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Publisher: David GraybillEditor: Lindsay BraunProject Manager: Gary BrackettDesign: Christina KitchensPhotography: Chip Van Gilder, Joe Andrade and the Port of TacomaPrinter: Print NWCopyright 2007 Tacoma-Pierce County Chamber. All rights reserved.

Bruce D. Mann, Ph.D., has beena professor of economics at theUniversity of Puget Sound since1975. Dr. Mann came to the Tacomaarea from Indiana University wherehe received both his masters anddoctorate degrees in economics. Hecompleted his undergraduate workat Antioch College in Yellow Springs,Ohio. Dr. Mann's research interestsinclude urban and regional economics.

Douglas E. Goodman, Ph.D., hasbeen a professor of economics atthe University of Puget Sound since1977. He came from the University of Illinois where he received hismasters and doctorate degrees. Dr.Goodman's teaching responsibilitesfocus on monetary economics andeconometrics. His research interests arein the areas of nance andapplied economics.

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Because of the lag in publication of economic data, each PCEI Report forecasts fora period to covering the last two quarters of the current year (2007) and the fullcalendar year ahead (2008).

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Pierce County Economic Index Report

Pierce County, by diversi ying itseconomic base and becoming moreintegrated with international andnational markets, has traded stability

or a lower average rate o growth.

Slower growth does not meannegative growth. Although nowgrowing slower than anticipated,the Pierce County economy continues improving rom the mildweakness experienced in 2002-2003.

The weakening value o the dollar,increasing uncertainty over the U.S.trade de cit, and slower economic

growth in both Europe and Asia hascurtailed shipping, warehousing, andtrade growth. Interest rate concernshave started to slow the housing andconstruction markets.

While local growth lagged thenational rate in all o 2006, by the

rst quarter o 2007, Pierce Countysgrowth exceeded the national rateand continued above the nationalrate into the second quarter o 2007.The rate o overall economic activity

in Pierce County will continueto increase at a moderate paceduring the remainder o 2007. Thecontinued slower local growth willbe due to national and regional

orces.

Economic activity in PierceCounty will improve during 2008.Although still below the 2.7% longrun average rate o growth, thePierce County economy will bestrengthening. For the year as awhole, the PCEI will move up by 2.3% in 2008.

An unemployment level in the 5%to 6% range indicates, or mostlocal economies, a good balancebetween job growth and increasesin the labor orce. The annualaverage unemployment rate orPierce County in 2007 will be 5%.Pierce Countys unemploymentrate will increase by one-hal apercentage point to 5.5% in 2008.

Total real income will continue to

increase at a below average rate in

2007 and 2008. The mild economicexpansion, continuing distributionale ects, and only moderate jobgrowth in Pierce County will keepincome growth at 2.5%. Per capitaincome will rise to $37,000, a gaino 3.7% in 2008. Median amily incomes will reach $58,900 in 2007and $60,100 in 2008.

The 2007 holiday shopping seasonwill be good, i not spectacular.Dollar volume, mostly in the orm o higher prices, will move up by 4.2%,adding sixty million more dollars tolocal area cash registers than last year.

Growth in retail sales activity willincrease during 2008. Retail sales willmove up by 4.1% on an annualizedbasis during the rst quarter o 2008and then by 4.8% in the secondquarter. Summer retail sales (thirdquarter o 2008) will be 4.2% aheado the 2007 pace. The holiday retail season ( ourth quarter) willincrease by 4.4 % over the 2007 level.Overall, the 2008 dollar volume o

retail activity will increase by 4.4%.

Executive Summary

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5

The poorest per orming and weakestsector in the Pierce County economy,not surprisingly, was the market orsingle- amily housing. Even thoughthe market will start turning aroundlate in 2008, problems will still exist.

Pierce Countys multi- amily rentalmarket will become increasingly attractive or investors, and plans

or new developments will increase although the actual economicimpacts will not be elt in 2008.Pierce Countys non-residentialreal estate markets remained strongthrough mid-year 2007. The

commercial sector will continuestrong in 2008. When Port-relatedactivity resumes growing and as thegeneral distribution needs o thesouth Puget Sound increase, thedemand or industrial space willpick up by mid-year 2008.

At the Port o Tacoma, containerizedshipping activity will increase by 4.6% TEUs (twenty- oot equivalentunits) in 2008. International activity will move up by 6.1% and domesticshipping by just under one-hal apercent. About 5.5% more vehicles

will move through the Port in 2008than did in 2007. Breakbulk cargotonnage will rise by 4% during 2008,although grain shipments will bedown by 4.4%.

The Port is working hard to plan andbuild the acilities and in rastructurerequired while expanding its strongenvironmental stewardship.

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Pierce County Economic Index Report

Labor Activity and Unemployment

Employment

Pierce County labor marketscontinued to register strongper ormances throughout 2006. Jobgrowth in each quarter o the yearexceeded last years estimates. Duringthe year, Pierce County employersadded 7,900 new jobs to the localeconomy- better than the 6,100 jobs expected last year. This strongper ormance translated into a 3%annual rate o employment growth, aquarter o a percentage point aheado the orecast and well ahead o the2% overall county growth rate or

the year.Job growth remained solid duringthe rst hal o 2007. Local employersincreased employment in the county at an annualized rate o 1.6% duringthe rst two quarters o the year.This was in line with last yearsoutlook. As anticipated last year, therate o job growth did slow duringthe rst hal o 2007. A major parto this growth deceleration was theresult o slower employment growthin the construction sector. Businessservice employment also slowedsomewhat, while manu acturing and

military-related employment werestable.

Nonagricultural employmentwill continue to increase duringthe second hal o 2007. On anannualized basis, jobs will grow by 2% in the third quarter and thenby 1.6% during the ourth quarter.For the year, employment willexpand by 1.75% in 2007 downa bit rom last years 2% orecast increasing payrolls by 4,700. Theslower job expansion, o course, isdirectly related to the slower overallincreases in the Pierce County

economy.

Local employers will expandPierce County payrolls by 2% in2008. Employment growth willremain airly stable throughoutthe year. Annualized quarterly rates o growth during the rsthal o the year will be just over2.1%, and then slip to 1.9% orthe second hal . During 2008, the

economy will add 5,600 new jobs.The up-turn in employment growthduring 2008 will be the result o Pierce Countys overall stronger

economic per ormance. The jobgains should be spread across mostsectors o the labor market. The oneexception could be employmentgrowth in the housing sectors where job opportunities might contract.Other parts o the real estate sector(commercial and industrial inparticular) should continue to havesolid growth in employment.

Labor Force

Pierce Countys labor orce grewin 2006 in line with last yearsexpectations. The number o new

job seekers grew a bit slower thananticipated during the rst threequarters o the years, but reboundedin the ourth quarter. During the year, about 3,100 new workersentered the countys labor orce;an increase o 0.8 %.

Labor orce increases were strongerduring the rst hal o 2007than orecast. Most likely a lowunemployment rate and the solid

growth in jobs encouraged workersto locate (or remain) in PierceCounty. In addition, in-migrationto the region picked up during late

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9

2006 and into early 2007. The strongbusiness service sector, constructionemployment gains, and growth inaerospace related activity made locallabor markets attractive.

Labor orce growth will remainstrong in the second hal o 2007.On an annualized basis, the countyscivilian labor orce will increase by 3% in the third quarter and by 2% inthe ourth. By the time 2007 ends,an additional 8,000 workers will callPierce County home. Not all o themwill nd employment in the county;some will work in adjacent areas.The largest number o commuterswill nd work in King County, butan increasing raction will nd jobsin the expanding Thurston County economy.

Growth in the labor orce will bemore moderate in 2008. The rsthal o the year will have solid gainso around 2% in both the rst andsecond quarters. Growth in thesecond hal o the year will ease a bitto 1.5%. For the year, the countyscivilian labor orce will increase by 7,200 workers, an annual growth rate

o 1.9%.

Unemployment

During 2006, the balance between job growth (both locally andregionally) and the increase inthe labor orce kept PierceCountys unemployment rate

airly steady. The rate trendeddownward during the year roma high o 5.5% in the rst quarterto a low o 4.7% at years end.The 5.2% annual average rate o unemployment in Pierce County

or 2006 was on target with last years orecast.

As anticipated, the unemploymentrate moved up during the rstquarter o 2007, but not quite asmuch as expected. Rather thanincreasing during the secondquarter, the rate declined dueto the stronger than expectedeconomy and solid job growth.Instead o moving up to 5.5%as orecast last year, the localunemployment rate will remain atabout 5% when the year ends. Theannual average unemploymentrate or Pierce County in 2007will be 5%- about one-hal a

percentage point better than last years expectation.

During the rst three quarters o 2008, the unemployment rate in thecounty will increase. The increase willnot be large; about three-quarterso a percentage point by the end o the third quarter. The largest upwardmove will be during the normally sluggish rst quarter o the year whenthe rate will reach 5.9%. The ratewill drop during the ourth quarterto just about 5.2%. For the year asa whole though, Pierce Countysunemployment rate will increase by one-hal a percentage point to 5.5%.

Even though the local unemploymentrate will move up by the end o 2008,the level will remain in the very good range. Since 2004, the localunemployment rate has been belowthe 6% level. Moreover, except or the2001-2002 slowdown, the rate hasbeen under 6% or the past decade.An unemployment level in the 5%to 6% range indicates, or most localeconomies, a good balance between job growth and increases in thelabor orce.

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Pierce County Economic Index Report

Retail Sales Activity

As expected last year, retail salesactivity remained strong through2006. Dollar sales growth registeredgains range around 8.5% during the

rst hal o the year, continuing thestrong growth since late 2004. Agrowing economy with more jobsand new retail outlets provided the

oundation or this two-and-one-hal -year period o strong gains insales. Third quarter activity wasslightly better than expected, movingup by 5.5% a hal a percentagepoint ahead o the orecast. The

ourth quarter o the year, however,was a bit disappointing, with salesup by 5.6%, not the 6.9% anticipated.Nonetheless, the holiday shoppingseason in 2006 was quite good orlocal merchants. For the year as awhole, retail sales activity moved

up by 7% over 2005, in line withlast years orecast.

The strong dollar sales gains in2006 were not caused by justhigher prices. The impact o priceincreases was very modest. Thereal value o retail activity in 2006moved up by 3.6%, beating last years estimate o 3.4%. Eventhough the total dollar increasein sales was below orecast or the

ourth quarter, the quantity o merchandise leaving stores in PierceCounty increased by more thananticipated.

Slower local growth combined withmoderate job gains in late 2006and early 2007 started to impactretail sales in Pierce County. Retailactivity rose, both in terms o dollars (up 6%) and volume (up3.4%), in the rst quarter o 2007,

but the gains were below last yearsestimates. As expected, sales growth

so tened markedly during the secondquarter o the year, with dollarvolume up by 2.5% and real sales upby 3.4%. Sales growth will remain inthe moderate range during the 2007third quarter dollar sales will moveup by 2.5% and real activity will gain1.7% over 2006 levels.

The 2007 holiday shopping seasonwill be good, i not spectacular.Credit market concerns, weakness inthe local housing market, and someerosion in consumer con dence,will keep Pierce County shopperson the hesitant side when it comesto big-ticket purchases. Still, agrowing economy with more jobswill increase sales during the ourthquarter. Dollar volume will move upby 4.2%, adding sixty million more

dollars to local area cash registersthan last year. Much o this spending

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increase will be absorbed by higherprices. The volume o merchandisemoving out o stores will increase by just less than one percent (0.8%).

The annual increase in retail sales in2007 will all below 5%, the lowestrate since 2002. For the whole year,dollar retail volume will move up by 3.7%, below last years 5.5% orecast.This so tening in the growth inspending is in line with the generalpattern o overall economic activity and with the behavior o morecautious consumers. Slower growthdoes not mean negative growth.Pierce County shoppers will spend$223 million more in 2007 than they did in 2006.

Growth in retail sales activity willincrease during 2008. A strongerPierce County economy, reduceduncertainty about credit marketconditions and housing values,

and stability in the job market,will lead to improved consumercon dence. In addition, during2008 the number o retail outletsin the county will increase as newtown center developments, mallexpansions, and retail centerscome on line.

Retail sales will move up by 4.1%on an annualized basis duringthe rst quarter o 2008, and thenby 4.8% in the second quarter.Growth will moderate a bit in thesecond hal o the year. Summerretail sales (third quarter o 2008)will be 4.2% ahead o the 2007pace.

The holiday retail season in 2008will show a nice gain. PierceCounty sales in the ourth quarterwill increase by 4.4 % over the2007 level. Shoppers in local

stores will put an additional $73million in cash registers during the

ourth quarter o 2008 comparedto the same period in 2007. Sinceinfation will remain modest, mosto the dollar gain will translateinto merchandise moving out thedoors. Real retail activity in the

ourth quarter will increase by 3%,signi cantly better than the 2006rate o just 0.8%.

Even with retail sales momentummoving up throughout 2008, totalannual sales growth will remainbelow the countys 6.4% thirty-yearaverage. In 2008, the dollar volumeo retail activity will increase by 4.4%.

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Pierce County Economic Index Report

rom more military personnel inPierce County. The build-up atarea bases tends to dampen therate o growth or income. Averagemoney incomes o many military personnel are on the lower end o the earnings distribution, since themilitary provides signi cant non-income bene ts in lieu o dollarpayments. Another contributing

actor is the growth in businesssector lower skilled jobs, particularly in the health care sector. Finally, thesluggish growth in trade-relatedactivity slowed the expansion o higher wage jobs in that sector.Total real income will continue toincrease at a below average rate in

2007 and 2008. The mild economicexpansion, continuing distributionale ects, and only moderate job growin Pierce County will keep incomegrowth in check.

In 2007, real total personal incomewill move ahead o the 2006 levelby 2.3%, adding $515 milliono purchasing power to localhouseholds. The income growth ratewill move up a little or 2008, whenreal personal income will increase by 2.5%. During 2008, Pierce County residents will gain an additional $560million in purchasing power.

Total Personal Income

Total real (in 2000 dollars) personalincome in Pierce County moved upin 2006 by 2.2%. This increase inpersonal income is below both last years orecast o 5% and the countyslong run average growth rate o 3.8%.The growth in income produced just under an additional one-hal billion dollars or county households.The slower growth in total personalincome refected the slower overalleconomic growth. Income growthalso slowed because the numberso lower paying jobs grew asterthan did higher wage ones. Thisdistributional e ect results, in part,

Personal Income

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Per Capita Income

Smaller gains in total personalincome, combined with anincreasing population, dampenedper capita real income growth.In 2006, rather than the increaseo 4% orecast last year, real percapita (in 2000 dollars) in PierceCounty moved up by less thanone percent (0.8). Per capita realincome growth will acceleratein 2007 and 2008 with gains o 1.2% and 1.3% respectively. Thisincreasing growth rate will be theresult o both aster growth inthe total amount o income and aslowing rate o population growth.

In current dollar terms, theaverage person in Pierce County

received about $1,400 moreincome in 2006 than in 2005- again o 4.1%. In 2007, the averagedollar income per person willmove up by $1,300 (a 3.8% gain)to $35,700. Per capita incomewill rise to $37,000, a gain o 3.7% in 2008.

Family Income

Population and household dataindicate that since 2000, theaverage size o a Pierce County household is getting smaller.

In part this is the result o anincreasing number o empty nest households; the ageingo the population. Also, thisis the result o more single-

person, younger households. Thus,average amily income has notbeen increasing as ast as per capitaincome. In 2006, the median amily income level in Pierce County was$57,100 and this amount has beenincreasing at about 3.1% per year.Based on this pattern, median amily incomes will reach $58,900 in 2007and $60,100 in 2008.

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Pierce County Economic Index Report

Single-Family

The poorest per orming and weakestsector in the Pierce County economy,not surprisingly, was the market

or single- amily housing. Actualand anticipated problems in thesub-prime mortgage market haverippled into the local housing market.Lenders are tightening underwritingrequirements and scrutinizing loandocumentation more care ully. Andinvestor caution about mortgage-backed securities is reducing the fowo unds to parts o the mortgagemarkets. These national orces aremaking it harder or some buyersto quali y or loans, lengthening thetime to closing, and causing concernsabout market conditions.

Adding to the problems comingrom the national mortgage market

is the moderate growth o the Pierce

County economy. Some potentialbuyers most likely decided to de ertheir purchases until conditionsimprove. The slowing housingmarket, in turn, gives potentialinvestors pause, leading some to re-evaluate their decisions to enter thePierce County market.

Finally, the very strong marketper ormance o the prior ve yearsled to over-optimism in the housingmarket. In particular, constructiono new condominium units andcondominium conversions broughttoo much product to the market tooquickly. Absorption rates declined,prices so tened, and deals ellthrough. This bad news urthereroded con dence in the housingmarkets.

As orecast last year, the growth inhousing market activity (measured

by our housing index that tracksnew units coming to the market andpending sales o single amily homes)came to a virtual halt in the thirdquarter o 2006. An actual decline inactivity occurred during the ourthquarter when the housing indexdeclined by just over 4%.

Last years outlook was or acontinuing decline in activity through the rst three quarterso 2007 ollowed by the start o a recovery in the ourth quarter.However, the mortgage marketimpacts were stronger and moresevere than expected. Housingactivity in the rst hal o 2007 ellmore sharply than orecast. Thehousing index declined by 4.3% inthe rst quarter and then by 7.1%in the second. Rather than a slowerdecline with a recovery, the all in thehousing index will be larger duringthe second hal o the year. In thethird quarter activity will be o by 10%, and then be down in the ourthquarter by 16%. For the whole year,the housing activity index will movedown by almost 9.5%, ending the year back at a level not seen sincemid-2005.

As growth in the Pierce County economy strengthens and the turmoilin mortgage markets subsides in2008, the decline in the local housingmarket will decelerate. The housingindex will move down by 15% in the

rst quarter, it will drop by 12% inthe second quarter, and then by 5%in the third quarter. By the ourthquarter o 2008, conditions willimprove enough so that the housingindex will move up by almost 10%.For the year, the housing index willregister an annual decline o 6.3%, sothat as the year ends the index will beat the same level it reached in 2004.Even though the market will

Housing and Real Estate

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start turning around late in 2008,problems will still exist. The unsoldinventory o condominium units willcause some developers to cancel plans

or new buildings and conversions.Foreclosed single- amily units willcontinue to come to market, o ten atbargain prices, moderating priceappreciation. And, cautious lendingpractices will keep some buyers outo the single- amily market, orcingthem to the rental side.

Multi-Family

Condominium conversions and slownew construction kept the supply o apartments rom growing muchduring the past couple o years. By mid-2007 weakness in the mortgagelending sector started to push homebuyers out o ownership and intothe rental side o the market. Thus,the apartment market began toimprove. In the second hal o 2007,the vacancy rate in Pierce Countysapartment market began to decline.Rents started to increase asa consequence.

These same orces will continue tosupport a stronger apartment andmulti- amily housing sector in PierceCounty during 2008. Planned newconstruction activity remains at alow level. Even with abandonedcondominium conversions, the netincrease in the supply o units willbe very modest. Mortgage marketconditions will continue to keepsome potential buyers in therental market.

With demand increasing andsupply not increasing by much,vacancies will decline and rentswill rise during 2008. PierceCountys rental market willbecome increasingly attractive

or investors, and plans or newdevelopments will increasealthough the actual economicimpacts will not be elt in 2008.

Commercial

Pierce Countys non-residentialreal estate markets remainedstrong through mid-year 2007.During the third quarter, thecommercial vacancy rate declinedto just under 7%, with Tacomascentral business district rate atonly 5.7%. In the county, therewere virtually no vacancies inClass A space.

The commercial sector willcontinue to be strong in 2008.Demand or o ce space willincrease as the Pierce County economy continues to grow. Themarket or Class A space will beespecially tight, resulting in risingreal rental rates throughout the year. Much o the new spacecoming to the market will be, oris planned to be, in urban centersor in established developmentareas. Almost all major area mallsare planning and implementingexpansions and upgrades, andmost will include o ce as well asretail space. New and expandedcity center developments will

continue to augment the supply o commercial space. Demand or newretail real estate will continue strongas local shops expand and newoperations move to the county.

Industrial

The supply o new industrial spacepushed the vacancy rate up early in 2007 throughout Pierce County.Large developments came to marketin the Fi e and Puyallup/Sumnermarkets. This will continue throughthe end o 2007, keeping rental rates

rom rising and vacancy up.

However, the pipeline is shrinkingand less square eet o new space,especially speculatively built units,appear on the horizon. When Port-related activity resumes growingand as the general distributionneeds o the south Puget Soundincrease, the demand or industrialspace will pick up by mid-year2008. Even with demand increasing,though, the large supply increaseswill keep rent increases moderate.In addition, competition romThurston County developers willbecome more intense addingdownward pressure on rents.

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Prepared by Lisa Wadel,Business Planning Analyst

Cargo

Global economic growth of 5.2% wasa bit slower than 2007. Slower globalgrowth and modest increases in U.S.activity resulted in at activity onWest Coast ports during 2007. Only partially offsetting this was the weakU.S. dollar which allowed for recordgrowth in U.S. export of goods andservices.

The Port of Tacomas containerbusiness declined 5.2% in 2007 aftera at 2006. Over the past ve years,the Ports container trafc has grownby 13%. In 2007, one of the Portsmajor customers restructured their

transportation network resulting inthe loss of one service at the Port,and a smaller allocation on theremaining two services. AnotherPort customer started in 2006,redeploying a weekly service toCalifornia, and the full loss effectwas registered in 2007. Domesticservice to Hawaii and Alaskaremained strong during 2007,accounting for one-fourth of the

Ports container volume.

In 2007, the Ports breakbulkbusiness (non-container shipments)fell to 126,000 short tons in 2007-down 2.3%. Military shipments in2007 dropped below 2006 levels.The Ports auto business was strongin 2007, handling approximately 178,000 units, up 7.0% from 2006.

In 2007, the Ports grain exportactivity was up 3.4% from last year even though export activity was shut down for a month as theterminal operator performed routinemaintenance.

Containerized shipping activity willincrease by 4.6% TEUs (twenty-foot equivalent units) in 2008.International activity will move

up by 6.1% and domestic shippingby just under one-half a percent.About 5.5% more vehicles will movethrough the Port in 2008 than didin 2007. Breakbulk cargo tonnagewill rise by 4% during 2008, al-though grain shipments will bedown by 4.4%.

2008

2048

1516

532

497

187131

2007

1959

1429

530

492

178126

ForecastEstimate

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7

Capital

One o the Ports relative strengthsis the availability o land nearby with good inland connections. Mostexisting terminals can be enlargedand land is available or newterminals. The announced plans orthe new NYK acility, coming to thePort mid-year 2012, will include 168acres with a terminal capacity o 1.8million TEUs - more than 85% o the Ports current volume. Phase II,scheduled or completion in 2019,

will be capable o moving 2.5 millionTEUs on 216 acres.

The Port is working hard to plan andbuild the acilities and in rastructurerequired in the uture. Its capitalbudget or the next ve years is$868.4 million. All this results in avery positive outlook - the Port is

orecasting a 119.8% increase in itscontainer business over the next

ve years.

Environment

Environmental stewardship remainsa ocus or the Port. Over the pasttwo decades, the Port o Tacomahas invested more than $162million in projects that improvethe quality o the lands and waterso Commencement Bay and thePuyallup River Watershed.

This restoration o over 9 acres,represents one o the ew emergentmarsh habitats available or

temporary residence or oragingo outmigrating juvenile salmonalong the entire 46 miles o the Puyallup River. The Portcontinues pursuing opportunitiesto implement low-impactdevelopment practices to minimizestormwater contamination, protectsalmon, and improve water quality.

The Port and its customers havereduced air emissions created by marine terminal activities through

the use o low-emission uels,installation o diesel oxidationcatalysts on cargo handlingequipment, and purchasingpolicies that avor low-emissionvehicles. The Port o Tacoma isalso a major unding partner in thecompleted Puget Sound MarineEmissions Inventory, a projectto establish baseline data on thesources o marine air emissions anda oundation or an air emissionreduction strategy.

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Quarterly Data gures from FirstQuarter 2001 through SecondQuarter 2007 are actual data.Forecast of quarterly gures are fromThird Quarter 2007 through FourthQuarter 2008.

*Housing Activity Index: A volume of new or used homes for sale or sold. Avalue of 163.91 means the number of homes for sale or sold is 63.91% abovethe 1990 average of the number of homes for sale or sold.

Key local economic variables for Pierce County, Washington as of November, 2007.

2007-2008 PCEI Summary and Forecas tNote: Data used to construct the charts, graphs and tables Pierce County, Washington

Year QuarterPCEIIndex

1985=100

Non-AgriculturalEmployment

(x1000)

PercentUnemployment

Rate

TaxableRetail Sales

(millionsof $)

*HousingActivityIndex

1990=100

2001200120012001

Qtr 1Qtr 2Qtr 3Qtr 4

164.859165.150165.179165.354

241.60244.53245.37244.27

6.306.176.357.15

923.7301019.2661059.2691193.193

163.91168.81171.82170.01

2002200220022002

Qtr 1Qtr 2Qtr 3Qtr 4

165.072165.458166.750167.141

238.60243.63246.57248.37

8.808.307.677.43

990.5241099.8071171.0901223.732

166.68165.96172.05175.72

2003200320032003

Qtr 1Qtr 2Qtr 3Qtr 4

167.832168.483167.944168.267

244.07248.20249.40251.43

8.508.378.557.60

1050.9731168.2121231.5681295.693

183.63190.05193.50196.10

2004200420042004

Qtr 1Qtr 2Qtr 3Qtr 4

168.904169.317171.155172.849

248.40255.43256.20261.10

8.077.176.536.17

1134.7471249.0221304.5141409.778

192.07196.33198.86204.95

2005200520052005

Qtr 1Qtr 2Qtr 3Qtr 4

174.229176.018177.007177.746

257.27263.47265.23269.40

6.636.075.605.13

1228.7941363.4281464.9111511.460

213.52220.88230.83237.71

2006200620062006

Qtr 1Qtr 2Qtr 3Qtr 4

178.752179.376180.181181.233

266.73272.23272.13275.87

5.475.305.174.73

1332.2981481.4131544.7801596.354

236.50237.22231.89227.54

20072007

Forecast 2007Forecast 2007

Qtr 1Qtr 2Qtr 3Qtr 4

181.872182.802183.826184.537

271.47276.27277.77280.40

5.374.604.875.19

1411.8821518.6711583.6401662.910

226.25220.37207.81191.07

Forecast 2008Forecast 2008Forecast 2008Forecast 2008

Qtr 1Qtr 2Qtr 3Qtr 4

185.952187.209187.837188.767

277.05282.10283.29285.73

5.955.605.425.19

1470.1601591.6001650.5001735.990

191.96193.04197.99209.44

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Pierce County Economic Index Report

The 2007 Pierce County EconomicIndex (PCEI) Report was presentedto the community at the Horizons2008 economic forecast event.Complementing the conference werepresentations by several individualsand a sharing of expertise andinformation by others.

A special thanks to the eventskeynote speaker, Dr. Robert Baur,

Managing Director-Global Head of Trading, Principal Global Investors.

As the current managing directorand global head of trading forPrincipal Global Investors, Dr. Baurhas overseen over 30 fxed-income,equity and currency traders in suchdiverse locations as Des Moines,London, Tokyo and Sydney. Hisrole as an economic researcher forthe equity group has lead him toIndia, Hong Kong, Chile, Brazil andvarious U.S. cities.

Dr. Baur has also been featured

on CNBC, and in Bloombergand various print media. Hisprofessional experience andconsiderable practical knowledgein economics makes him an idealkeynote speaker on the nationaleconomy. Our special thanks toDr. Baur for his enjoyable deliveryof a complex and challengingtopic.

A complementary workshopfeatured insights by professionalsin our community. The workshop:Growth and Development of Our Economic Base, offeredinsights on Pierce Countyscommercial and industrial realestate outlook. It was moderatedby Mike Partlow, LandAmericaCommercial Services withpanelists: Wilma Warshak,Colliers International and BobEmerson, Port of Tacoma. Also, a special thanks toWonderDog Media for the

development of an introductoryvideo focused on the connectionsbetween leaders and entrepreneursof our community and how theycontribute to economic development.Scott and Olga Gribble continuedtheir outstanding productions insupport of the Chambers premierevents.

A very special thanks is extended

to University of Puget Sound fortheir active support of Dr. BruceMann and Dr. Douglas Goodman,authors of the PCEI. The Universityof Puget Sound is an independent,predominantly residential,undergraduate liberal arts collegewith selected graduate programsbuilding effectively on a liberal artsfoundation. The University, as acommunity of learning, maintainsa strong commitment to teachingexcellence, scholarly engagement,and fruitful student-facultyinteraction.

Special Thanks

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PCEI Sponsors

Colliers International

LandAmerica Commercial Services

Port of Tacoma

Puget Sound Energy

Regence BlueShield

Tacoma Public Utilities

Venture Bank

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Whats your market? Is it Washington State? Puget Sound? Pierce County?The Chamber can provide you with a directory of manufacturers scopedto your needs.

The Chamber offers a CD that includes data in a searchable format by company, product codes and location. Information includes address,phone and fax numbers, as well as email and website if available. Plus, anonline demonstration can be arranged before you purchase.

You can choose to use this service for just one year for a low price, oropt for a renewable subscription for an annual fee. The next update isscheduled for Spring 2008.

For more information or to obtain a copy of the Statewide Manufacturers Directory, call Gary Brackett, 253-627-2175 orgary.brackett@tacomachamber.org.

Did you ever wonder about the potential customerssurrounding your place of business? Would thecustomer base in another location match your

product line? Is your competitors geographicalcustomer base different than yours? What are theirbuying habits?

The Chamber can develop consumer demographic information by various radii, drive times or geographical areas,track trends and chart projections for several comparable areas. As a service to our members, the Chamber offers thisinformation in a downloadable format in various templates. The results can be emailed to you.

Call either Gary Brackett, gary.brackett@tacomachamber.org or Paul Ellis, paul.ellis@tacomachamber.org for a phoneconsultation at 253.627.2175 about site location analysis and market research.

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December 11, 20087 a.m. to 10 a.m.

Greater Tacoma Convention & Trade CenterPlease plan to join us.

Save the Date

Every year, the Tacoma-Pierce County Chamber o Commerce presents the PCEI Report at the Horizons economicorecast break ast. Mark your calendar or December 11, 2008 to see whats in store or 2009.

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950 Paci c Avenue, Suite 300 PO Box 1933Tacoma, WA 98401

p | 253.627.2175 | 253.597.7305