Whatcom County experienced a big jump in production last year, but that doesn’t necessarily mean it was a banner year for the local economy.
$9.92 billion Estimated value of Whatcom County products in 2015, according to the U.S. Bureau of Economic Analysis
Last year the area produced goods valued at $9.92 billion, according to a report from the U.S. Bureau of Economic Analysis. Whatcom County saw a 4.4 percent increase in the real value of goods produced, making it the 34th highest jump among 292 metro areas. Whatcom County’s GDP has risen by nearly $700 million since 2011, according to the data.
Much of Whatcom’s year-over-year growth took place in the nondurable goods category – products that are consumed in a short period of time. Oil refining dominates the nondurable goods category here. In 2014, the two refineries at Cherry Point made around $1.4 billion in product.
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The BEA won’t have information about 2015 growth in specific industries until its next update in 2017, but previous years have shown that what happens with oil refining has a major influence on the area’s nondurable goods category.
Having the oil industry dominate the region can influence the numbers in a way that makes it difficult to figure out what is going on in the overall local economy, said Hart Hodges, co-director of the Center for Economic and Business Research at Western Washington University.
“Oil prices can change or just the volume of oil refined can change and we can see some big changes to our GDP, when in some sense nothing has changed” in the overall economy, Hodges said.
A closer look at other numbers show some signs that Whatcom’s economy was improving in 2015, at least from a production standpoint. While the growth was less than nondurable goods, the construction industry experienced a significant uptick last year. Building permit data from the city of Bellingham confirms this trend, showing increases in apartment construction as well as other large projects, such as the $73 million renovation of Western’s Carver Gym. However, local construction job growth has remained relatively flat through 2015, trailing the state average.
One challenge for the local construction and trades industry is adjusting to an overall change in demand, said James McCafferty, co-director at CEBR. He’s noticed more multifamily construction and more use of metal material than wood. That makes it more difficult to hire qualified people.
“It is causing all sorts of challenges for builders and people looking for repairs,” McCafferty said.
The change in what’s being built also could impact construction job numbers, Hodges said. For example, a company working on a big project such as an apartment complex or a hotel may have a different workforce number than a construction company working on several smaller projects at the same time.
Other categories showing significant GDP growth in Whatcom County last year include natural resources, trade, education and health care. Two categories had slight drops in GDP locally – finance and transportation. Nationally, finance was up while transportation was down slightly.
Other economic data and events suggest Whatcom County’s economic growth in 2015 was a mixed bag. At the end of 2015, for example, the Canadian dollar was at an 11-year low, CH2M Hill was closing its Bellingham office, the future of Alcoa’s Intalco plant was murky and the turmoil surrounding Haggen’s bankruptcy suggested more job losses were coming.