Washington job growth soars

OLYMPIA – In the past year, job growth has been excellent in most parts of the state. Employment rose more than 3 percent in Tacoma, and nearly 4 percent in and around Seattle.

But where has employment surged the most?

Spokane County. From October last year to last month, employment grew nearly 5 percent. That translates into more than 10,000 new jobs.

“That’s the highest growth rate that we’ve seen since 1995 at least,” said Jeff Zahir, a Spokane-based economist for the state Employment Security Department. “It’s phenomenal.”

The job growth was among the generally-cheery findings in the state’s latest quarterly revenue prediction, released Thursday in Olympia by the state Economic and Revenue Forecast Council.

“It’s nice to have a sunny day,” said Rep. Jim McIntire, D-Seattle, chairman of both the council and the House Tax Committee.

The economic outlook has been sunny for a while in Olympia, actually. In June, chief state revenue forecaster Chang Mook Sohn told lawmakers they would have $960 million more than expected by the end of the 2009 fiscal year. In September, he added another $412 million. And on Thursday: another $57 million.

“In my whole time in the Legislature, we haven’t been in better shape going into a budget season,” said Senate Majority Leader Lisa Brown, D-Spokane.

Full state coffers bring their own problem, said state budget director Victor Moore.

“There’s expectations from everyone that ‘Now’s the time,’ ” he said. Gov. Chris Gregoire’s budget priority, he said, will be “education, education, education.”

But Sohn’s good news came with a note of caution: After exceptional growth for three years, the state is seeing the first signs of a long-predicted economic cooling. The economy remains strong, Sohn said, but the growth is slowing.

Much of the consumption that has spurred the economy, he said, has come from homeowners tapping the equity in their fast-appreciating homes.

“We are watching very carefully how the housing market is evolving,” Sohn said.

Statewide, the fastest-growing employment sectors are software publishing (up nearly 13 percent in a year), construction (up 10 percent), aerospace manufacturing (up nearly 9 percent) and business and professional services (up nearly 6 percent). All told, the state has added more than 110,000 new jobs in the past year.

In Spokane, Zahir said, the local job growth has been mostly construction-related. The work on the convention center, street utilities and other projects have spurred jobs for both builders and related industries, like furniture.

On a smaller scale, banking, health, education, retail and manufacturing have also been doing well, he said.

“It’s to the credit of business owners here in Spokane that they’ve made the decision to give their employees raises above inflation … and to invest in our area by hiring people instead of buying computers or painting the building,” he said.

Interestingly, Washington – which was slow to emerge from the last recession – is now doing better than most of the country. Personal income has risen an average of about 10 percent in the last year here, versus just over 7 percent nationwide. Washington employment is rising more than twice as fast as the 1.3 percent national average. Home sales – which have dropped nearly 4 percent nationwide – have barely dipped in Washington.

Single-family housing permits have plummeted both statewide and nationally, dropping by about 24 percent in the past nine months. But that’s offset by Washington’s unusually strong growth in multifamily construction: up 35 percent in the same time period.

“At this time of a weakening national business cycle, the state economy is still doing very well,” said Sohn.

Most retailers are expecting slightly lower sales this holiday season, he said, because of the weakening housing market. But that’s offset somewhat by lower gas prices and low inflation.