of industries that are growing mainly due to population demand.
Total population was estimated at 283,800 in 2016, an increase of 11 percent since 2010, compared with the state’s increase of 8 percent and the nation’s 4.5 percent. Median age is 33 years for the two-county region, compared to median 37 years of age in the state.
Overall, the Tri-Cities has seen good expansion in the past couple years. Even when compared to the 2007 peak, the region has continuously reached new growth levels in both business and workforce development.
The growing business market supported expansion in the labor market, which increased by 1.8 percent. This marks three consecutive years of steady expansion in labor market, which also brings early signs of skill gaps and tightening of the labor market supply.
Economies and consumers are vulnerable to shocks of different inside and outside variables, which have weakened economic growth in certain industries, including professional and business services, and financial services. However, inflation is still in check, which helps boost household confidence in their future opportunities.
In 2016, average household income was over $75,700, an increase of 2.1 percent from 2015. Increasing household income and local payrolls (up by 5.0 percent over the year) contribute greatly to consumers’ ability to grow discretionary spending in local and regional economic markets.
What to expect in 2018? It is one of many good questions that we all have. However, current employment and unemployment trends, along with population growth are showing very positive outlook.
Projected growth rate for the Tri-City region is between 1.8 percent and 2.0 percent. Some of the industries that are expected to continue to grow in 2018 include accommodation and food services, health care and social assistance, educational services, transportation and warehousing, construction, and wholesale trade.
This story was originally published April 1, 2018 at 3:41 PM with the headline "Employment Security Department: Tri-City region had stable economic expansion in 2017, with positive outlook for 2018."