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For the first time in 12 years, 2022 saw the metrics that tracked Pierce County's economy slide in the wrong direction.

What will the data show about 2023?

Did we put in a bottom this past year?

Setting us up for further growth in 2024.

From labor to supply chains, running a business has not been easy lately.

A check up on the Pierce County and Tacoma economies is the discussion tonight on Northwest now.

Every year, the Tacoma Pierce County Chamber of Commerce releases the Pierce County Economic Index, or PCI report.

I help go through the data at the annual Horizon's breakfast with Dr. Neal Johnson, who crunches all the numbers from the previous year and then tries to read the tea leaves for the year ahead.

Up until 2022, all the trend lines were headed up for more than a decade.

But last year's report wasn't great.

With income spending and real estate all down.

Coming up next week, we get the numbers for 2023 and look ahead to 2024.

It looks like interest rates have topped out, but the effects on consumer spending, housing and jobs has yet to really hit the system.

It'll be interesting to see if we've leveled back out for a flat 2023.

The residential apartment market and Pierce County in Tacoma, for instance, has tanked, and the big plans for a resort at Chambers Bay did as well.

So finance costs, labor and inflation are taking a toll.

Meanwhile, most business and industry continues to grind.

Along here in Tacoma, Pierce with new tenants building 4 million square feet of new space, and Fredrickson, the area's designation as a hydrogen hub by the Biden administration and a continued strong employment picture.

One thing we do have in Tacoma, Pierce, is consistency.

The health care systems are steady.

So is Jbl's city and county government, manufacturing and logistics.

And as Steve Kitchens tells us now, a small company you might never have heard of Another day on the Tacoma Tidal Flats means another tour of the clean tech startup company named a Quagga.

We've had tours from folks from around the country flying in to see this, even globally, sort of getting attention, making national press and a lot of this very, very recent.

In early 2024, several Pierce County Council members got a firsthand look at the company's operations.

The backbone of the fast molecule is the carbon fluorine bond the Quagga launched in 2019, marketing its technology that destroys pee fast, a manmade compound that once was considered a forever chemical because it doesn't naturally break down in the last 3 to 4 years.

The ability to show there's other methods of dealing with this forever chemical and removing the forever part of the chemical so that's no longer going to be exists has been very exciting.

And yes, it is spurring up a whole industry around itself so that system can be run from this room.

The startup has already earned multiple awards, private investment and grants from the Environmental Protection Agency, Department of Defense, National Science Foundation and others.

I feel really lucky and privileged to be able to get up and work on something that matters and to have a purpose to my work.

Like not everybody gets that developed in the 1950s.

P Fast is everywhere.

It's found in consumer and commercial and industrial products like firefighting foam.

P Fast has been detected in environments in populations around the globe and is linked to harmful and serious health effects in humans and animals.

We've got technologies that can make a real impact on the problem, and so that's very exciting.

CEO Nigel Sharp and CTO Brian Pinker says its tech can fit into a small freight container.

Last summer, their P fast destruction unit treated 20,000 gallons of water contaminated by spent firefighting foam and Alaska's Fairbanks International Airport, the Tacoma Maritime Innovation Incubator fostered a conga inside the Center for urban Waters, allowing the company to grow.

We double.

Last year we were seven people and then we're up to 14.

I think we could double, you know, every year for the next 5 to 10 years and still be like continuing to grow after that.

The problems that big and since past contamination is a global crisis.

The cargo believes other clean tech startups may find similar success in the South Sound.

Getting rid of the problem once and for all.

People ask us, or what?

Then like, you know, you guys are gonna put yourselves out of business.

And I say like, I hope so.

Like, you know, that's what I'd love to see according to the solve the problem once or for all be done with this in Pierce County.

Steve Coogan's Northwest.

Now.

Commerce.

Joining us now, our Tacoma Pierce Chamber of Commerce CEO Andrea Rae, Betty Kappas, Danny from the Pierce County Economic Development Department and Carol Wolf with the city of Tacoma, Department of Business Services and Workforce Partnerships.

Welcome, all of you to Northwest now.

Great to have our annual discussion about the economy here in Pierce County and Tacoma.

You know, the numbers show that the economy is doing pretty well, but nationally, people don't poll that way.

They will tell you and the Biden administration has been having some problems with this, that the economy is bad.

They don't feel good about how things are going.

Folks know how their job is doing.

Maybe they talked to their boss a little bit who maybe gives them a little insight.

But that's why you folks are here to tell folks what's actually going on.

And I want to start with each one of you.

Have you answered this question?

We'll start with you, Andrea.

When you talk to people at an event that the chamber has many of, what is your perception of how small business, large business, some of the employees are feeling about their jobs, feeling about the economy, Optimistic, pessimistic.

Give us your take.

Yeah, absolutely.

Appreciate it, Tom.

Thank you.

I think that businesses are more optimistic this year than they were last year.

I like to think about when we were sitting here this time last year, we were talking about an impending recession.

It wasn't if we were going to have a recession, but we were going to have a recession.

And how bad is it going to be?

Skyrocketing inflation.

And I think that when we're talking to consumers and we're looking at that polling data for, you know, how positive people are feeling about the economy, it's because those inflationary prices are real.

Right.

You know, you are looking at 25% more for your groceries when you're on the line at the grocery store, at the gas pump.

You know, these these inflationary pressures are real for consumers and also for businesses.

And so trying to manage and work through that.

But then you look at consumer spending and, you know, consumer behavior, and we're buying more new cars than ever before.

So it's this interesting paradox where there is a sentiment and a feeling of maybe not being as positive.

And then you look at the behavior, and the behavior actually is continuing to support how strong the economy is.

So I think that when we're talking to businesses, absolutely inflationary pressures, you know, workforce considerations, you know, these are all still things that are impacting businesses.

But from this time last year, people are more optimistic.

That's true.

A lot of people tell you the economy's terrible while you're talking about the airport going to Cancun, right?

Yeah, that's right.

It's a lot of truth to that.

Betty, what's your take?

You talk to a lot of the same circles, but also just for different ones as well in the county.

What are folks telling you?

Where are they on this whole positive negative thing going forward in the county?

Sure.

And I really tapping into everything, Andrea said.

I think they're optimistic.

And probably if you look back over any time period, you'll see cycles of things going on.

And I think you always need to pay attention to headlines.

But I think businesses are figuring out how to be more resilient and they figure that out through the pandemic of how to pivot and how to see opportunities we're seeing in the coming year.

Hopefully interest rates are coming down.

That's an opportunity.

We're seeing some Labor slowing, but that may be an opportunity if jobs can't be filled.

We're seeing some of the inflationary pressures come down.

So there could be lots of things there.

We're seeing the supply chain has been ironed out, which is why people probably were able to buy cars that they couldn't buy before.

So I think there's tons of optimistic outlook.

Also, I think there's a lot of entrepreneurship and we're really seeing that in Pierce County.

We can talk about that later, but that's been a a true focus that when you grow a lot of those small businesses, it's bringing in a lot of big businesses to the county.

So I think there's tons of optimism in Pierce County as so feel free to break some news to if anybody is knocking on our door.

you might.

We might tell you a little.

Okay.

So the big bosses know first, right?

Yeah.

Same question to you, Carol.

From the city's perspective there, there have been some things that have fallen through because of financing and whatnot, particularly in residential and multifamily and things, because financing is always tough on that.

But generally speaking, how do you what's when you take the temperature of small business people living in the city, what are they telling you?

How are you feeling about it?

Well, thank you for that question.

Tom and I really like seeing that.

When you told us you were going to ask us that and building on both what Andrea and what Betty have said, what we're finding are people are really excited about the opportunities that exist in this post kind of pandemic reality with the hybrid work schedules taking advantage of the fact that people are wanting to work and live closer to where they want to shop and they're working from home and they want to just go out their door.

So we have a lot of businesses that are taking advantage of that, that hybrid work schedule.

There are also some of the investments the county and others, including the city, have made in technical assistance during the pandemic.

People have experienced business growth from that an opportunity.

So now they're looking for us and they're looking for ways to get into brick and mortar locations.

And they're finding them.

They're just they're really excited.

And in some of our business districts like Proctor, we have business and retailers telling us their business is up 20%.

Okay.

And 2023 over 2022.

So we're not seeing really any type of negative feelings going into 24.

Actually, a lot of enthusiasm.

Yeah, that's entrepreneurial.

Entrepreneurial excitement.

Yeah.

Is it fair to say that the advent of remote work and anybody can answer this and maybe, Andrew, you brought it.

I mean, Carol, you brought it up.

So maybe you start is could remote work actually help Pierce County where that is 67 evacuation maybe doesn't happen as much anymore.

The other jobs are up there, but at least they're down here going out the front door in the Proctor district to get a bite or whatever it may be.

Am I making that up or is that possible?

You are not making that up in what we're seeing.

Again, it's all about choices, right?

So as as we're investing in transportation options and people can get to their work locations in Seattle and other counties and in Tacoma quicker, that's always a win.

But what we're finding in all of our neighborhood business districts and Tacoma has 15, What we're finding is they're getting the density of housing.

The fact that there's hybrid work schedules in there are all types of new businesses opening up, and they're doing market capture in different ways.

Some of our businesses, they're maintaining their other business changes to restaurants.

They're seeding models that service people who are walking up and down the street as opposed to coming in.

Right for long term.

Once they're taking a quick break from work, we're seeing that type of experience with our restaurants, the link light rail.

People are going up and down between business districts and they are really thriving now and businesses up and who may and who may be remote workers, remote workers, and the investments in infrastructure and housing is making our business districts and the central business district downtown, they're really they're starting to have more feet on the street and businesses are benefiting.

And better connectivity is a big one for that.

Pierce County has been working a lot with the whole broadband Internet.

Thing is this idea that I have that maybe we don't all run up north on that 167 and stay here to work.

Is that reality?

Well, we're we're hoping it could get more a reality.

And actually we're seeing not just with hybrid, but I think we're also seeing businesses are choosing to relocate to Pierce County because that's where the talent lives.

Go ahead.

So so so so those things are happening and decisions are being made on that circle of information there.

I also think there's some people I mean, you're never going to move Sea-Tac Airport.

We have a lot of our Pierce County employees that work at C Tech Airport.

Okay.

So some of that will be a natural movement up high five, 416, seven.

But we're also seeing the infrastructure pieces I think Andrea is going to highlight that will help us with mobility, which I think is a key piece of the equation because no one wants to sit in the car for a long period of time and we want our talent working and productive.

And I think hybrid models are here to stay and it's all different.

It just depends on your company.

I actually have probably one of the few departments in the county that we're not hybrid, never have been, probably won't be, but most of the county is.

And so I think it just depends on what your work is and how that that you need that synergy and collaboration.

And we have your field to pick up on that.

Yeah, no, I mean, I think that I appreciate what Carol and Betty have said and absolutely we're seeing that with our with our businesses as they adapt to, you know, what is that hybrid?

What is that remote work structure?

And it depends on the business and it depends on the industry.

Right?

There are some businesses like in our manufacturing industrial sector, you know, those are not remote jobs.

And so when we're talking about how are we investing in those lowest barrier, highest earning potential jobs, a lot of those jobs are here in Pierce County, and they are not open to hybrid or remote work.

But some of those jobs are.

And what we're seeing is people moving to Pierce County because we have the amenities here that people crave that high quality of life.

And then to Betty's point, we are seeing businesses more interested and then also relocating or setting up hubs and office spaces because they're looking at the data and they're saying, look, 70% of our workforce is already here.

We know that the quality of life is impacted when you have to commute more than 30 minutes to a job.

It's not just, you know, impacts on the environment, but it's impacts on productivity, it's impacts on employee morale.

And so we're seeing more businesses relocate here because this is where the the workforce is.

PCI, the Pierce County Economic Index report is something that's featured every year on the horizon, this breakfast that's coming up next week.

So, Andrea, I want you to talk about the event.

How do people get involved?

Because I always forget that piece.

Go ahead and plug it.

And then you mention to one of the interesting things you found in that report excuse me was about employment.

So tell us a little bit about the event and then hit the employment piece, if you would.

Yeah, absolutely.

So it's January 31st.

It is our 13th year.

It is critical for us as a chamber and along with our partners in economic development to present real data and hyperlocal data to our businesses so they can make those most informed decisions.

Businesses thrive and predictability and certainty, and we have not had a lot of predictability and certainty in our world.

And so anything and everything we can do to give more information on is as key.

And so that is the expectation for the event.

It's a breakfast event at the Tacoma Convention Center.

More information on our website Comment Chamber dot org We are selling out.

So I would just encourage people, if you're interested in coming, please do get tickets now.

But again, that's that's where we'll highlight a lot of that information.

Information will then be available and shared.

And yes, unemployment and employment is key.

So when we were here last year we were talking about it is a workers market.

You know, when are people going to return to work?

You know, how are we going to see that?

And so what we started to see is that stabilization in the workforce.

And so more people are coming back to work.

And now what we're forecasting in 2024 is the jobs numbers holding a little bit more steady or maybe even unemployment going up slightly, which might help job hopping and some of those other.

Right.

And that's what happened.

Right.

So the job numbers are going to hold steady, but we're going to have more people interested in coming back.

Okay.

Worse.

And so that will most likely drive up unemployment slightly, which will again continue to aid that that stabilization in the workforce.

We're seeing a lot of as we as we talked a little bit about before workforce as a consideration with businesses.

And so we do still need more people, you know, to come to work it to continue to grow our businesses.

And we're seeing skills based hiring as a tactic that is really helping our businesses continue to grow and expand, even in a less than stable, you know, workforce market.

But we are forecasting more stable.

If you talk to people here at Base Technical College or Licensee and they'll tell you a lot of their folks are hired before they.

absolutely.

Six months before the graduates.

Absolutely.

Andrea previewed the unemployment piece a little bit with me, Betty, when you and I talked before the show, you talked about the Biden administration's selection of Pierce County as a hydrogen hub.

Tell folks who probably haven't heard that why that's important.

And then also to piggyback onto that employment theme, do we have the people here to support it and do it?

Sure.

That's a great question.

Everyone always wonders what is hydrogen and what's it look like?

There's all different colors of hydrogen.

But but really, the thing I think stands out most to me is it's supposed to have 30 million jobs and this industry alone by 2050, and that's a 2.5 annual trillion dollar industry.

Okay.

That makes you say, hey, how can we have 1% but 2% of it?

What do we need of that?

We know that currently there is a facility looking at going into Fredrickson and their other facilities, looking at other places in Pierce County.

The thing about the hydrogen hubs, it takes a while to get them up and going.

They need a lot of the infrastructure pieces, which you just can't get off the shelf and it's a little harder, which gives us opportunities to upskill and reskill.

Yeah, of which both the city and the county have had upscale reskill programs with workforce central.

But a lot of the and when I looked at some of the jobs, I mean, we're already training for these kinds of jobs.

I mean it's like that renewable energy, chemical engineering process optimization, data analytics, plant operation.

Right.

And even the physical the physical labor needed to put together the machining, all of the welding, those kind of components.

So it could be a real natural synergy.

But there's going to be it's going to be growing and there'll be lots of pieces from there.

And I took a trip last year actually on the port with a mission looking at hydrogen because we use way ahead of us on this piece and I mean I when a car truck that that's a hybrid but it uses just just the gas to go up and down you know up the hill and the cars that were all hydrogen.

So it's going to be an interesting transformation of our economy.

But also I think we have the talent to be able to capture those kinds of jobs.

Speaking of talent, labor, we talked about that, Carol, to you.

Workforce development.

We talk about it all the time.

It's a constant theme here, particularly in Pierce County.

City has lots of partnerships with, you know, LEAP and JBL EM and apprenticeships.

Talk a little bit about those partnerships what the how the how the city's involved and stimulating that and and working with workforce in conjunction with your partners.

thank you.

So what's the role the city plays is really that partnership, development, collaboration and then investing in where we can maybe help convene the partners together.

An example we recently applied for and received a $500,000 grant from the EPA to train folks with our partners at Clover Park and also with goodwill and training folks to do just that type of work that just Betty.

And then also, Andrew, you've been talking about this in demand.

So we go out and we've are investing in that.

We're excited.

That's getting kicked off this year.

Other things that we really we find that we do is working with the school district.

This is kind of a long game, right?

Starting to work with our school district to get the farm to youth.

Yeah, I mean, it's like this is a long game.

Getting youth interested in these, like these sectors that these folks here recognize today already have gaps in workforce availability.

So working with them through jobs two five, three, the Maritime Skill Center, which is just a wonderful partnership, which is regional, not just the city of Tacoma, to bring a youth and adult in and then getting real, you know, earn to learn models and certifications that they can use today to get out in these job sectors.

Those are big for us.

And then the other one that I think that we invest time in is building relationships with the trades with our unionized and our non-unionized partners so that they can actually scale up to we can have more local apprenticeships on our our federally and city and locally excuse me, city funded projects, because that's what we can do is incentivize them to have more apprenticeship and local hires on city funded projects with folks who maybe stay here that are going to stay here.

The money stays cycled in here.

So that's a lot where the city gets into the workforce development game.

Our last 4 minutes here, I want to give you each a crack at this one, too, which is very 30,000 feet.

What matters in 2024?

Andrea, you've been promoting the completion of the Gateway Project 167.

What are the chamber's big priorities here this year?

Yeah, absolutely.

I think it's advocacy, right?

And so when we're talking about maintaining a strong, equitable economic ecosystem, it's about supporting policies that will continue to create more housing.

We talked about education, workforce development, we've talked about business attraction.

36% of our businesses cite housing as a major issue to attract and retain workers.

So we need to continue to advocate for smart policies that encourage more housing development and encourage more people to stay as housing providers instead of making that more challenging.

And we're seeing some threats to that.

So again, advocacy, housing, we mentioned transportation infrastructure, right?

You know, time is money.

We don't have time for our businesses and our workers to be, you know, stuck on I-5 or 164 freight.

Right.

That's exac.

That's exactly it.

We need to make sure that, you know, again, Washington state is a trade driven state.

We need to move people and goods throughout the port and throughout Pierce County.

It's crime and public safety continues to be the top quality of life stuff.

It is.

It's that quality quality of life.

So I would say it's housing, it's transportation, it's education workforce, it's crime and public safety.

Betsy, what were the winds in 2023?

What are you looking for in 2024?

And what's exciting that's on the horizon?

This is your chance.

Well, I'll go maybe the next layer down from Andrew on that.

So a huge win that actually we did in partnership with the chamber is we've launched 339 businesses through the Pierce County Business Accelerator.

And they have they have raised to date over $6.1 million of new capital.

So we're seeing businesses starting doing capital investment.

We've seen through opportunity grants, another 159 businesses have raised about 4 million, 5 million of new capital.

So so we're seeing reinvestment there.

So that's a big piece.

We're also seeing, as you know, in the Fredrickson area, a lots of wins.

So some of those wins and maybe where you highlighted, I believe in 2020, LPC had just come into the marketplace, had purchased a number, the last chunk of acreage at that time that was available in Fredrickson and they were building long term holds back and they are 100% leased.

I believe that was about 3.5 million square feet.

And some of the companies coming in, it's pretty impressive.

So I think that's the piece that we're seeing.

We still have a currently in the pipeline 3.1 million square feet that that will be coming online.

And some of those companies include Old Castle Headquarters, Amazon grocery flow into core O'Hare Harbor Freight.

We're seeing in permits that actually well, some of the permits had dipped this last year.

We're seeing ahead of time lots already.

We had 1300 lots.

So that's in the pipeline for housing.

And the other thing that we've seen that maybe is a little people don't pay as much attention, but the parkland span away area over the last number of years, they've had 7 million square feet in the last five years of a commercial investment.

So that's those are big indicators.

So that's like you say, we're so busy, we forget to go back and look at it.

Carol, last hit for you.

What's what's top priority for the city?

Top priority for the city green economy strategy?

City invested in that.

There's a lot of opportunities for job creation and growing our already established businesses while recruiting some new ones.

I want to say continuing to leverage the work of the chamber with the business climate and some of their great partners to deliver technical assistance that matters.

And with the county, we want to continue to.

Some of the accelerator programs provide our low access to capital, some of them to actually implement some of the initial start up and Old City Hall centers, cross Old City Hall.

That was the last ones on the in 2024, you're going to see the office and retail components completed and that's going to help round out that southern portion of the central business district.

That's going to be cool.

And then we're going to move into the next phase.

Great conversation.

I told you 20 minutes ago, fast.

Yes.

So thanks so much, everybody.

A lot of economists are hoping we achieve something that is typically almost impossible, a soft landing.

The bottom line government made a mistake with too much cheap money for too long, creating an inflation bomb.

But all of our fingers are crossed that maybe this time the cure will be a gentle one.

Over time, a reduction in inflation without the pain of a recession.

We'll see.

I hope this program got you thinking.

It's okay to watch this program again or to share it with others.

Northwest now could be found on the web at KBTC dot org.

And be sure to follow us on Facebook and Twitter at Northwest Now a streamable podcast of this program is available under the Northwest.

Now tab at kbtc dot org and on Apple Podcasts and Spotify.

That's going to do it for this edition of Northwest Dow.

Until next time.

I'm Tom Larson and thanks for watching.