The 45th Annual Economic Forecast Conference identified housing and transportation as key issues in 2017
Hundreds of regional business leaders convened in the grand ballroom at the Westin Hotel in downtown Seattle on Jan. 12 for the 45th Annual Economic Forecast Conference hosted by the Economic Development Council of Seattle & King County to hear from experts and analysts as to their thoughts on global, national, and local economic predictions for 2017.
Billed as the largest economic forecasting event in the Pacific Northwest, this year’s sold-out conference included presentations by King County Executive Dow Constantine and Washington State Governor Jay Inslee, a keynote panel discussion on what Seattle could learn from the Bay Area’s tech boom, and a variety of panel discussions that ranged in topics from innovative transportation solutions to economic diversity to clean technology.
Here are some observations from this year’s conference:
It’s well-known that the local housing market has been hot for years, but Zillow senior economist Skylar Olsen provided data that show the upsides and downsides of a booming real estate environment:
- Seattle homeowners can expect to see the value of their homes increase 5.4 percent in 2017, while the national average is expected to increase 3.2 percent, according to Olsen.
- Good, high-paying tech jobs draw newcomers to the region at a rate that outpaces the number of homes either available or under construction.
- The climate for home buyers is very competitive. It’s not uncommon for prospective buyers to make multiple bids on homes before an offer is finally accepted. And it’s such a seller’s market that nobody wants to be a buyer, said Olsen.
- Renters whose income levels comprise the bottom third of local income earners are spending 50.7 percent of their incomes on rent, while income earners in the middle third bracket are spending 30.2 percent of their incomes on rent, and income earners in the top tier bracket are spending 15.2 percent of their incomes on rent, according to Olsen. Nationally, the average renter is spending 29 percent of their income on rent. “Expect rental affordability to be a huge problem,” he said.
A panel discussion that included Sound Transit CEO Peter Rogoff, Kenworth-PACCAR product planning director Stephan Olsen, and ReachNow CEO Steve Banfield focused on how to move people and products more efficiently through an increasingly congested region:
- Rogoff noted the reason traffic and commute times have become a popular topic of discussion around water coolers is because traffic has become considerably worse over a very short period. “We have to worry about being at risk of becoming the new poster child of congestion,” said Rogoff. “At what point does congestion overcome the economic promise of the region?”
- Panel moderator Ming Laven asked if ReachNow, the private car-sharing company owned by BMW, and Sound Transit, the regional mass transit agency, were competitors. “We’re not competitors,” said Banfield, who noted 40 percent of ReachNow customers also use public transportation. “We see ourselves as feeders into what Sound Transit is doing.”
- Olsen said Kenworth-PACCAR is looking at technological advancements such as alternative fuels, hybrid technology, and adaptive cruise control that would help truck drivers improve efficiencies. He doesn’t envision autonomous trucks, but he does envision developing new technologies that relieve drivers of some tasks and make operations safer. “We need to continue to evolve to get the most out of our trucks,” said Olsen.
Karin Kimbrough, head of investment strategy at Bank of America, said U.S. and China would continue to be major global economic players. “The outlook for the rest of the world is increasingly influenced by what happens in the U.S. and China,” she said. “Those are your two engines of growth in the global economy.” Kimbrough provided the following Gross Domestic Product (GDP) growth projections:
- Global — 3.5% (2017) and 3.8% (2018)
- China — 6.6% (2017) and 6.6% (2018)
- USA — 2% (2017) and 2.5% (2018)
- European Area — 1.4% (2017) and 1.5% (2018)
- Japan — 1.5% (2017) and 1.2% (2018)
- Emerging Markets — 4.6% (2017) and 5% (2018)
Kimbrough also forecasted a barrel of oil would cost $60 on average in 2017.
Seattle was the focus of most of the conference, but there were a few shout outs for Bellevue and the Eastside. Community Attributes Inc. president and CEO Chris Mefford and Madrona Venture Group managing director Matt McIlwain raved about the Global Information Exchange (GIX) opening in September in Bellevue’s Spring District, with Mefford describing it as “one of the most interesting things going on” in the region. And GIX representatives greeted visitors and answered questions at a booth in the conference’s Innovation Showcase hall.
More information about the 45th Annual Economic Forecast Conference is available online.