The Pierce County Economic Index is forecast to log its seventh year of consecutive growth in 2019. Two percent population growth, stable labor force participation and a reduced unemployment rate have combined to increase both real total personal income and real personal income per capita. A further contributing factor is a likely decrease in the number of workers who are employed only part-time for economic reasons, which has continued to see declines at the state level.
With the BEA data revisions mentioned previously, the 2016 Q4 PCEI was revised upwards by 1.4 percent, to 222.7. Last year’s 2018 Horizons Economic Forecast estimated the PCEI would have annual gains of 3.3 percent in 2017 and 2.3 percent in 2018. The revised estimate for this report puts the 2017 gains slightly higher, at 3.5 percent, with the growth estimate for 2018 revised upwards to 3.0 percent.
Looking forward, the PCEI is forecast to rise 2.3 percent in 2019, ending the year at 242.9. The forecast is based on an estimated 3.3 percent increase in real total personal income and a 1.3 percent increase in real personal income per capita. The PCEI is now tracking just 0.5 percent below its long-term trend line of 2.55 percent annualized growth. While the gap has narrowed since 2013, when it was 6.1 percent below the trend line, the forecast growth of only 2.3 percent will keep the PCEI slightly below its long-term trend. This isn’t necessarily bad news, as periods when the PCEI ran above its trend line tend to be followed by slower or negative growth. This suggests that any economic slowdown in the next few years is likely to be mild.
COMPARATIVE COUNTY ANALYSIS
The PCEI methodology can be applied to income data for other counties, states, or the nation to generate annual economic indices for comparative purposes. While these indices aren’t forecast forward, as they are for Pierce County, they do allow for growth comparisons. While any county in the U.S. can be evaluated, the comparison here is limited to King, Lewis, Snohomish, and Thurston Counties.
Not surprisingly, King County has had the most dramatic gains since 2010, with annualized gains of 5.2 percent. This is followed by Snohomish County, with 3.3 percent growth, and Pierce County with 2.8 percent growth. Lewis and Thurston Counties lag, with growth averages of 2.1 and 2.0 percent, respectively. The driver behind King County’s economic index gains is a 5.8 percent annualized gain in real per capita income. In contrast, Snohomish County had 4.0 percent gains, followed by Pierce County, with 3.6 percent gains, Lewis County, with 3.4 percent gains, and Thurston County, with just 2.7 percent annualized gains. In terms of levels, Pierce County’s real personal income per capita surpassed Thurston County’s per capita income back in 2014, and reached $49,200 in 2017. King County’s per capita income was $83,400 in 2017, more than twice that of Lewis County, and substantially above Snohomish County’s per capita income of $52,400.