Another look ahead
Peeking into our South Sound crystal ball
Around this time of year and related to our position as “professional observers,” we at Business Examiner Media are often asked about prospects for the new year.
In reality, we’re not prescient, nor trained in economic forecasting. You’d do better by listening to (or read about) presentations by local experts who actually know what they’re talking about and can understand data from which they may be able to discern the future. (See the article on page 14 of this issue, for example.) Or go to the EDB for Tacoma-Pierce County’s annual meeting on March 2nd to hear Bill Conerly, Ph.D., a notable regional economist.
Nevertheless, due to popular demand – (OK, I got one request from a civic group to speak on the topic) – here is some of what I said.
Washington state ended 2016 with 82,300 more residents working than one year earlier and five consecutive months of lower unemployment rates.
Consultants hired by Washington Roundtable calculate there will be 740,000 job openings in the state over the next five years. Some of those will even be outside of Seattle King County, so we had better figure out how to get our children and/or grandchildren educated to be able to fill them.
In the South Sound, specifically, personal incomes and taxable retail sales are both up. So are the number of boxes being loaded onto and off of container ships in our harbor.
Vacancy rates in both industrial space and residential rental properties are shrinking, so rents are going up and developers have numerous new projects underway or in planning stages.
Real estate brokers reported a spectacular year for homes bought and sold in 2016 (see page 18 for more detail.) The major imbalance here is too few houses for sale and too many shoppers looking to buy them.
More and more new neighbors are coming to our communities; U-Haul data shows Olympia and Tacoma are both in the Top 15 cities nationwide in terms of more rentals trucks coming in than going out. With the population growth rate in western Washington at double that for the nation as a whole, we should prepare for even more cars in our way on local freeways.
If you need something to worry about, consider that fewer adults in the Puget Sound region today own a small business than did in past years. And those who do, have fewer employees – more than half have four or fewer on staff.
Perhaps that shrinking trend has something to do with the challenge for any entrepreneur to succeed with the extra hands taking money out of their revenue accounts.
The governor’s budget proposed the largest state business tax increase in decades – primarily by raising the B&O tax rate for the Services & Other classification. He figures these 170,000 firms won’t suffer much by handing over an extra $2.2 billion over the next two years.
Another “new tax” contribution is sought from companies that create a carbon pollution impact and a third by taking a piece out of capital gains realized by individuals. Mind you, the $4.4 billion in new Inslee tax revenues would be on top of a projected $2.6 billion growth by existing tax collections.
Add all of this to higher minimum wages and mandated sick leave for all employees, and one wonders why any of us try to earn a living as business owners. But we do.
Tell your legislators what you think.