Washington

Economy

The mainstays of Washington's economy are services, financial institutions, manufacturing (especially aerospace equipment, shipbuilding, food processing, and wood products), agriculture, lumbering, and tourism. Between 1971 and 1984, employment increased in such sectors as lumber and wood products, metals and machinery, food processing, trade, services, and government, while decreasing in aerospace—which remains, nevertheless, the state's single leading industry. The eruption of Mt. St. Helens in 1980 had an immediate negative impact on the forestry industry—already clouded by a slowdown in housing construction—crop growing, and the tourist trade. Foreign trade, especially with Canada and Japan, was an important growth sector during the 1990s. Leading manufacturers are the Boeing Aerospace Co. and Microsoft, Inc. In the 1990s, state economic growth was robust, with annual rates soaring to 9.6% in 1998 and 8.6% in 1999, before moderating to 4.6% in 2000. The driving forces in Washington's economy, the high-tech computer and aerospace sectors, became the main sources of its troubles after the collapse of the dot.com bubble on the stock market in 2001 and after the events of 11 September. Growth fell to 2.2% in 2001, and by the end of 2002, all sectors except government and financial services (including insurance and real estate) had lost jobs. In December 2002, Washington's unemployment rate of 6.8% was higher than all states except its neighbor, Oregon, and Alaska. Already having problems before 9/11, Boeing cut its workforce 18% in 2002, announcing plans to cut more jobs and/ or relocate its operations out of Washington. Spokane continued to suffer the adverse effects of the bankruptcy of Kaiser Aluminum. Job losses in the high-paid dot.com, high-tech, and aerospace sectors had disproportionate impacts on personal income in Washington. In 2001, Washington's gross state product gross state product was $223 billion, the 14th largest among the states, to which general services contributed $52.1 billion; financial services, $41 billion; trade, $37.3 billion; government, $30.8 billion; manufacturing, $27.4 billion; transportation and public utilities, $18.1 billion, and construction, $11 billion. The public sector in 2001 constituted 13.8% of gross state product, above the 12% average for the states.