Washington State’s Economic Revenue Forecast Council recently released their September Economic Review. While Washington’s revenue collections have been approximately $650 million above the June forecast, the economy is still vulnerable to economic uncertainty caused by an increase of COVID-19 cases.

The September report includes two new months of Washington employment data since the June quarterly forecast was released, showing that employment has continued to rise (currently 10.3% unemployment rate, down from the historic 16.3% unemployment rate in April).

The disruption of airline travel is expected to reduce demand for new aircraft for some time. Another quarter of decline in aerospace exports will have a significant impact on overall exports. Boeing expects to lay off an additional 9,300 aerospace employees by the end of this year.

Washington housing construction declined in the second quarter but is above the June forecast. Seattle home prices declined for a third consecutive month, after 11 consecutive increases. Car and truck sales increased in May, June, and July, but remained below rates seen prior to the COVID-19 outbreak.

Overall, the Forecast Council projects a 4.9% decline in Washington employment this year (down from the 5.5% decrease projected in the June forecast). Revenue collections since the June forecast are roughly $640 million above expectations.

The forecast will likely be impacted by COVID-19 infection rates, as a decline in infection rates could lead to quicker reopening of businesses and greater consumer confidence, while an increase in COVID-19 infection rates would likely reduce consumer spending and employment and slow the pace of economic reopening. The next quarterly revenue forecast will be released September 23.