Seattle's economic recovery slowed by housing market
While Portland and Boise are enjoying strong rebounds from recessionary lows, Seattle's recovery ranks near the middle among 100 U.S. cities.
Seattle Times business reporter
Despite above-average growth in both employment and output, economic recovery in the Seattle area has been hampered by the weak housing market, according to a new report from the Brookings Institution.
Seattle's slow recovery from the 2007-09 recession places it in the middle of the pack among the nation's 100 largest metropolitan areas, according to the Brookings analysis. The full report is to be released Wednesday.
Based on a composite measure incorporating each metro area's economic output, payroll employment and house prices, the Washington, D.C.-based think tank divided the 100 largest metro areas into five equal groups. Seattle fell into the "middle 20" group, while Portland and Boise ranked among the 20 strongest recoveries.
Data compiled by Brookings show that employment in the Seattle area grew 2.89 percent between the first quarter of 2010, when local job losses bottomed out, and the end of 2011. That compares with 1.6 percent job growth for the nation as a whole over that period.
Seattle ranked 26th among the 100 urban areas studied in terms of job growth since the trough.
And the region's total output of goods and services, as measured by gross metropolitan product (GMP), rose 6.75 percent between the production trough in the third quarter of 2009 and the end of last year. That was ahead of the national average, 6.56 percent, and good enough for 34th place.
But the Seattle area's frail housing market — the S&P/Case-Shiller house-price index fell in January for the sixth straight month, hitting a new post-bubble low — remains the biggest drag on the local economy.
Seattle ranked 81st in terms of house-price change, according to the Brookings report — in the same range as Bakersfield and Modesto, Calif., Chicago and Nashville. Boise, by contrast, experienced the nation's strongest growth in house prices, and Portland ranked 27th.
However, the Brookings analysis (which used an index of house prices produced by the Federal Housing Finance Agency, not the Case-Shiller numbers) only runs through the end of 2011, and subsequent events may darken the picture it paints.
One of the brightest spots for the Seattle area has been manufacturing employment, powered by a surging aerospace sector. Manufacturing jobs grew 8.7 percent between the beginning of 2010 and the end of 2011, the eighth-strongest growth among the 100 metro areas studied.
However, layoffs among state and local government workers have hindered recovery, according to Brookings. State employment in the Seattle area at the end of 2011 was 3.8 percent below the overall jobs peak in the third quarter of 2008, and local-government employment was down 2.4 percent; that placed the metro area 64th and 56th, respectively.
Drew DeSilver: 206-464-3145 or email@example.com