The local economy will continue to experience steady, healthy growth in 2008, according to the foremost experts on the subject. For the 20th year, Bruce Mann and Douglas Goodman, economics professors at the University of Puget Sound, delivered their Pierce County Economic Index during the annual Horizons breakfast Dec. 13. The event, organized by Tacoma/Pierce County Chamber of Commerce, was held at Greater Tacoma Convention and Trade Center.

Each year the professors have a theme for their quips during the presentation. This year they took a medical approach.

Mann compared their analysis of the economy to a biopsy on a patient. He went over national and international trends that affect Pierce County, including a weaker dollar, higher oil and energy prices and concerns in the housing market over sub-prime lending. Mann said the local economy is stable enough that such trends do not have a major negative impact. “We are more immune to local influenza bugs now,” he remarked.

“We no longer get the sugar high we used to get,” Goodman observed.

Growth in the local economy is slowing. The professors attribute this to several factors, such as less spending on goods and services from the military bases and a decrease in construction. Several major projects that were pumping money into the construction sector have been completed, such as the expansion of Lakewood Industrial Park, the golf course at Chambers Bay and the new Tacoma Narrows Bridge.

The index showed an overall growth rate of 1.9 percent for 2007. They predict an increase of 2.3 percent for 2008. “This more moderate pace is probably not bad medicine,” Goodman said.

They predict a healthy future for the technology and research sectors. As an example, Mann pointed to planning for Urban Waters, a marine research facility that will be occupied by staff from the City of Tacoma’s Environmental Services Division and University of Washington-Tacoma. “Blood is flowing into the high end of the economy,” he observed.

Goodman said Tacoma remains the central hub for the Pierce County economy, but activity in suburban areas in the county as well as Thurston and south King counties is increasing.

The labor force in Pierce County grew by 4,700 new jobs in 2007, and the professors predict 5,600 new jobs will be created next year. Mann said the size of the labor force is more than adequate to meet the demands of the economy. Recent slowdowns in hiring in the construction sector will be offset by increased commercial construction in the near future, he added.

Goodman said unemployment for 2008 will be 5.4 percent. The size of the labor force will increase faster than job creation, he noted.

The growth rate of personal income for local residents is lower than the traditional average of 3.8 percent. They predict this figure will be 2.5 percent next year. “This sluggish weight gain will continue in 20007 and into 2008,” Mann said.

Some of this is attributable to the rise of the service sector. Growth of low-wage jobs is faster than for high-wage jobs. Goodman noted that the large military population must be taken into account. Their income may be lower than that of many permanent residents, but they are compensated in other ways, such as free housing and discounted prices at stores on the bases.

Per capita income was $35,700, and they predict it will rise to $37,000 next year.

Containerized cargo was down 5.2 percent in 2007 compared to the prior year. The professors predict this will increase 4.6 percent next year, with a weak dollar spurring exports.

The 2007 holiday season will be good, but not spectacular, for local retailers, according to the index. The increase in retail sales this year will fall below, the lowest rate since 2002. Goodman noted that Lacey and Federal Way are growing competitors to the retail sector in Pierce County.

Overall, the prognosis is good. “In summary, the patient is in pretty good shape,” Goodman remarked.

The Horizons breakfast also included keynote speaker Robert Baur, managing director and global head of trading with Principal Global Investors, and a video on the local economy produced by Wonderdog Media. The event is airing on TV Tacoma. Broadcast times are 9 p.m. Dec. 20, 2 p.m. Dec. 21, 8 a.m. Dec. 22 and 8 p.m. Dec. 23.