Washington’s personal income growth – a good proxy for how the economy is doing – continues strong. Seattle Times business columnist Jon Talton writes,
Personal income in Washington grew by a seasonally adjusted 1.5 percent in the first quarter, the best performance among the states. That’s compared with the fourth quarter of 2015.
Indeed, much of the quarterly gain was the result of the information sector and its generous stock grants.
Still, the overall net earnings growth here was 2.1 percent, also the best in the nation. (The broader category of personal income, along with earnings, also includes other elements such as property income and retirement benefits). Earnings across almost all industries saw gains (farming being the exception).
As we’ve noted before in discussing the state revenue forecast, state economists point out that the state is regularly outperforming the nation. (More on that forecast from the Washington Research Council.)
One key to sustaining that strong economy is retaining and expanding the manufacturing sector, as Joel Kotkin writes at New Geography.
.. manufacturing remains critically important. Over the period from 1997 to 2012, labor productivity growth in manufacturing—3.3% per year—was a third higher than the rest of the economy. Clearly manufacturing is no technological laggard, accounting in 2012 for 68.9% of all R&D expenditures by U.S. businesses and employing 36% of the nation’s scientists and engineers, the largest share of any industry.
So even as employment has declined or stagnated, the impact of manufacturing on local economies remains profound.
Kotkin points out the key regional variations in the health of manufacturing, focusing on metro areas. A table in his research shows that great Seattle, known nationally as a successful tech center, also boasts a strong manufacturing core. Among large cities, Seattle ranks No. 18 in manufacturing, up from No. 34 in 2015.
For a good example of how R&D, manufacturing and higher education create positive economic synergies, see this editorial from the Seattle Times.
WASHINGTON state’s investments in higher education and the aerospace industry continue to pay great dividends.
A glamorous example is the Advanced Composite Structures Laboratory that Italian supercar manufacturer Lamborghini inaugurated in Seattle on Monday.
At the event, Gov. Jay Inslee noted that the lab grew out of University of Washington research into carbon-fiber composite materials. Those materials are now used in Boeing jetliners and Lamborghini supercars, and the companies are working together to advance the technology.
To be sure, Lamborghini definitely adds to the cool factor, in addition to the great jobs and technological innovation at the heart of this cluster. The Times points out,
Propagation of this technology is benefiting Washington in multiple ways. A joint venture of BMW and SGL Group chose to build the world’s largest carbon-fiber production facility in Moses Lake.
The cluster is also spawning new ventures, such as a composite-recycling center in Port Angeles that’s making products from carbon-fiber scraps that would otherwise go to landfills.
As the global economy holds its breath waiting for the outcome of the Brexit referendum, there are a lot of reasons to feel good about Washington’s economic prospects. Each one of those reasons is also an argument for continuing the state’s commitment to education, transportation, and smart tax and regulatory policies – our Achieve, Connect and Employ priorities.