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 ECONOMIC BASE

Economic Base

Summary: Spokane developed as a service center for the growing natural resource industries flourishing in the area in the 1900s.  With the erosion of resource-based industries in the early 1980s, the region's economy slowed and remained in or near recession through the decade.  By the end of the decade, the economy rebounded, bolstered by an in-migration of both business and individuals.  The influx of new residents expanded the area's labor pool; the labor force grew 22% in the 1990s.

Spokane's labor force has grown over 13% since 2000.  Employment grew 7.2% between 2000 and 2010.  Although the labor force grew in 2009, employment fell resulting in an increase in unemployment to an 8.8% average, up from the previous year by 2.8%.  The current unemployment rate is 9.8%.

Areas of Economy: Regional trade and service related employment are the area's dominant industries and account for about 61% of  non-agricultural jobs. Wholesale and retail trade and associated trucking and warehousing comprise almost 16.6% of non-agricultural employment.  Federal, state, and local government employment accounts for 17.9% of non-farm jobs.  Leisure and hospitality entities make up 9.2%, and financial activities account for approximately 5.9% of non-agricultural jobs. 

Current Decline in Manufacturing: Although manufacturing traditionally has contributed significantly to area employment and payrolls, its influence is declining. Manufacturing related employment grew steadily through the 1980s into the 1990s, peaking at 22,300 jobs in 1997 when it accounted for 12% of the nonagricultural employment base.  Manufacturing employment waned to 17,600 in 2005, but rebounded to 18,900 in 2007, then went down to 17,000 in 2008.  Kaiser Aluminum closed its Mead smelter plant in the early years of this decade; reductions at the Kaiser Trentwood rolling mill in the Spokane Valley followed.  The dot-com implosion in the early years of the decade hit the electronics manufacturing sector hard.  Huntwood Industries, a cabinet manufacturer supplying the west coast, has been hit hard by the decline in new home construction. Although manufacturing employment rebounded modestly in mid-decade, the 19,000 peak reached in 2007 is 12.4% below the 21,900 average in 2000.  Manufacturing employment averaged 17,000 in 2008, or 10.5% lower than 2007 levels.  Levels through August 2011 are at 15,300. 

The Role of Fairchild Air Force Base: While it is not unusual to find school related employment in the top 10 employers in many communities, the nature of government employment in Spokane is different, due primarily to the contribution of Fairchild Air Force Base. Much of the housing for those stationed or working at Fairchild is off-base in the greater Spokane area. It is also common for service retirees to relocate in Spokane after their service commitment is fulfilled. After evaluating all domestic military bases for possible expansion or  closure in 2006, the Base Closure Commission recommended that Fairchild remain open with only slight modifications to its mission.

  
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