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.
Barger said the company is hiring and has started up Honey Bucket University again, a training program that insures quality and helps workers learn the ropes. A worker may be cleaning more than 60 portable toilets in a typical shift. More work is being done at night, Barger said, because of traffic.
The program is rigorous. “We may not have the cheapest portable toilet, but we have the cleanest," said Barger, adding, “not everyone graduates from Honey Bucket University.”
Makes one think of perhaps the worst item on a resume: Flunked out of Honey Bucket U.