Spokane Area Economic Update Charts
January 19, 2013 3 Comments
(Update: By request I have turned comments back on for some recent posts. They were turned off, mostly, a year ago, since I spend little time on the blog now, and comments require monitoring. Hope that helps and thank you for your suggestions, ideas and corrections.)
The State’s “adjusted” employment data for Spokane County (thru November 2012) shows an upward spike:
The US government’s Bureau of Labor Statistics “raw” data for Spokane County (through November) shows a subdued seasonal rise in jobs. (Data is from the US BLS “One Screen” database). In a traditional post recession recovery, we should be seeing a job growth rate similar to how it was before the recession took hold (pre-2008).
Hospital, Manufacturing, Education, Convention Center Attendance and More, after the break …
Hospital Sector Employment
The hospital sector in Spokane County is losing jobs but …
Overall health care sector employment has begun to rebound. The annual growth rate between 2006 and 2008 was 5% to 7% which is not sustainable. At that rate, by 2018, we’d have 70,000 health care workers and 31% of all workers in Spokane County would work in health care. Which is not sustainable. That would mean there would be 2 productive sector jobs for every 1 in health care – not gonna happen.
The above chart data comes from the State’s ESD. Here is another view of the health sector employment from the BLS which, we presume, uses a different definition of health care worker since the numbers are slightly different but chart curve is similar.
Education Sector Employment
Not long ago there was talk about layoffs in the education sector. As you can see, the education layoffs of 2007-2008 did not really happen as everyone was rehired and actual employment rose through 2011. Also note the unique “dental x-ray” graph of education sector employment caused, apparently, by layoffs of non teaching staff every June and rehiring every September. To put that in perspective, the school district summer layoffs are about 1% of all non-farm jobs in Spokane County.
Manufacturing shows an upswing. Manufacturing in Spokane was never as large as people seem to remember it – but it has begun a rebound. On a short term chart, this looks good:
However, a longer term trend chart (through 2011) puts this in perspective - Historical context matters.
These charts do not capture the change in the types of manufacturing. For example, Spokane lost thousands of high paid skilled steel worker jobs (closing of Kaiser aluminum smelter) and lost thousands of high tech manufacturing jobs (Agilent, Itronix, Alcatel/Lucent and so on). We do not know if the new jobs are high paying or low paying. Update: I was alerted to this news article that says higher skilled jobs are being eliminated due to new technology and new job creation is mostly creating lower paying jobs.
Spokane Technology Job Growth
The Spokesman-Review describes 7.7% tech sector job growth in Spokane. The number is accurate but leaves out critically important historical context. The 2010-2011 7.7% growth is a large percentage increase in a small number which followed large losses in the Spokane tech sector. Follow the red line (which measures rate of growth, not actual jobs) from left to right. (Data from here.)
To understand the cumulative effect of tech sector job growth and losses, let’s draw a chart that assumes (for convenience) that there are 1,000 tech jobs at the start of 2002. That year, 14% of the jobs were lost (even more jobs were lost in 2001 but we do not have exact number). Now, let’s add and subtract jobs corresponding to the growth and loss periods to arrive at the end of 2011: Spokane County now has -12% fewer tech jobs than a decade ago.
Historical context matters. Corollary: The local news’ reporting capability is not very good. They do not do historical context. I have long bugged them about this. Other media, such as in Seattle, often present important context, historical trends and interactive charts. They “get the web”. Adding charts and historical context to local news reports would be of tremendous value to the public in helping them understand the local economy and opportunities. I am not going to keep posting these charts here forever!
Spokane Airport Economic Proxies
Spokane “International” Airport passenger levels continue to drop. According to the airport, the passenger count acts as a proxy measure of the local economy. Air traffic is increasing at all NW airports except down at Boise (yet Boise has 75% more non-stop destinations than Spokane’s non-stop destinations). In 2012, the Tri-cities saw a +1.4% increase in passengers.
A declining number of air passengers is an indicator of a decline in Spokane’s economic base. SIA previously forecast a rise in passenger boarding throughout this period.
Remember, the decline in passengers is not the fault of the airport or the airport’s management (which is quite decent) but is a reflection on the local economy. Airport Director Larry Krauter points out that significant changes in the airline industry and operations are making it more difficult to use airport operations as an economic proxy indicator.
As seen in the passenger chart, the prior two mega Convention Center expansions which were promoted on the basis of increasing travel and visitors to Spokane were followed by an actual drop in air travelers to Spokane.
The County is spending $5.4 million to rebuild airport taxiways and aircraft parking areas at Felts Field. The “return on investment” of this spending may be negative.
Here’s the most recent forecast for SIA growth (I agree with their forecast methodology but the forecast may need to be revisited often):
WSU Enrollment by Campus
WSU-Spokane campus enrollment continues to slide after $113.2 million dollars of new construction. The decline was not in the forecast impacts for a Spokane-based medical school.
Data for this chart comes from: WSU Institutional Research, “Annual Average Headcount Enrollment 1990-2011” and “Enrollment by Campus, Level and All Campus Total Fall 2012“
Spokane Area Average SAT Scores
Data from the Community Indicators web site: “The share of students taking the test has declined 4% in the county, and has increased 10% in the state, since 1998-1999.”
Convention Center and Public Facilities Attendance
Arena attendance is now at 1999 levels per the chart below, from EWU. In spite of claims that the Convention Center would bring in outside visitors, the declining travel at the airport showed this to be false. Over the duration of these charts, attendance is flat to slightly down. The chart is from the Community Indicators of Spokane (EWU).
The Spokane PFD picked the two years (see spikes at 2007 and 2010) featuring the national skating championship to present a strong economic impact even though these years were not typical. Lots more here including more data, charts, other market data, background, links to the PFD economic impact studies and more. The Spokane PFD seems to have hid the attendance figures from the public.
The local paper was unable to report on this chart – partly because that involves historical context and they do not do historical context – but perhaps because the paper is owned by the largest downtown property owner which donated heavily to fund the campaign. Conflicts of interest matter. They could out a gay mayor but were unable to report on PFD attendance figures hiding in plain sight at EWU – who knows why the SR was unable to report historical attendance at odds with another expansion – but the “optics” look bad.
Academic research on convention center economic impacts finds they are intended as a tax subsidy to the hotel and restaurant industry and businesses near the centers. In Spokane, one board member is required to be from the hotel industry giving them a favored status in managing this public agency.
This chart and the original data should be on the Spokane PFD web site but when I researched this topic last year, it was no where to be found. They could greatly improve their openness and transparency.
Spokane Real Estate
Number of sales in Spokane is rumbling along at year 2000 levels, and in the Spokane Valley is at year 2001 levels. Reminder: The Y-axis for the # of sales charts is a logarithmic scale. The change in unit sales is much larger than it appears in the chart.
Government Budget Cuts
When politicians and the media report about government budget cuts, they are not - usually - talking about budget cuts in real world terms like you and I use. When you and I say we will cut our personal budget, we mean we will spend less than we did before.
When politicians talk about cuts, they start by forecasting a larger budget for the coming year and then make cuts from the forecast wish list and pretend its a “budget cut”. The end result is a budget that, after cuts, is still bigger than the year before.
Which makes the following news shocking – actual year over year cuts:
- Spokane County cuts budget to 1% below the previous year (yet the County’s “CEO” will see a 26% pay increase). More here.
- City of Spokane’s freezes general fund budget (this is only the general fund budget – the City has other budgets to play with, which get little press coverage)
Actual year over year budget cuts are most likely due to a stumbling economy with vacant buildings.
The economic trends suggest a Spokane that might have hit bottom. For most of the rest of the state, this bottom was reached in early 2010 and then followed by real growth – Spokane is three years late.
Compare the State’s growth in jobs with Spokane’s non growth in jobs – the State hit bottom in early 2010 while Spokane lags the state by years.
State of Washington – total non-farm Jobs
Spokane County – total non-farm jobs
Keep in mind that the spike, at right, does not exist in the raw BLS data.
We are not yet seeing the type of growth that would be expected after a recession. Instead, we see a muddle along the bottom curve. By comparison, the S.F. Bay area saw the strongest one year job growth in a decade, in 2012.
In the past 12 months I have been in 8 western states. In other communities – Salem, OR, Boise, ID, Orem, UT, SF Bay area, King County, WA and more - I see dramatic growth with new office buildings, new construction underway, and busy shopping malls and roadways indicative of a dynamic growing economy. Only in Las Vegas do I see areas of bombed out urban decay similar to Spokane. Upon return to Spokane, passing by downtown reveals a worn out, dirty, tired, mostly decaying set of buildings built long ago, compared to the shiny new construction found elsewhere.
Spokane’s economic output remains weak . As we previously showed, incomes in Washington State grow twice as fast as in Spokane - Spokane residents fall further and further behind every year.
What’s going on in Spokane is not right. The economy has suffered badly, has lost numerous businesses, and only seems to have maybe bottomed. There is nothing on the horizon suggesting this area will return to the way things were a few years ago. One correspondent suggests, the “new normal” may not be anything like five years ago but might settle at a new, reduced economic level in Spokane.
This is very sad. Can we fix this? The point of this blog has been to highlight what the data says – not the silly claims and quotes that get thrown about. The data is what it is. And its damn ugly. Data matters. Historical context matters. Conflicts of interest matter. Honesty matters.
Open Questions – Still
What ever happened to the GSI bid for the Boeing plant? In 2011, there was a mad dash to ram through raising building height maximums to 150 feet throughout the County because Spokane was going to be the next site for a Boeing 737MAX assembly plant. GSI posted those claims on their Twitter feed but then denied they’d every said that. Two weeks later, that plan crashed when Boeing chose elsewhere but GSI then announced they had never actually bid for the Boeing plant (huh?) But never fear, they were going to put in a formal bid to Boeing in the spring. What ever happened to that? Seems to have vanished.
What ever happened to the bribe an airline program? 18 months ago local airport officials said they received a million $ grant to bribe an airline to restore service from Spokane to Los Angeles. Where did it go?
Update February 19: Delta Airlines took the bribe and will offer one non stop flight per day on a 76 passenger jet. Previous service to Los Angeles was discontinued in 2004 and 2008.
Updated January 20, 2013
- Added real estate, SAT and public facilities charts.
- Added note that SIA management is not the cause of the passenger downturn, the problem is the economy.
- Various wording and editing updates.