Washington’s Exports Defy the Odds—But Can the Economy Keep Up?
SEATTLE — Amid a backdrop of sluggish economic growth and crawling employment rates, Washington state is witnessing a surprising uptick in exports, leaving economists and lawmakers scratching their heads. While the overall economic picture appears less than rosy, certain sectors are bucking the trend, raising questions about what this means for the state’s future.
State lawmakers are diving deep into the latest economic forecast, which paints a picture of slowed growth despite expectations of increased revenues over the next biennium. “We’re seeing growth, but it’s notably slower than what we’ve experienced in the past,” explains David Reich, Executive Director and Chief Economist for the Washington Economic and Revenue Forecast Council. Reich highlights that employment growth has been particularly anemic, rising by only 0.3% so far this year—a figure he describes as “unusually slow” for the state.
But here’s where it gets controversial: While the government shutdown, now in its third week, is often blamed for economic woes, Reich dismisses it as a “relatively modest economic event,” depending on its duration. Similarly, inflation driven by tariffs has been milder than anticipated, likely due to suppliers absorbing additional costs rather than passing them onto consumers. “We’ve seen lower price impacts than expected,” Reich notes, though he cautions that these effects may still materialize, just more gradually, stretching into 2026.
Over 75% of Washington’s revenue stems from three key taxes: retail sales tax, business and occupation tax, and property tax. Reich attributes part of the lower-than-expected revenue to sluggish taxable sales, though he’s quick to point out that not all sectors are struggling.
Exports, for instance, have surged by 7% year-to-date, driven largely by transportation equipment. This boom is widely attributed to new international deals, such as Boeing’s recent agreements to sell aircraft to other countries. Agriculture exports are also thriving. However, other sectors within the export bucket have dipped by about 10% in the first half of the year. “This trend has been ongoing for over a year, so it’s likely tied to shifts in global markets rather than tariffs,” Reich explains.
And this is the part most people miss: Despite the September report’s gloomy outlook, Reich remains cautiously optimistic. He predicts a GDP uptick next month, suggesting a potential silver lining. “Our base case isn’t a recession,” he assures. “We expect continued growth, but at a slower pace.”
Looking ahead, Reich anticipates higher inflation over the next few years, with conditions stabilizing by 2027 as the effects of tariffs gradually dissipate. The state’s next economic forecast, due in November, will provide further clarity—but for now, Washington’s economy remains a study in contrasts.
What do you think? Is Washington’s export growth a sign of resilience, or is it merely a blip in an otherwise sluggish economy? And how should the state address the slow employment growth? Share your thoughts in the comments—let’s spark a conversation!
