1. South Puget Sound Forecasts
2010-2040
October 2010
www.trpc.org

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. 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

5. 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

6. 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

7. 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

8. 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.

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. Pattern of Growth
• The growth
spurt reached
its peak in 2006
• Monthly home
sales are still
very low, but
may have
bottomed

20. Pattern of Growth
• Recovery
will be slow

21. 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

22. 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

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. 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

25. 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

26. 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

27. How Reliable Are the Forecasts?
“Backcasting” is used to Predict the Past

28. How Reliable Are the Forecasts?
• The 1985
and 1989 forecasts
accurately predicted
our current
population
• But we took a
different route to
get here

29. 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

30. 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

31. 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.

32. 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

33. What the Future May Hold

34. South Puget Sound Forecasts
2010-2040