The Honey Bucket Index

Off-beat economic indicators -- portable toilet rentals, anyone? -- offer a look into the state of Washington's economy.

The economy is definitely doing better these days. On what do I base this assessment? The recent rise of the stock market to near pre-recession levels? Stronger consumer confidence? The Federal Reserve’s efforts to boost the economy? The fact that we avoided the fiscal cliff? Nope.

It’s Honey Buckets.

“Our ‘units rented number’ has jumped significantly since last summer, with the Seattle area being the hottest market,” said Steve Barger, Vice President of Business Development for Northwest Cascade Inc. Honey Buckets is a division of the company. “Last June, all of sudden our rentals were up 12 percent over the previous June.” Portable toilets are a good indicator of the health of the building and construction industry, Barger said, but they also have been good at predicting the health of the overall economy, with some timing adjustments.

Honey Bucket rentals peaked in 2008, he said, and stayed fairly strong for a few months after that. Although the recession was beginning to pinch the economy, construction continued on projects that started a year to 18 months earlier.

In 2009, bucket rentals dropped, Barger said, and then hit a “dramatic decline” in 2010 and 2011. Rentals were down as much as 30 percent from peak to trough.

Honey Buckets demonstrate that you really don't have to be an economist to understand what is going on in the economy. All you have to do is look around and be aware of changes.

Before the Great Recession, for example, I’d frequently get a letter from real estate brokers who had a “qualified buyer ready to pay cash” for my Eastlake neighborhood property. The letters stopped coming for several years during the housing bubble, but recently they have started up again, a sure sign that the real estate market has returned. 

I was talking with my favorite grocery checker in January, asking her why there were no lines waiting to check out on Saturday mornings. “It happens every January,” she said. “People spend money on Christmas and the holidays and they cut back in January. They’ll be back in February.” Sure enough, they were. Economists probably would have done some complicated calculations on real disposable income or something to figure out what we can gauge pretty well all by ourselves.

Those off-beat economic indicators are supported by some big time experts. Forbes Magazine ranks Washington the 11th best state in the country for business. It “is a cradle of innovation as the birthplace of iconic companies like Microsoft, Amazon.com, Nordstrom, Starbucks, Boeing and Costco,” Forbes said. As a sign of the strength of the economy, Forbes said venture capitalists poured $1.8 billion of VC money into the state between 2009 and 2011, fifth highest in the country.

Seattle still shows some strong growth, especially in construction. There are more than 45 construction cranes in the city now, evidence of building projects in South Lake Union and a number of new apartment complexes going up. (The apartment industry tends to be very cyclical and usually overbuilds at some point. It may be near that level now.)

But while the economy is certainly showing signs of growth, especially in Seattle, the news isn't all good. The state Employment Security Department said Washington’s estimated unemployment rate reached its lowest point in four years in December, at 7.6 percent. However, recent declines in the unemployment rate have been due largely to a shrinking labor force, as unemployed job seekers stop looking for work.

“Our population is growing and we’ve regained more than half of the jobs lost during the recession, but the number of people in the labor force has been declining,” said Joe Elling, chief labor economist for Employment Security. “When the labor force shrinks, it artificially lowers the unemployment rate.”

The December report also showed a seasonally adjusted drop of 7,900 jobs. But Employment Security said there was weak response to the employer survey in December, and the number may be revised in later reports. The Honey Bucket index showed up in the report too — the latest industry with job gains in December was construction, up by 3,100 jobs.


Like what you just read? Support high quality local journalism. Become a member of Crosscut today!

Comments:

Posted Tue, Feb 12, 8:42 a.m. Inappropriate

Forty years ago I met a guy in the cardboard box business who told me that was a leading indicator of good or bad times. My casual observation over the years support that.

Posted Tue, Feb 12, 9:18 a.m. Inappropriate

The state Employment Security Department said Washington’s estimated unemployment rate reached its lowest point in four years in December, at 7.6 percent.

The US B.L.S. puts out a broader measure of unemployment and underemployment, called the "U-6" measure. We're one of the worst states in the country using that measure:

http://seattletimes.com/html/soundeconomywithjontalton/2019938310_the_trouble_with_washingtons_u.html

Part of what that Times story notes is this:

In the third quarter of 2012, Washington posted one of the worst U-6 unemployment rates in the nation, 17.1 percent. U-6 measures the "officially" unemployed, plus part-time employees who want but can't find fulltime employment, as well as discouraged workers.

The 4Q 2012 figure was right at that 17% level as well.

The recession ended 3.5 years ago. The large multinational companies around here are doing fine -- their fortunes don't depend on a healthy local economy.

The other 80% -- people who aren't employed by public sector entities or multinational corporations -- face economic realities that are unrelated to Porta-Potty rentals.

crossrip

Posted Tue, Feb 12, 8:53 p.m. Inappropriate

Off-beat economic indicators…another look in the state of WA economy.

“In the course of my life I have noticed that there is one commodity that all peoples receive in equal amounts. That commodity is ice. The difference is that rich folks get theirs in the summer time and the
poor folks get theirs in the winter.”

--- W.B. “Bat” Masterson

jmrolls

Posted Wed, Feb 13, 5:09 p.m. Inappropriate

When the shelves at the local food bank are full and people get enough food from them, that's when the economy is doing well.

Djinn

Login or register to add your voice to the conversation.

Join Crosscut now!
Subscribe to our Newsletter

Follow Us »