The most recent Charter Bank Economic Barometer value (Q2, 2005) of 100.8 marks the third consecutive quarter in which the index has improved. It also marks six consecutive quarters in which the index has exceeded the baseline level of 100.
Taxable retail sales figures, which exclude auto sales, are also strong.
King County's economic cycle, which lasts approximately 10-12 years, is typically characterized by a five- to seven-year period of recovery, followed by moderate growth, then rapid growth, and finally, correction. There are, however, risks to our local business cycle. Rising interest rates can impact capital expenditures, housing starts, and consumption. High energy prices can cool economies at national and regional levels. With an estimated one million more Puget Sound area residents in the next 15 years, our existing transportation infrastructure will be inadequate to keep pace.
Jim Hebert, President of Hebert Research, sees the following as bright spots for the local economy:
- Development of biotech corridors in the Lake Union and Bellevue/Redmond areas.
- Continued employment expansion at the Boeing Company.
- Microsoft's long-term commitment to the region.
Download a printer-friendly Fact Sheet on our latest Economic Barometer. The fact sheet is available in PDF file format, which you can read using Adobe® Acrobat® Reader.
Variables used in the barometer
The barometer relies on classic economic variables, weighted according to their influence – job growth, for example, is given the most weight. Other variables are taxable sales, B&O taxes, local stock values, business formations, and housing permits. Taxable sales and housing permit data are lagged one quarter, and new business formations data is lagged two quarters.
Sources used for this data include Washington Mutual (Northwest 50 stock index); Housing & Urban Development; the Bureau of Economic Analysis; the Department of Revenue; the City of Seattle; the City of Bellevue; and the Employment Security Department.
Brief historical analysis
The barometer is calibrated so that the first quarter of 1992 is equal to 100. The year 1992 was selected as a baseline because it marked the end of the rapid cooling off period following the late '80's boom, and the start of a five-year period of economic recovery.
At its peak, the boom of the late 1980's hit 104.7 in the first quarter of 1990, before plunging down to a low of 99.3 in the second quarter of 1993. The 1990's boom peaked at a virtually identical level of 104.4 in the third quarter of 1997, which was followed by a sustained correction that continued until the end of 2002. According to the barometer, leading indicators of this recession were visible as early as 1998. The leading indicators are now suggesting that our regional economy may have bottomed out in late 2002. | 
