This is the fifth year, since joining the Kitsap Economic Development Alliance in 2011, that I’ve had an opportunity to share my year-end review, and new-year perspective on Kitsap’s economy. For that, I want to thank the Kitsap Peninsula Business Journal for supporting our alliance and according me this valued annual opportunity.
As I came to Kitsap in the fall of 2011, our national economy was slowly emerging from the throes of the great recession. While pure economic data indicated the “turnaround” began in 2009, it sure didn’t feel that way to the average citizen. Fortunately, due to our dense and steady defense sector (which accounts for nearly 40 percent of our local economy) Kitsap was not as severely impacted as many other communities across the state and country. Nevertheless, we too were challenged to move our market back to “normalcy” – to higher levels of employment; more routine business investment; growing wages, increased business and household starts; reliable real estate values; and strong consumer confidence.
As we entered 2012 and I penned my first review, it still seemed, in many ways, as if we might never regain normal economic health and balance. But we did not grow discouraged nor despair, and slowly and surely things did begin to move in the right direction. Our alliance partners, public and private, rolled up their sleeves and continued to work together to support local businesses, to attract new investment, and to set the table for job growth in Kitsap. Over the past four years, and in particular the past two, we have experienced some very positive growth in our local and regional economy.
Last year in Kitsap County:
• employment levels reached an eight-year high (including employment levels at NBK Bremerton not seen in 30 years);
• wages rose;
• manufacturing output surged at many of our OEMs;
• commercial real estate investment was at a level not seen since the development of NBK-Bangor 40 years ago (private-sector real estate investment in 2015 will exceed $750 million – nearly matching capital projects currently underway at NBK instillations);
• home prices appreciated to near pre-recession values;
• business start-ups rose
• household formations grew;
• tourism enjoyed a significant rebound;
• clinical health care expanded;
• intellectual property development advanced in several sectors, led by IT;
• over $100 million in local transportation projects were approved in the state’s first transportation project in a decade; and,
• retail sales were strong, led by autos, with overall consumer confidence up.
All in all, 2015 was a very solid year as Kitsap’s economy continues to move in the right direction and grow stronger and more diverse. In addition, Kitsap continues to leverage its connectivity and proximity to the core of our regional economy – The Greater Seattle Market – one of the most robust regional metro economies in the United States. Kitsap’s economic composition, character and competitiveness positions Kitsap to continue to play a significant role in our region’s overall economy.
As for 2016 and beyond, my crystal ball is growing a bit opaque. While I sense that our local and regional economy will continue to grow and prosper in the short to medium term (as most two- to three-year indicators of economic health remain positive), there are uncertainties on the national and international front that could disrupt continued progress on the economic front.
First is political instability in the Middle East and the threat of terrorism around the globe — including here in the homeland. Second, at what rate will the Fed increase the cost of debt capital, both consumer and commercial? Third, will our domestic energy industry be able to continue to transition our country into a net exporter of energy and alternative-renewable energy technologies in the face of historic low oil prices? Fourth, will our nation and state once again prioritize the essential importance of education and workforce development in providing us with the long-range ability to compete in an ever more competitive global economy? Finally, will partisan politics in America grow even more divisive and disruptive to the pursuit and promulgation of sound fiscal policy? Or will we, the people, demand more civility, collaboration and solution-driven governance from those we elect to lead our country forward in these challenging, yet chock full of opportunity, times?
To learn more — from the real experts — join us at our 18th annual Decision Makers Economic Forecast Conference on Jan. 28 from 7-10 a.m. at Kitsap Conference Center. Click here to register now or go to http://dmb2016.bpt.me. Hope to see you there.
Happy New Year — On Kitsap!
• John Powers is executive director of the Kitsap Economic Development Alliance.