Regional Report: Good news, bad news – King County’s C-minus economy

First published Nov. 9, 2008

As we discussed last week, King County is one of the strongest links in the Washington state economy – perhaps even the nation. That doesn’t mean that things are booming.

The best news comes from the September state jobs report, which shows how much King County’s key industries have grown over the past year. Software companies have added 4,700 workers – growth of better than 10 percent. Aerospace companies added another 700, which represents a slowdown, but is still growth. And the professional services sector – lawyers, accountants and computer techs – also has shown very strong growth of 8.9 percent, representing 8,300 new jobs.

Pay in these sectors is high: Software employees, for example, are the state’s best-paid, making an average $96,000 a year, which was up 11.8 percent. We’re adding significant numbers of people at those wage levels, and that’s driving the local economy. Overall, King County added 36,900 jobs between September ‘07 and September ‘08, a healthy 3.1 percent growth rate.

That’s the good news. The bad news comes from the state’s taxable retail sales figures. Overall, total sales activity fell 1.4 percent in King County in the most-recent quarter – a fact that has statewide ramifications, given that roughly 40 percent of all sales taxes are collected in King County. Residents in some of east King County’s toniest software-dominated communities put the clamps on their spending during the second quarter. Sales tax collections were down 13.5 percent in Issaquah and 11.3 percent in Kirkland; Bellevue’s total was down 5.6 percent. (Seattle itself showed a 3.3 percent gain.)

Amid all this, the housing market is holding on. You probably heard that Smart Money magazine and the Urban Land Institute both rated Seattle’s real estate market the best in the nation. But the ULI gave Seattle a 6.15 score out of 9, which is basically a C-minus. Several built-on-spec buildings are coming online in Seattle with no tenants; that, combined with the pullback at Starbucks and demise of WaMu’s headquarters, will not be good for the commercial real estate market. But our most-recent statewide housing data shows that both home prices and housing starts are sliding, not collapsing. Home prices countywide slipped about 4.3 percent (to $450,000), while starts were down 5.3 percent. Construction employment actually inched up 1.4 percent (or 1,100 jobs). (I’ll talk more about this Tuesday on KCTS-TV’s “About The Money.” It starts at 7:30 p.m.)

Looking ahead, King County’s third-quarter numbers will be weak and the fourth-quarter might be worse. We saw some of that last week, when the Northwest Multiple Listing Service reported the median King County home price fell below $400,000 in October. No surprise – with the credit market freeze and the Boeing strike, it took a brave soul (with a good credit rating) to consider buying a house, and most of us are cutting spending.

King County will have to absorb the Weyerhaeuser and Alaska Airlines layoffs in the months ahead. Local government employment also will be down. But with Boeing’s Machinists back at work and the software industry holding steady, King County has two strong pillars supporting its economy. With the ramp-up on the Alaskan Way Viaduct and SR 520 bridge – and the Sound Transit expansion – we should see gains in construction. King County won’t be booming in 2009, not with the global economy in the tank, but things could be an awful lot worse.

State of the State: Last four years were good, but the next four will be a challenge

First published Nov. 3, 2008

Tomorrow’s Election Day, so we’ll ask Ronald Reagan’s time-honored question: are Washington residents better off today than we were four years ago? If you’re in King County, the answer is a qualified yes.

The number of people working in King County has increased by 103,370, which is growth of almost 11 percent. As we’ve discussed before, King County has been one of the national leaders in job creation in recent years.

More people means more shoppers. King County retail activity has grown by more than 28 percent since 2004, from $9 billion to $11.3 billion.

If you owned your home in 2004, you’ve done well. The typical 3-bedroom, 2-bath home is now worth about 40 percent more. (Median prices have climbed from $322,000 to $450,000.) Perhaps even more reassuringly, that home’s value has slipped only 4.3 percent from the peak of the market in spring 2007, at a time when many parts of the country are seeing much greater declines. California home values, for example have fallen about 16 percent during the past year.

The one place King County doesn’t stack up is pay. State wage data shows the average King County paycheck is up 14.8 percent since 2004, to $1,080 a week. That’s nice, but it wasn’t enough to keep up with inflation – the Consumer Price Index rose 16.7 percent during the same period.

The state overall has done pretty OK too, since 2004.

• Home values are up 30 percent to a median of $291,900 in the second quarter.
• Statewide retail sales are up about 27 percent, to $29.1 billion in the second quarter.
• Total employment (farm and non-farm) is up 9.4 percent, to 3.3 million people in September.
• Average pay for workers statewide is up 18.6 percent, to $899 a week in the first quarter.

All in all, not so bad, eh? But now let’s ask the question Barack Obama’s been hammering away at – how are we going to be four years from now?

My crystal ball doesn’t see that far out (probably because it’s socked in here today and raining). But clearly, the next four quarters are going to be tough. Two of our major economic indicators – home prices and retail sales – declined statewide in the most-recent quarter. We’re continuing to create jobs, but at a slow pace, and some areas are in decline. Average wages are increasing, but not keeping up with inflation. And the credit crisis is hitting some industry sectors – forest products, construction, banking, auto sales and boat building – hard.

There are places bucking the trend. King County posted 3 percent job growth in September. Yakima’s housing market is booming, and the Tri-Cities are going strong. But many other communities are struggling, with flat labor markets and declining retail sales.

The past four years have been good for Washington, but clearly, we’re not immune from the broader economic crisis, and whoever comes out ahead in tomorrow’s elections will have a big challenge ahead.

Regional Report: Cowlitz economic troubles only get worse

First published Oct. 24, 2008

The latest bad news for Cowlitz County: Its signature employer, Longview Fibre, has shut down one of its paper-making machines and is laying off 90 workers.

Forest products industries have been hit very hard by the credit crisis, and nowhere is that more true than in Cowlitz County. Over the past 12 months, 400 sawmill workers have lost their jobs – a crushing 31-percent decline – along with another 400 paper workers, which represents 15 percent of the original workforce. (That’s not counting the most-recent Longview layoffs.) Another 200 construction jobs have gone away too. The only major gains were in the category of “administrative support, waste management and remediation,” but 300 new office clerk and janitorial jobs will only go so far to make up for the lost manufacturing paychecks.

These cuts are rippling through the economy with serious effects. A Kelso bowling alley is back in bankruptcy court, unable to pay a mounting back tax bill. Thieves and vandals – officials think meth addicts seeking scrap metal are to blame for much of it – have done so much damage to one developer’s building that he’s unable to move forward with plans to build a shopping center around it. Local development officials say the credit crisis has sunk efforts to attract two new companies that would have created 300 jobs.

The housing market is soft, with sales off 25 percent in the most-recent quarter, and median home prices falling 4.3 percent, to $175,000. Local real estate numbers for September showed a year-over-year uptick – the first in three years – but still, homeowners are dropping asking prices another 5 percent this month, as part of one brokerage’s national sales campaign that hopes the “sale” prices will stimulate buyers.

Retail sales also are weak, with the latest state Revenue Department reports showing an 8.1 percent decline in Longview sales and a 3.3 percent decline in Kelso. Countywide, sales were down 8.5 percent – well worse than the state average (down 2.4 percent). And the latest state wage data shows that Cowlitz County paychecks grew only 2.6 percent on average over the most-recent 12-month period – not enough to keep up with inflation.

Not surprisingly, the economy has emerged as a key issue in state and local elections this fall. Here more than most places in Washington, residents are asking candidates, what are you going to do to create jobs, and how will you help businesses prosper? The atmosphere is tense and political, to the point that an optometrist advertising those cool “Sarah Palin glasses” got blasted for her efforts by angry neighbors.

Declining tax revenues are jeopardizing one of the assets that could help Cowlitz County the most. Lower Columbia College is dealing with a 3-percent budget cut, even as enrollment spikes 17.5 percent, as laid-off workers try to retrain for new jobs. Cowlitz County won’t be able to break the timber cycle unless it can diversify its economy, and to do that, it must have a workforce with a broad range of skills.

College president Jim McLaughlin recently foreshadowed arguments we’ll hear in Olympia come January. “The state needs us in these times,” he said. “We’re the solution, don’t starve the solution.”

Regional Report: Rhetoric heats up as economy cools in Skagit

First published Oct. 17, 2008

The debate over local control of power distribution is coming to a head in Northwest Washington, with voters in three areas – including Skagit County – set to decide Nov. 4 whether to take over their local Puget Sound Energy facilities.

PSE is going all-out to fight the proposals, hiring a well-known Seattle lobbying firm to create “astro-turf” campaigns (i.e., efforts that appear to be run by grass-roots groups that are in fact run by political pros). In Jefferson County, PSE is outspending local-control advocates about 8-to-1, and on Whidbey Island, PSE’s supporters, including the Washington Policy Center, are arguing that when the lights go out, a large, state-regulated utility can provide better service than a newly formed public utility district – and at no greater cost.

“What is the business problem you are trying to solve?” PSE’s COO, Bertrand Valdman, asked at a recent public hearing. “Starting a PUD won’t stop the wind from blowing.” 
 
Public power advocates, however, argue that Washington PUDs universally charge less than investor-owned PSE. They even argue that the state’s Utilities and Transportation Commission should open the door for even more local takeovers.
 
We can debate this power issue all we want, but one thing that’s not debatable is the state of the Skagit County economy. It’s weak. 

 The most-recent state jobless report shows a slight decline (0.2 percent) in total employment in Skagit County. The two hardest-hit sectors are construction (where companies shed 300 jobs, a 6.5-percent decline) and manufacturing (down 200 jobs, or 3.3 percent). Skagit County is a boat-manufacturing center and as we’ve discussed recently, boat-building is one of those industries that’s been hit hard by the credit crisis.

Likewise, the construction numbers aren’t surprising. New home starts were down about 30 percent in the most-recent quarter. Home sales volumes were down about a third, and housing prices are slipping, falling 6.9 percent (to $269,500).

 Retail employment was also down, by 200 workers, but that was offset by a 200-worker jump in the hospitality industry. Tourism was strong this summer in Skagit, a fact some attribute to an increase in Puget Sound-area residents who took “stay-cations” close to home. Then again, last April’s unusually late snows hurt attendance at the month-long Tulip Festival, the county’s biggest tourist draw. That’s no doubt a major factor in why Skagit County reported an 11-percent decline in retail sales in the second quarter. Mount Vernon had a 13.5-percent decline – one of the worst results among Washington’s cities.

Of course, not all the news is bad. Burlington-based Business Bank just opened two new branches. “Here we are in the down cycle of banking and we’re making money,” chairman Don Gordon told a reporter. “We have faith that this area is good for the bank.”

That’s probably true – long term. But with a soft job market, declines in housing and a steep drop in retail, Skagit County is a tough place to do business, right now.

Regional Report: Looking for a port in the storm? Try the desert

First published Oct. 13, 2008

Talk about clichés. While the gathering economic storm casts gloom on the rest of the state – and indeed, the whole world, now – one corner of Washington still has a glowing economy: the sunny, sandy Tri-Cities.

The Tri-Cities lead the state in job growth again in the most-recent report, adding 2,600 jobs for a growth rate of 2.8 percent. Benton County’s 5.5 percent jobless rate was one of the lowest among Washington’s population centers. (Only King and Snohomish counties had lower unemployment.)

Remarkably, the Tri-Cities are one of the few places where construction employment continues to grow. Contractors added 400 people to their labor forces over the past year, for 5.7 percent growth. The housing market is weakening, but not collapsing, the latest figures suggest. Median prices slipped, but only by 0.6 percent (to $163,600). Sales volumes fell 23 percent, but that’s better than the state average (down 32 percent). And while housing starts may be grinding to a halt on the Pasco side of the river (Franklin County building permits fell 39 percent), they’re noticeably stronger on the Benton County side, down only 6.8 percent from 2007’s very strong totals.

That’s probably because Benton County is home to Hanford, and all those well-paid Hanford workers, and because Benton County includes the lower Yakima Valley wine country, which is a lure for refugees from California and the Wet Side.

Speaking of Hanford, the Department of Energy has extended Battelle’s contract to run the Pacific Northwest National Laboratories for another four years, which clarifies who’s in charge of that key employment center till 2012.

Year-to-year manufacturing employment was flat, although two companies – including up-and-coming solar powerhouse Infinia – are talking about expansion. The Tri-Cities have seen a sharp jump in food processing since 2000, notes local labor market guru Dean Schau, who says the number of employers in this sector went from 28 to 82 in seven years. Health care is a growing industry too, adding 200 jobs over the past year, as Kadlec Medical Center expands with new clinics. And last month Amazon.com hired 250 people for its Tri-Cities call center, in anticipation of the Christmas rush.

It’s important to note that the Tri-Cities are warm, not red-hot. The financial services sector shed 200 jobs this past year, and retailers are worried that high food and fuel prices will cut into holiday sales. They should be – new data out last week shows that while Kennewick and Pasco bucked the statewide decline, posting modest gains, Richland sales fell 5.2 percent. At the county level, Franklin County had a solid 5.2 percent gain, year over year, but Benton County saw a decline of 3.7 percent.

But here’s one sign of strength. At a time when entire states – and Washington cities big and small – are struggling with tax shortfalls, Richland is holding public hearings on a budget proposal that reflects revenue increases, thanks to a still-growing economy. After a week in which the Dow Jones fell 39 percent below last year’s peak, this kind of modestly good news is worth celebrating – warmly.

Regional Report: Construction drop may signal Bellingham slow-down

First published Oct. 6, 2008

We’ve talked about this before, how Bellingham keeps landing high up on all those lists of great places to live or to retire. That quality of life thing has driven population growth during the past decade, which in turn has driven business expansion, particularly in the service sector, where Whatcom County has seen strong growth in professional and business services jobs, financial services and leisure/hospitality (the latest thanks to some new casinos). The downside has been a sharp run-up in home prices, and with the credit crisis now in full swing, the housing market may be in for some volatility, which could easily spill over into the rest of the economy.

For now, the housing market is holding on to most of its recent gains: median home sale prices slipped 4.7 percent in the most-recent quarter, to $280,000, and sales volume was down 26 percent. Foreclosures are up, but remain relatively low.

The bigger issue, economically, is a 43-percent drop in new home construction over the past year. National homebuilder D.R. Horton recently took a $12 million loss on property it had to unload in Whatcom County. The new owner is scaling back development plans, looking to build smaller houses.

A fall in new-home starts, logically, would trigger declines in construction employment. That hasn’t happened yet, however: the employment sector that includes construction has been flat over the past year. (Financial services employment is down by 100, however.) Overall, the labor force grew by a modest 1.4 percent over the period, much slower than the growth in recent years, but growth nonetheless.

One factor boosting construction employment might be continued growth in commercial real estate. New buildings and large-scale renovation for retail projects has continued in recent months. But we’re starting to see signs of weakening in the commercial real estate market as well, as attractive new retail space sits empty. That’s probably a reflection of a slowing retail environment: Bellingham posted only modest growth (2.3 percent) in retail sales in the most-recent quarter; Whatcom County overall reported 2.4 percent growth.

Newly released gross domestic product data for the Bellingham metro area (more on this Bureau of Economic Analysis report next week) also suggests that growth was slowing prior to the credit crisis. The local GDP declined 4.7 percent between 2005 and 2006, according to the report, which ranked Whatcom County 359th out of 363 urban areas in the nation for growth during the period.

And while tourism is expected to be a growth industry in the next few years, as the weak dollar and (relatively) cheap gas bring Canadians south, and the 2010 Vancouver Olympics bring Americans north, tourist traffic and spending so far this year have been decidedly mixed, with hotel stays up, while bookings for traditional attractions were down.

So what’s it all mean? My guess is that Bellingham is just starting to come down with the national economic malaise. The sharp drop in housing starts and the soft retail sales numbers clearly point to that. However, continued enrollment growth at Western Washington University, and presence of two oil refineries should cushion the local economy from the worst of the sickness ahead.

Regional Report: Tide about to turn in Thurston County

First published Sept. 29, 2008

Olympia and Thurston County, as we’ve discussed before, have been national leaders in job creation so far this decade. That’s about to end.

State and local governments around the state are facing budget shortfalls, as home sales and new home construction – and all the taxes they generate – dry up. Already, local governments around the state are moving to cut staff and slash services. And the state government will have to follow suit, no matter who gets elected governor in November, Chris Gregoire or Dino Rossi. 

This is the next economic shoe to drop, and it will fall hardest in Thurston County, where the state government is by far the largest employer, and just about 35 percent of the workforce draws a paycheck from some level of government.

Most of the actual cuts are a couple months away: local government budget cycles start in January, while the state budget year starts July 1. But moves already are being made. Gregoire has approved a four-day work week for a couple of smaller agencies, as an experiment in cost-cutting. Legislative leaders are saying that they’d rather cut programs (and lay off workers) than try to trim state worker pay and benefits.

All this comes at a time when the local economy already is slowing. Thurston County’s workforce grew by 1.4 percent over the past year, after growing at better than 2 percent a year for most of this decade. Thurston County’s local governments aren’t waiting – they cut 500 workers over the past 12 months. The credit crisis is taking its toll: troubled banks shed 200 workers over the past year, as did building contractors. And employment in the professional services sector – which had been a source of economic growth – is falling off, with losses of 400 people. All this has charities like the United Way worried.

One area of growth is the service sector, which added 1,700 over the past year. That includes a 600-person gain in retail, thanks in no small part to last winter’s opening of Cabella’s. That new destination retailer is the reason for the 6.7-percent jump in retail sales activity in Lacey, but the rest of the county is seeing declines. Olympia retail sales were off sharply (5.4 percent) for the year, while the countywide total slipped 1.3 percent.

The lost construction jobs reflect the fact that housing starts were down 42 percent countywide in the most-recent quarter. The overall housing market is weak, with sales of existing homes down 29 percent, and median sale prices falling 5.1 percent, to $260,000.

The employment situation in construction could be improved by a couple big projects that are being proposed, but they’re all running into snags. A new mixed-use development in Tumwater can’t go forward unless that city raises its building-height limits. Olympia is still fighting over whether to allow taller buildings in its downtown. And a property owner is suing to stop a retail project on a neighboring lot.

The Olympia metro area is a desirable place to live and it’s been attracting a lot of non-government professionals. But it’s still a company town, and with government layoffs seeming to be inevitable, there’s no doubt the local economy will take a hit in 2009. The only question is how hard.

Regional Report: Yakima grapevine — foreclosure, growth, Palin

First published Sept. 19, 2008

Financial upheavals aren’t just limited to Wall Street. In Zillah, last week, backers of the new Vineyards – who had just broken ground on their $500 million project – found themselves battling a foreclosure attempt, as the financiers who fronted them the start-up money for the golf/wine complex tried to collect on a past-due $12.9 million note. The two sides are trying to negotiate a deal; if they fail, the property will be sold in a sheriff’s auction Oct. 17.

The imbroglio at the Vineyards will be closely watched. The resort is one of two major wine country golf developments in the works around Zillah, a blue collar, mid-Valley town that’s barely on the map as far as wet-siders are concerned. But with its 500-plus million-dollar homes on the fairways, 300 days of sunshine and wineries just a short golf-cart ride away, the Vineyards holds the potential to transform the entire Yakima Valley.

Across the Benton County line in Prosser, for example, the city is working get more of those wine tourists to get out and walk around in town. This kind of destination resort could be just the thing to drive new money to Yakima itself, where city officials are considering redeveloping the former Boise Cascade mill site with a project that mimics the way Bend capitalized on traffic to-and-from the nearby Sunriver resort.

Throw in the recently approved expansion at the White Pass ski area, and Yakima may at long last be on the cusp of truly being “the Palm Springs of Washington” – or at least a sun-splashed playground for western Washington’s wealthy.

There is a market for upscale houses in Yakima, local real estate agents say. The data bears that out. The most-recent statewide housing report shows that the median home price increased 4.9 percent (to $153,000), even though sales volumes were off nearly 22 percent. That means high-end housing is still selling, even as the broader market falls off.

(I chatted recently with Glen Crellin, the housing guru at the Center for Real Estate Research in Pullman. He said that compared to the rest of the state, Yakima is “robust.” Part of it is due to sales of second homes to people from outside the county, but the upturn “seems to be more across-the-board than that,” he said. “Yakima’s doing great. No one can figure it out.”)

Downtown Yakima is widely perceived as having come back to life – even if, as locals say, some parts of town remain “too sketchy to drive through.” The most-recent tax data clearly shows that. In the city, Yakima’s total taxable activity shot up 16.7 percent in the most-recent quarter – one of the state’s biggest gains. Countywide numbers weren’t quite so robust, but the 7.4 percent gain was still far better than the 1.4 percent state average.

The latest jobs report also shows gains, with total employment up 1.8 percent, despite job losses related to the cool spring weather. There were 200 lost jobs in non-durable manufacturing (i.e., food processing), and 400 lost in wholesaling (fruit and vegetable distribution). And on-farm employment in Yakima and Kittitas counties was down by 840 workers in July, due to the weather’s impact on the cherry crop. If spring had been reasonably warm, the summer employment picture would have been even better.

There are issues. As we’ve discussed before, Yakima has some of the nation’s lowest average wages. That’s probably a big factor in why it’s been unable to support its minor-league sports teams. And while legitimate farmers are doing well, marijuana is shaping up to be the Valley’s major cash crop.

Maybe Yakima will get a Sarah Palin boost. Turns out the GOP VP designee has bought eyeglass lenses from a company in Yakima. Alas, they weren’t for those suddenly smokin’-hot rimless specs she’s been wearing. These lenses were clear glass, meant only to be worn over contacts for “cosmetic purposes,” the Yakima Herald-Republic reports.

Regional Report: Bremerton lurches forward as Kitsap falters

First published Sept. 14, 2008

Community leaders from around the Northwest were in Bremerton last week to talk about urban waterfront renewal. Bremerton, of course, has been out front on this issue, with Mayor Cary Bozeman’s “Harborside District” redevelopment plan.  

The Bremerton renaissance, however, has seemed stalled in recent months. The bottom fell out of the national housing market, leaving the city’s new waterfront condos half-empty, and forcing one builder to sell his at auction to pay off his construction loan. Kitsap County’s job market has sputtered, the new-home market has tanked, and plans to develop a new industrial site adjacent to Bremerton National Airport have been slowed by in-fighting between Bremerton and Port Orchard, which feels bullied by the bigger city. In the latest Inc. magazine survey of the nation’s hottest small cities, Bremerton had fallen from 10th to a humble 63rd.

But the latest state sales tax report suggests that maybe Bremerton’s in better shape than we thought. 

Taxable retail sales in Bremerton climbed 8.2 percent in the first quarter, compared to the year before. I saw that and immediately thought “yeah, the state started that big tunnel project last year; that’s what caused the bump.” (Sales taxes on highway projects can impact the local numbers, you recall. GOP gubernatorial candidate Dino Rossi, by the way, wants to exempt such projects from the tax.) The fact that Kitsap County’s total taxable retail sales were off 1.1 percent made me even more suspicious.

But if you go inside the numbers you’ll see Bremerton’s experiencing real retail expansion. There was a 9.8 percent year-to-year increase in retail trade – sales of stuff like clothes and shovels and computers – and a 7.1 percent increase in the number of retailers citywide. Maybe that downtown revival is taking off after all.

Outside Bremerton, there’s not as much good news. Yes, large-scale construction – including a couple new clinics for Harrison Memorial Hospital (one in my Mason County hometown of Belfair) – is taking some sting out of the slumping home market. But new home starts are off 31 percent, existing home sales are down 29 percent, and median prices have fallen 8.9 percent, to $271,300. 

The countywide retail slump also is worrisome. So is the 0.2 percent drop in total employment. (There were 200 lost jobs in construction and 200 more in business services.) There are questions about a contractor building Navy housing. And there’s been more squabbling over land-use questions, including a new subdivision and a plan to annex the big McCormick Woods subdivision into Port Orchard. 

At a recent chamber of commerce meeting, former Kitsap Economic Development Alliance chairwoman Chris Rieland described the Kitsap County economy as “a gangly teenager.” It’s a perfect metaphor, she says, “because you can’t ever tell a teenager what to do. We need to hang on to what is best in our community and work to become more mature and forward-thinking.”

Regional Report: Slow growth continues despite bad news

First published Sept. 7, 2008

When is the announcement of 17 people being laid off good news? When you’re Hewlett-Packard, and everyone expected you were going to slash hundreds of people from your Vancouver payroll. H-P has announced widespread layoffs at plants in Idaho and Oregon, and many felt that further cuts could come at Vancouver, where about 1,300 people design, engineer and market ink-jet printers. The smaller cut was greeted with relief.

It’s been tough lately in Clark County. The county’s largest community bank, First Independent, also announced recent layoffs as it consolidates in the face of declining profits. And a Portland-based bike-frame and aluminum fence manufacturer has decided not to expand into the county, saying the high cost of the steel it would need to build its new factory makes the project prohibitive.

The plant would have brought 800 jobs, which would have been welcome about now. Total employment in Clark County is up a scant 0.8 percent over the past year. Layoffs have hit the paper industry very hard. Employment there is down 12.5 percent (200 jobs).

The sagging housing market means construction is off by 400 people, which is a 3 percent decline. New home starts are down 40 percent, according to the latest report. Sales volumes are down more than 30 percent, and homes that are selling are selling for less; median prices fell 7.4 percent, to $257,400.

As we’ve discussed previously, the housing boom that made Clark County the state’s fastest growing is very much over. But all those new residents have created demand for new services, and that’s somewhat offsetting the weakness in manufacturing and construction.

For example, health care continues to grow, adding 300 workers in the past year. In fact some health employers can’t find qualified workers fast enough to meet demand. And wholesale trade is strong (up 100 jobs), and there have been gains in transportation and warehousing (also up 100) – all sectors related to foreign trade, where a weak dollar has meant that exports are up but imports are down, all along the West Coast.

Despite the obvious weakness, some companies are finding ways to grow. Vancouver-based Papa Murphy’s is one. It’s now the fifth-largest pizza chain in the country, opening 100 new outlets a year. Tech company Wacom is another. The Port of Vancouver is moving ahead with plans to clean up property it wants to redevelop. North of Vancouver, there are signs of business expansion, as developers try to pencil out projects that would provide retail and other services to suburbs that boomed when housing was hot. And in Vancouver itself, an $18 million office project is going forward – while a $17 million mixed-use development sits on hold, waiting for a change in the condo market.

Even the Vancouver farmers market is reporting growth, which is encouraging. Clark County’s retail sales numbers were essentially flat in the most-recent quarter, up 0.7 percent, but both Vancouver (up 3.4 percent) and Camas (up 4.9 percent) posted stronger gains.