Pacific NW Economy is very strong

Quick, what do the Boeing 787, a weak dollar, cheap electricity, Microsoft Vista, high-priced oil, and solar-grade polysilicon have in common?

Answer: All help keep the Pacific Northwest economy growing briskly during a period of slow U.S. economic growth.

Crosscut, a new Seattle-area online news magazine, tells us:

The U.S. economy in the January-March quarter grew at the slowest rate in four years. In dramatic contrast, parts of the Pacific Northwest are flat-out booming, and most of the rest grows at rates as much as double the U.S. average.

Montana had the nation's lowest March unemployment rate, 2.0 percent. Both Montana and Idaho (unemployment rate: 2.8%) are essentially at full employment. Idaho ranks No. 4 in the U.S., Montana No. 7 in employment growth for 12 months through March, according to Arizona State University's monthly Job Growth Update. Washington at No. 10 and Oregon at No. 11 aren't far behind. All four states are growing employment substantially faster than the U.S. as a whole.

And the new jobs aren't just in burger joints and latte stands. Construction is at or near record highs in all four states. Washington's high-paid manufacturing sector is expanding, as are some other high-paid sectors such as software publishing and professional and business services. Montana's boom, spurred in part by rising global demand for raw materials including copper, has spread to most sectors of its economy. Population growth at roughly three times the national average spurs broad growth in Idaho.

What else is behind Pacific Northwest growth? Boeing's dramatic turnaround, for starters. Boeing and its suppliers have been growing payrolls at the rate of abut 500 a month for almost three years. Washington's aerospace head count, at 77,500 in March, is still dramatically below the 113,100 reached in early 1998, but it is up 27 percent from the cyclical low of 60,800 three years ago.

High oil prices? I, too, wince at the gas pump. But it is $60-$70 oil that has made the Boeing 787 the most successful new-airplane launch in history. Boeing has promised customers roughly 20 percent more fuel efficiency per seat mile than today's fleet. It is the main reason the 787 is sold out through 2012 (more than 570 orders so far), while the less-fuel-efficient jumbo Airbus A380 (555 seats to the 787's 200-300) is stuck at about 150 orders, far fewer than needed to amortize development cost.

Note that trade is important here. Most 787 sales are exports. And much of the airplane is imported. Trade! Likewise, software. And much of professional services.