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Olympia: Economy


Major Industries and Commercial Activity

The city's early development was based on its port facilities and lumber-based industries, and later oyster farming and dairying. Following World War II, Olympia served as a major service center for lumber communities west of Thurston County, while the Port of Olympia remained a major transportation center for shipping logs and finished lumber. But during the mid-twentieth century, the decline of the local timber industry resulted in the loss of many of the local associated milling and secondary operations.

During the 1970s, Olympia expanded as a center of offices and homes for state employees, military personnel, and their respective families. This further diminished Thurston County's already modest farm sector as housing development pushed into the remaining fertile prairies. Dairy and truck (mostly berry) farming continued in the south county, interspersed with small hobby farms.

In the late 1960s and early 1970s, the state legislature approved and financed construction of the Evergreen State College. The four-year public institution became an economic and cultural fixture in Thurston County with faculty, staff, and students contributing to the local housing and retail sectors. On a smaller scale, South Puget Sound Community College and Saint Martin's University in nearby Lacey also drove the housing demand. In the late 1980s the Olympia waterfront and downtown were revitalized, and an effort began to draw new businesses to the area.

Manufacturing continued to be a major economic segment in the early 2000s, though a set-back was experienced with the closure of the Miller Brewing plant in June 2003. Wood and food processing segments were stagnating, while plastics, industrial supplies, and machinery were experiencing growth. Area companies in these growth segments include Dart Containers Inc., Albany International Corp., Big Toys Inc., and Amtech Corp. Overall, though, the number of manufacturing jobs is projected to decrease slightly until the late 2000s, when it is expected to regain the employment level it had in 1990.

Agriculture, another industry traditional to Olympia, also waned, although production is still higher than in nearby counties. In 2002 Thurston County produced crops valued at $49 million, and its livestock, poultry, and related products were valued at $65 million. Although the size of farms continues to decrease, the number of farms actually increased, with 1,155 farms operating in 2002. As with agriculture, the timber industry is dominated by smaller, family-owned operations.

As the capital of the state of Washington, Olympia relies on the state government to be a stabilizing factor for the local economy. According to the Thurston Regional Planning Council, state government was the county's second-largest industry behind services in 2000, employing 22,750 people. In addition to the jobs it supports directly, state government also supports the economy by attracting tourists, as does the region's gambling industry. The Olympian reported in 2005 that tourism spending in the area jumped from $153.4 million in 1998 to $209.7 million in 2003. The annual sessions of the state legislature in the winter and spring mark the first tourist season of the year, with summertime recreation and attractions, including tours of state buildings, following.

Compared to other regions in the state, Olympia and Thurston County are home to a relatively small number of technology companies. To attract them, economic development officials promoted the area's telecommunication infrastructure, low property price, and educated workforce. In 2004 Univera Inc., a biotechnology firm, relocated to Thurston County from Colorado. Other recent additions to the area are Reach One, an Internet service provider, and Fast Transact, a processor of credit card transactions.

Items and goods produced: wood products, processed foods, metal and paper containers

Incentive Programs—New and Existing Companies

Local programs

Olympia has no corporate or personal income tax, and no inventory tax. Thurston County offers exemptions on sales and use tax for manufacturing equipment, repair and replacement parts, and labor; for manufacturing machinery and equipment used for research and development; and for warehouse/distribution facilities and equipment. A tax credit of up to $2 million is available for research and development in the high technology industry. Tax exempt revenue bonds for manufacturing, ranging from $1 million to $10 million, are also available.

State programs

The state of Washington offers a number of incentive programs to attract new and expanding businesses to the state. Among them are B & O tax credits; sales/use tax deferrals for technology and manufacturing companies as well as for firms relocating or expanding in distressed areas; and loan programs that apply to rural areas and the redevelopment of brownfields.

Job training programs

South Puget Sound Community College provides specialized job training for public and private employees, contracts with businesses to provide specialized job training, and operates a comprehensive Cooperative Work Experience program. The Washington state Job Skills Training Program offers employers a 50 percent match for training costs. The federal Workforce Investment Act (WIA), formerly Job Training Partnership Act (JTPA), may match up to 50 percent of wages for on-the-job training of dislocated workers.

Development Projects

Faced with a higher cost of living, residents of such large cities as Seattle were migrating to Thurston County by the beginning of the twenty-first century. According to the Thurston Regional Planning Council, 77 percent of the county's increase in population between 1990 and 2000 was attributed to in-migration. This influx, combined with relatively low interest rates, drove development projects. In 2004 the Red Wind Casino completed a $31 million expansion, and the area's other tribal casinos completed similar upgrades. The Westfield Shoppingtown Capital mall expanded and renovated, and was pursuing the construction of a 16-screen movie complex in 2005. Elsewhere in Thurston County, construction of new office buildings for the state government were in progress, including the 160,000-square-foot, $35-million Cherry Street Plaza in Tumwater.

Economic Development Information: Economic Development Council of Thurston County, 665 Woodland Square Loop SE, Ste. 201, Lacey, WA 98503; telephone (360)754-6320; fax (360)407-3980; email busdev@thurstonedc.com. Thurston Regional Planning Council, 2404 Heritage Ct. SW, Ste. B, Olympia, WA 98502; telephone (360)786-5480; fax (360)754-4413; email info@trpc.org

Commercial Shipping

After years of struggling with an identity as a failing bastion of log exporting, the Port of Olympia reported its first profitable year in nearly a decade with a surplus of $400,000 in 2004. The turnaround was primarily due to diversification into such bulk commodities as metals and limestone, and the controversial move into military shipments to support the war in Iraq. The 60-acre, deepwater port offers three berths, a U.S. Customs bonded warehouse, and a cargo yard for breakbulk, bulk, rolling stock, and containerized cargoes. The Port of Olympia is also the site of Foreign Trade Zone #216, an area where foreign goods bound for international destinations can be temporarily stored without incurring an import duty.

The Port of Olympia owns and operates Olympia Regional Airport, a general aviation-transport facility for corporate, commercial, and recreational users. The airport is 20 minutes by air to the Seattle-Tacoma International Airport and 50 minutes away from Vancouver, B.C. Nearly 90 miles of active rail lines lie in Thurston County. Burlington Northern Santa Fe, Union Pacific, and the Puget Sound & Pacific Railroad serve the area, with the Tri-City & Olympia Railroad also serving the Port of Olympia.

Labor Force and Employment Outlook

Olympia's workforce surpasses much of the nation in educational attainment. Of adults aged 25 years or older in 2000,91.6 percent of Olympians had obtained a high school diploma, compared to the national average of 80.4 percent. That discrepancy is even greater in terms of college education, with 40.3 percent of Olympia's residents earning a bachelor's degree or higher, while only 24.4 percent did so across the United States as a whole.

The following is a summary of data regarding the Olympia metropolitan area labor force, 2004 annual averages.

Size of nonagricultural labor force: 93,000

Number of workers employed in . . .

construction and mining: 5,100

manufacturing: 3,300

trade, transportation and utilities: 14,600

financial activities: 3,800

professional and business services: 7,100

leisure and hospitality: 7,400

government: 35,600

Average hourly earnings of production workers employed in manufacturing: $18.27 (2004 annual statewide average)

Unemployment rate: 5.7% (January 2005)

Olympia: Economy

Largest Thurston County employers (2004) Number of employees
State of Washington 20,000-25,000
Local Government 10,000-15,000
Providence St. Peter Hospital 1,000-5,000
Tribal Government 1,000-5,000
Federal Government 500-1,000
Group Health Cooperative 500-1,000
Columbia Capital Medical Center 100-500
Wal-Mart Stores Inc. 100-500
St. Martin's University 100-500
Costco Wholesale Corp. 100-500

Cost of Living

Thurston County set a new record for housing prices in January 2005, when the average price for a home was $224,104, up from the previous record of $223,884 that was set in November. These figures demonstrate a rapid increase in housing costs, driven by people migrating from more crowded and costly counties to the north, as well as those taking advantage of low interest rates to purchase larger homes.

The following is a summary of data regarding several key cost of living factors for the Olympia area.

2004 (3rd Quarter) ACCRA Cost of Living Index: 102.2

2004 (3rd Quarter) ACCRA Average House Price: $244,960

State income tax rate: None

State sales tax rate: 6.5%

Local income tax rate: None

Local sales tax rate: 1.9%

Property tax rate: 13.119 per $1,000 of assessed value (2005)

Economic Information: Thurston County Chamber, 1600 E. 4th Ave., Olympia, WA 98507; telephone (360)357-3362, fax (360)357-3376, email info@thurstonchamber.com


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