Washington state economic recovery will take years. Think 2025
Washington state’s economic forecast council released its first look at the potential for an end to our pandemic recession. It says a jobs recovery could happen by 2025.
KUOW Economy reporter Carolyn Adolph spoke with All Things Considered host Kim Malcolm.
The forecast council also says unemployment in Washington could hit 19.2 percent by the end of September. It says that will be the peak, and after that things are expected to start getting better.
Back in February, we were at around 4 percent unemployment and the state was projecting that unemployment would stand at around 5 percent by 2025. The council still says that will be true.
However, the state forecast council thinks we will have unemployment above 10 percent until the end of 2022.
This is indicator saying we are likely to have large numbers of people on unemployment for a long time. And we don’t know exactly what that looks like. The federal and state governments have been shoring up households with a combination of improved unemployment insurance and stimulus checks. How will those efforts sustain over the long term? That’s a major question.
These estimates based on what’s known now, such as Boeing layoffs, and also national-level economic data. But it’s only the state’s best guess of the way forward.
Manufacturing is not expected to recover by 2025. The state says it is assuming Washington will lose 16,000 Boeing jobs. That’s going to have a big effect on that sector well past 2025.
Also not coming back by 2025 is construction. That sector was expected to decline even without the pandemic. Now it’s going to even more depressed. But the state says 87 percent of Washington state’s economy is not manufacturing or construction. And in the Seattle area, we have a regional economic core that is strong in services - tech and all its offshoots. So when the economic forecast council stands back to look at non-farm employment – it sees hiring picking up next year and continuing to grow.
This is also a good time to zoom out and look at the big picture of employment here. Let’s say the state is right that Boeing’s announced 16,000 in job losses this year are all going to be felt in Washington. This means Boeing employment will have declined from around 70,000 employees to about 54,000 workers, at a time when Amazon and Microsoft both say they have more than 55,000 workers.
In this region, where Boeing once ruled, now tech does. Boeing’s world is shrinking because of the pandemic-related collapse of air travel and the continued grounding of the 737 MAX.
Meanwhile cloud computing continues to create opportunity for both Microsoft and Amazon. Amazon is seeing both risk and opportunity because of its role shipping to governments and households during the pandemic. Tech is expanding.