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What is the economy of Washington state?

Updated time: 06 Sep, 2021, 21:14 (UTC+08:00)

Washington has the country’s largest population of STEM (science, technology, engineering and math) workers. This state is also a major marine foreign trade partner with Asia with numerous trade routes from the Puget Sound ports. Washington state's economy, accounting for 8% of the country’s exports, is only behind New York, California, and Texas while handling 6% of the USA's imports. It is the home base to many giant firms such as Boeing, Starbucks and Microsoft as well as their billionaire founders, Jeff Bezos and Bill Gates.

Seattle - Washington state

Seattle - Washington state

Only seven states in the US do not collect personal income tax, and Washington is one of them. Although the state does not impose corporate income tax and franchise tax, it has levies such as sales tax, property tax, business and occupation tax (B&O), and a gross receipts tax (rate varies for different types of businesses). This can be very advantageous for business owners and companies in the state. With a clever maneuver, businesses can reduce the amount of tax they have to pay to the local government. In turn, this helps Washington state's economy by attracting more companies.

The job market has increased by 1.8% in 2019 and is predicted to be 39.1% over the next ten years, passing the national average. This indicates that Washington state’s economy is very healthy.

Washington state economic growth

Washington has the fastest-growing state economy in 2018, almost twice the national rate. This results in the state reaching the top ten biggest economies in the US for the first time. Over the 5 years period, Washington state economic growth was at a compound annual growth rate of 5.02% per year. Real Washington state's GDP reached its peak at $618 billion at the beginning of 2020. However, it dropped down to 544.63 billion U.S. dollars in that year. Washington state's GDP represents 2.86% of the nation’s GDP.

Washington state economy - An industry analysis

Washington is famous for its hydroelectricity production, which is the highest in the entire country, accounting for more than half of this state’s total electric generation and a third of total energy consumption. Washington state's economy has a strong focus on aerospace, agriculture and forestry manufacturing, life science, maritime, clean technology, information and communication technology (ICT), and military. Below is an in-depth analysis of each sector.

Aerospace

This sector cemented Washington state's economy as the leading aircraft and unmanned aerial systems manufacturer and as an important supplier of aerospace companies and airlines all over the world. Washington is also one of the biggest aerospace labor force’s training centers. The companies in this sector, with Boeing at its helm, also cooperate to streamline and improve their training programs, focusing on current needs and relevant policies. This ensures future growth in the aerospace sector’s investment.

Agriculture and forestry manufacturing

The Washington agriculture industry’s goal is the expansion of its numerous crop commodities as well as processed foods to other markets by improving policies and logistics for smoother trading. At the same time, Washington also works very hard to preserve the natural resources and farmlands, which are crucial for the sustainability of this sector.

Forest product manufacturing, despite many challenges, still managed to innovate, modernize and diversify in order to continue this very old industry far into the future. Main products such as pulp, paper, and furniture help turn this industry into the 3rd largest manufacturing sector in Washington state's economy.

Clean Technology

The Washington state government encourages companies in this sector to explore new innovative technologies to protect and improve the environment. At the same time, it also makes sure to not forgo production and business performance. In order to achieve these dual goals, the government works hard to create a business environment in which innovation and entrepreneurship can truly prosper. The clean technology sector works hand in hand with all other sectors to integrate their practices and findings into every company in this state. The Eastern area of Washington is also famous for its wind farm.

Washington’s wind farm

Life Science

This industry has been attracting new businesses to Washington, leading to breakthrough after breakthrough. This sector is filled with world-leading research institutions, organizations and think-outside-the-box entrepreneurs. Their motivation and talent resulted in several discoveries as well as improving existing technologies. This is a growing industry in the Washington state's economy.

ICT

Washington can even rival California when it comes to the talented workforce in ICT. Washington state's economy is supported by a big number of start-ups and several big corporations. This ensures future Washington state economic growth. This sector focuses strongly on sustainable investment and training to maintain a healthy pool of talents for software, networks, gaming, e-commerce and big data.

Maritime

Washington state's economy has a strong standing in import and export due to this state maritime industry’s contribution. The government’s goal for this sector is to promote sustainable policies and actions as well as building a strong foundation for future growth. For example, the state has been streamlining and simplifying the trading process and investing strongly into the infrastructure for commerce.

Military

This industry is complex with defense missions and military installations, contractors and vendors and military-friendly communities for the entire country. Washington state’s economic growth is supported by this sector thanks to the major revenue stream from the federal government. However, due to some recent changes in policies, this sector is expected to face several downsizing as well as the huge responsibility to help military members adapt to civilian life.

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