After another solid year in 2019, what do the next several months look like for South Sound businesses? It’s a question on the minds of many.    “For many South Sound companies, 2019 was a record-breaking year,” said Jon Jones, president and CEO of Washington Business Bank. “I expect 2020 will be much of the same, with continued growth in the real estate and professional services sectors. Should be another great year for business in the South Sound.”    Jones’ positive beliefs about the future are echoed by many leaders across the region, including the six economic development directors we interviewed on the matter. A selection of excerpts from those interviews is included here.  

Bruce Kendall, president and CEO, Economic Development Board of Tacoma/Pierce County

What recent trends of economic development have been occurring in Pierce County? 

The economy is doing very well across all the sectors that we pay attention to. Healthcare and health services are going to continue to grow. Our two largest institutions, MultiCare and CHI Franciscan, are continuing to grow, as are others, a lot of which is driven by demographics. The aging population won’t stop, so we’re fortunate to have those two big institutions headquartered here. Both the care side and the administrative side will see continual growth. 

We’re also a global distribution center, thanks to the Port of Tacoma. In spite of debates over tariffs and trade policy, that has continued at a very healthy pace.

We continue to be one of the fastest-growing areas in the country, with a lot of people moving here for good career opportunities, quality of life, and housing. That doesn’t appear to be slowing down. And all the companies that are employing those folks — in tech, finance, insurance, real estate, architecture, all the service industries that support those sectors of the economy — should continue to see growth, as well. 

What has your team been focused on? 

We focus a lot of energy on aerospace, technology, logistics, and trade. Those are the four main areas of the economy where we work on developing proactive strategies for their long-term health and expansion.

We also focus on recruitment and retention. We have about 40 companies in our recruitment pipeline in industries across the board. Almost all of those are from out of state, and they’re expanding into the Pacific Northwest. So, we work directly with companies to help them find brokers and locations for their businesses. For our 200 existing Pierce County companies that are primary employers, we support them to help solve whatever problems of expansion they’re facing. 

What topics will continue to be front-of-mind in the coming years?  

It seems like we’ve been fixing I-5 since my grandparents were alive, and the region continues to grow. We’ll look at continuing to invest in our infrastructure and transportation, including transit — whatever is going to be a better approach. That’s a wild card that will continue to be debated. 

We are the most trade-dependent county in the most trade-dependent state in the United States. There are more trade-related jobs in Pierce County than in any other county in the country — about four jobs out of every 10 are tied to trade. That’s not going to change. 

Other points of interest:

On education: Our educational institutions, especially University of Washington Tacoma, are on a growth trajectory. UWT has about 5,500 students now, and they’re expecting to grow to 10,000 students in the next 10 years. That’s important for economic development because a big part of the labor force of the future comes out of our local private, public, community, and technical colleges. 

On manufacturing: The manufacturing base in Pierce County is about one out of every 10 jobs, a lot of which is tied to aerospace. So, we’re carefully watching to see what happens with the 737 MAX. Boeing has announced suspending production in January, but with no layoffs. We have about 70 aerospace suppliers in Pierce County, most of which make some part of the 737 as an important piece of their business.

Michael Cade, executive director, Thurston Economic Development Council

What recent trends of economic development have been occurring in Thurston County? 

Thurston County has seen significant growth in the private sector — and continues a trend of diversification that started during the recession of the last decade. Private sector growth continues to grow at approximately 12 percent, while the public sector employment has seen steady growth of approximately 3-5 percent during that time. 

Our largest single economic factor in terms of employment and wages is the healthcare sector. Both of the major critical care hospitals, Providence and Capital Medical Center, drive our county’s flagship employment.

Other major developments (are) a continued growth of the warehouse and distribution sectors of the economy.

What has your team been focused on? 

In 2015, the EDC Board of Directors made the strategic step toward a partnership with the South Puget Sound Community College to create the Center for Business & Innovation. … We wanted to create a system that was so dynamic and supportive of business that it would be a center that would work to attract new capital into our economic system. Today, at the Center for Business & Innovation, we have located a core group of technical assistance providers, business counselors, business mentors, and referral network that is one of the highest concentrations of such providers per capita in the entire state of Washington.

What do you anticipate becoming of larger significance in the coming years? 

Craft brewing/distilling/cideries: Our county was designated as an Innovation Partnership Zone for this sector. It is a recognition of the resources and dynamic partnership between private business, education/workforce, and civic organizations. This will continue to emerge and become a catalyst for economic growth and urban development for years to come.

Also, the development of the SW Washington Agriculture & Innovation Center located in Tenino will be a significant catalyst for the region’s agriculture — and will be a partnership between education and private employers working to capture new markets for our agricultural producers.

Other points of interest:

On other growth sectors: The retirement sector has been a driving force of our regional economy. (We’re also seeing growth in) specialty brewing and distilling, the IT telecommunications sector, and the audio-visual and software elements of the region.

On artificial intelligence: Our EDC staff did an analysis of the current employment markets of Thurston County and how they might be impacted by AI — which classifications will be downsized and/or have a high likelihood of elimination. This was a significant percentage of our employment market. Our challenge will be to seek economic development strategies that will provide a backfill mechanism of opportunities for those displaced.

Jennifer Baria, executive director, Mason County Economic Development Council 

What recent trends of economic development have been occurring in Mason County? 

Overall, Mason County’s economy has continued to grow stronger every year. The gross regional product is up and growing (since 2009, it added $250 million, bringing our GRP to $1,306 million) as is local sales tax collections.

Mason County’s employment levels/job numbers (unemployment is low at 6.8 percent) have shifted with manufacturing, construction, and service jobs dropping, while health, retail, professional services, and utility industry employment have grown.

While total employment has not quite reached 2008 levels, it’s getting close, but over that same period, total quarterly earnings have increased by $35M, with $24M of that increase occurring since 2014.

What has your team been focused on? 

We had two major focuses in 2019: local business support and focused recruitment. 

While we have always helped and supported our local businesses and community — with close to 4,500 businesses in our county — it became apparent that we needed multiple strategies that included in-person assistance and social media support. We started a business spotlight last holiday season. We have a very engaged social network, and this really brought a lot of attention and profit to the highlighted businesses.

This year, we also started focusing work on recruitment of commercial/hotel development, manufacturing, distribution, and multifamily housing development. Our already 200,000+ annual visitors will continue to grow, and we need places to keep them in Mason County. Work on hotel recruitment became our priority recruitment goal.

What are the most significant opportunities that businesses outside of your county should know about? 

(We have) highly connected fiber, two Opportunity Zones, lower cost of living, and six targeted workforce academies. 

Other points of interest: 

Emerging trends of the last five years: e-commerce growth 

Biggest win for 2019: Partnership for hotel development

Matt Matayoshi, executive director, Lewis County Economic Development Council

What recent trends of economic development have been occurring in Lewis County? 

Over the last five years, the sector with the best job growth is the manufacturing sector, (added) 449 jobs. Transportation and warehousing (added) 406 jobs, and accommodations and food services (added) 398. Our largest GDP sector is manufacturing, at $408 million.

What do you anticipate becoming of larger significance in the coming years? 

Distribution and transportation sectors will continue to grow. We are not certain what specific projects will locate here, but there will be growth in transportation logistics. Healthcare also continues to grow. 

What have been the biggest wins of 2019? 

Construction of the new SWIFT training facility at Centralia College. A 12,000-square-foot building that will provide an opportunity for customized workforce training. It will (also give) businesses flexible space to have their employees trained. 

Lewis County EDC also had our second year of a program called Smart Tank, a pitch-style event with workshops and support for startups that wish to scale up their business.

Other points of interest: 

On wages: Highest wages are in utilities: TransAlta, Tacoma Power, Lewis County PUD, Chehalis Power. The average wage is $90,064. Unemployment is at 6 percent in September 2019. 

On significant opportunities in the county: Toledo Tel with 1 gigabit speeds, reliable power for large power users, Centralia College, and I-5 and rail access.

Dru Garson, CEO, Greater Grays Harbor

What recent trends of economic development have been occurring in Grays Harbor County?

Vacation rental development at both Seabrook and Oyhut Bay in the Ocean Shores/North Beach area has seen tremendous growth and interest over the past few years. Seabrook is almost finished constructing their new Main Street that will create eight to 10 new businesses and additional jobs in the community.

The fastest-growing industry sector for the past few years has been the Accommodations and Food Services Sector, which added 604 jobs between 2014 and 2018. This has also resulted in an increase of taxable retail sales of $930 million in 2014 to $1.146 billion in 2018.

What has your team been focused on? 

Tourism development and promotion: Business attraction and relocation can often hinge on the livability of a community, the quality of life, and the vitality of a region. Our county has a diverse assortment of natural attractions that enhance the quality of life — this includes proximity to Olympic National Forest and Park and many outdoor recreational activities. We have been working on efforts to promote our natural attractions.

(We’ve also been looking at) business retention and expansion, entrepreneurial development, business recruitment, and childcare. 

What are some of the emerging economic sector trends that you see today that you did not see five years ago?  

The cannabis industry has experienced tremendous growth within Grays Harbor County over the past five years. Within our county, we have 10 retailers and 34 producer/processors. We collected more than $9 million in tax revenue, $5 million in sales tax, from total sales of approximately $56 million since legalization in 2014.

Other points of interest: 

On housing: Our median home price has increased from $123,200 in 2014 to $191,600 in 2018, with a corresponding increase in existing home sales from 1,310 in 2014 to 1,920 in 2018. 

On levee projects: During the 2019 legislative session (more than) $10 million was allocated toward the levee projects (in Aberdeen and Hoquiam). The North Shore Levee is on pace to complete final design by the end of 2019. Construction will likely be completed in phases, with the first phase bid out for construction in the summer of 2020. This project could save local property owners over $2M per year in annual flood insurance premiums and will make renovating properties within the current flood zone much more feasible.

Jim Sayce, executive director, Pacific County Economic Development Council

What recent trends of economic development have been occurring in Pacific County? 

Unemployment is leveling off, but we are still beholden to strong seasonal trends. (We’re seeing) subtle signs of efficiency gains in production, (as well as) signs of a rise in benefits (for employees): It’s a worker’s market, and to attract, you’ve got to add more value to the benefit package. 

(The) very slow growth in multifamily occupancy construction is contrasted with robust growth in custom homes. And historic robust shellfish and fishing businesses are under enormous pressure from changing ocean conditions (and) new regulatory constraints. 

What has your team been focused on? 

Small businesses development, education, social media training, Lean Training, Future of Work training.

What are some of the emerging economic sector trends that you see today that you did not see five years ago?  

(There is) full recognition that telecommuting and home-based internet businesses have real legs and in our economy are representing about 5 percent of the workforce. This will grow. 

(We also have) millennials entering the workforce and leadership (positions), and that’s a good thing. 

Other points of interest: 

On anticipated trends: Home-based businesses, telecommuting, and our project PCIBOO

On demographics: I see our niche of “environment exclusivity” starting to attract very unique millennials. Sophisticated in technology, they desire a compatible environment with low population, rural attributes, and access to the internet.