South Puget Sound Forecasts
2010-2040
October 2010
www.trpc.org
South Puget Sound Forecasts
Where are we today? Where are we going?
• How forecasting is done
• Our changing economic base...
How Forecasting is Done
• Population growth/decline
comes from
– Births
– Deaths
– In-migration
– Out-migration
• Birth ra...
Our Changing Economic Base
• If Thurston County
were a nation, its
GDP (in 2007)
would be $8.3
Billion
• It would be about...
Our Changing Economic Base
• State govt
employment
growth slowed
after Initiative
601
• A recession also
slowed the state
...
Our Changing Economic Base
• State government
employment also
drops during
recessions
• It will grow very
slowly when the
...
Our Changing Economic Base
• Government has the
most jobs, but its
share is falling …
faster private sector
growth brings
...
Our Changing Economic Base
• Thurston County
is increasingly
integrating into
the Puget Sound
economy
• Over ONE
MILLION p...
Our Changing Economic Base
• Thurston
County is NOT
YET a
“bedroom
community”
• But outbound
commuting is
growing…
• And w...
Our Changing Economic Base
• Workers
commute both
into and out of
Thurston
County
• Many more
commute out
than in
• Outbou...
Our Changing Economic Base
• Outbound
commuters bring
home their
paychecks
• Inbound
commuters take
them out
• The net inf...
Our Changing Economic Base
• Think of
outbound
commuters like
an industry
• They bring more
earnings into the
local econom...
Our Changing Economic Base
• Most outbound
commuters go to
Pierce County
(2006-08 est.
19,000)
• King County is next
(est....
Our Changing Economic Base
• Inbound commuters
come from many
surrounding counties
• The largest share
come from Pierce
(2...
Our Changing Population
• We grow all the
time, but
sometimes fast
and sometimes
slow
• Growth spurts
come and go
0
50
100...
Our Changing Population
• We grow all the
time, but
sometimes fast
and sometimes
slow
• Growth spurts
come and go
150,000
...
Pattern of Growth
• In 2006, the
recent growth
spurt was under
way.
• Historic patterns
suggested it
could last a few
year...
Pattern of Growth
• The growth
spurt reached
its peak in 2006
• Monthly home
sales are still
very low, but
may have
bottom...
Pattern of Growth
• Recovery
will be slow
Pattern of Growth
• For the first
time since
the early
‘80s,
Thurston
employment
is dropping
• OFC projects
state-wide
emp...
Pattern of Growth
• Our growth
comes from
in-migration
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
0%
1...
Pattern of Growth
• NOW, what are
the prospects
for the
immediate
future?
• A sharp drop in
rate of growth,
like in the ea...
Pattern of Growth
• NOW, what are
the prospects
for the
immediate
future?
• A sharp drop in
rate of growth,
like in the ea...
What is the Long-Term Forecast?
• The February
2010 forecast
reflects the
impact of the
Great Recession
• It is lower than...
What is the Long-Term Forecast?
• PSRC forecasts
moderate long-
term growth for
Pierce
• TRPC forecasts a
return of rapid
...
How Reliable Are the Forecasts?
“Backcasting” is used to Predict the Past
How Reliable Are the Forecasts?
• The 1985
and 1989 forecasts
accurately predicted
our current
population
• But we took a
...
How Reliable Are the Forecasts?
• The forecasts in
– 1992
– 1996
– and 1999
did not foresee the
2001 recession
• But we ar...
How Reliable Are the Forecasts?
• Every new forecast
is like a course
correction
• Long-range models
cannot predict the
ti...
What happens if growth differs from
the forecast?
• Each agency updates their county-level forecast
every 3-5 years.
• We ...
Major Points to Remember
• Growth is Cyclical – “This too shall pass.”
• Population growth mainly comes from job
growth – ...
What the Future May Hold
South Puget Sound Forecasts
2010-2040
South sound science symposium   swensson forecast oct 2010
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South sound science symposium swensson forecast oct 2010

  1. 1. South Puget Sound Forecasts 2010-2040 October 2010 www.trpc.org
  2. 2. South Puget Sound Forecasts Where are we today? Where are we going? • How forecasting is done • Our changing economic base • Pattern of Growth • Long-Term Forecast
  3. 3. How Forecasting is Done • Population growth/decline comes from – Births – Deaths – In-migration – Out-migration • Birth rates and death rates change slowly • Migration is highly variable
  4. 4. Our Changing Economic Base • If Thurston County were a nation, its GDP (in 2007) would be $8.3 Billion • It would be about the same as Mozambique • Thurston’s GDP would be about twice the GDP of Guinea • And we’re gaining on Cambodia
  5. 5. Our Changing Economic Base • State govt employment growth slowed after Initiative 601 • A recession also slowed the state economy • Annual growth: 1982-92: 4.8% 1992-2007: 1.1% • State govt jobs lag WA trends by one year State Govt WA Empl
  6. 6. Our Changing Economic Base • State government employment also drops during recessions • It will grow very slowly when the state-wide economy recovers • It will continue to lag state-wide trends State Govt WA Empl
  7. 7. Our Changing Economic Base • Government has the most jobs, but its share is falling … faster private sector growth brings diversification • Government share: 40% in 1970 28% in 2007 • Our model projects more diversification: government share down to 27% by 2030.
  8. 8. Our Changing Economic Base • Thurston County is increasingly integrating into the Puget Sound economy • Over ONE MILLION people live within 30 miles of Olympia • Likewise, there are over ½ MILLION jobs within 30 miles
  9. 9. Our Changing Economic Base • Thurston County is NOT YET a “bedroom community” • But outbound commuting is growing… • And will grow a lot more 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1960 1970 1980 1990 2000 2010 2020 2030 PercentofWorkers Thurston Outbound Civilian Commuters
  10. 10. Our Changing Economic Base • Workers commute both into and out of Thurston County • Many more commute out than in • Outbound commuting is growing faster than inbound Outbound Inbound Net Out
  11. 11. Our Changing Economic Base • Outbound commuters bring home their paychecks • Inbound commuters take them out • The net inflow is over a BILLION dollars • Those paychecks bring spin-offs to the local economy Inflow
  12. 12. Our Changing Economic Base • Think of outbound commuters like an industry • They bring more earnings into the local economy than State Government $0 $500 $1,000 $1,500 $2,000 $2,500 1985 1990 1995 2000 2005 Millions Value of Paychecks (in 2007 $) State Govt Paychecks Inbound Paychecks
  13. 13. Our Changing Economic Base • Most outbound commuters go to Pierce County (2006-08 est. 19,000) • King County is next (est. 5,100) • Lewis is third (est. 2,800) Destination of Outbound Commuters - 2000
  14. 14. Our Changing Economic Base • Inbound commuters come from many surrounding counties • The largest share come from Pierce (2006-08 est. 6,700) • Commuters from Pierce and King combined (est. 8,700) ≈ Commuters from Mason, Grays Harbor, and Lewis combined (est. 8,900) Origin of Inbound Commuters - 2000
  15. 15. Our Changing Population • We grow all the time, but sometimes fast and sometimes slow • Growth spurts come and go 0 50 100 150 200 250 300 1970 1975 1980 1985 1990 1995 2000 2005 2010 Thousands Thurston Population 1970-2010
  16. 16. Our Changing Population • We grow all the time, but sometimes fast and sometimes slow • Growth spurts come and go 150,000 175,000 200,000 225,000 250,000 275,000 1990 92 94 96 98 2000 02 04 06 08 10 Detail: 1990-2010
  17. 17. Pattern of Growth • In 2006, the recent growth spurt was under way. • Historic patterns suggested it could last a few years. • Once pent-up demand was met, the growth rate would taper off slowly. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Annual Population Growth Three-year Rolling Averages, 1970-2005
  18. 18. Pattern of Growth • The growth spurt reached its peak in 2006 • Monthly home sales are still very low, but may have bottomed
  19. 19. Pattern of Growth • Recovery will be slow
  20. 20. Pattern of Growth • For the first time since the early ‘80s, Thurston employment is dropping • OFC projects state-wide employment to bottom out this fall
  21. 21. Pattern of Growth • Our growth comes from in-migration 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1970 1975 1980 1985 1990 1995 2000 2005 Growth vs MigrationShare Migr % Pop Growth
  22. 22. Pattern of Growth • NOW, what are the prospects for the immediate future? • A sharp drop in rate of growth, like in the early ‘80s 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Annual Population Growth Three-year Rolling Averages, 1970-2005
  23. 23. Pattern of Growth • NOW, what are the prospects for the immediate future? • A sharp drop in rate of growth, like in the early ‘80s 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Annual Population Growth Three-year Rolling Averages, 1970-2005
  24. 24. What is the Long-Term Forecast? • The February 2010 forecast reflects the impact of the Great Recession • It is lower than the last forecast for most of the time horizon • It is still within the OFM range • It extends to 2040 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Comparison of Forecasts OFM 2007 vs TRPC 2004 and 2010 OFM Range 2004 2010 Actual
  25. 25. What is the Long-Term Forecast? • PSRC forecasts moderate long- term growth for Pierce • TRPC forecasts a return of rapid long-term growth for Thurston • OFM forecasts a return of rapid long-term growth for Mason
  26. 26. How Reliable Are the Forecasts? “Backcasting” is used to Predict the Past
  27. 27. How Reliable Are the Forecasts? • The 1985 and 1989 forecasts accurately predicted our current population • But we took a different route to get here
  28. 28. How Reliable Are the Forecasts? • The forecasts in – 1992 – 1996 – and 1999 did not foresee the 2001 recession • But we are precisely at the 1992 forecast • And growth is likely to be close to the forecasts over time
  29. 29. How Reliable Are the Forecasts? • Every new forecast is like a course correction • Long-range models cannot predict the timing of recessions or recoveries • But they are reliable in predicting major trends • And they can examine “what-if” scenarios
  30. 30. What happens if growth differs from the forecast? • Each agency updates their county-level forecast every 3-5 years. • We monitor growth trends annually. • Growth spurts and recessions are built into the models. • We allow for periods of high growth, and periods of low growth - and try to forecast the average over five year intervals.
  31. 31. Major Points to Remember • Growth is Cyclical – “This too shall pass.” • Population growth mainly comes from job growth – either locally, or in nearby counties • The economic role of commuters is huge • Long range forecasting is reliable for planning purposes
  32. 32. What the Future May Hold
  33. 33. South Puget Sound Forecasts 2010-2040
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