WORKING PAPER NO. 49 COLUMBIA RIVER BASIN PROJECT For Water Supply and Water Quality Management NORTH PUGET SOUND AREA SKAGIT AND WHATCOM COUNTIES, WASHINGTON ECONOMIC BASE ANALYSIS AND PROJECTION 1960 - 2010 November 1964 U. S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE Public Health Service Region IX Division of Water Supply and Pollution Control 570 Pittock Block Portland, Oregon 97205 ------- WORKING PAPER NO. 49 COLUMBIA RIVER BASIN PROJECT For Water Supply and Water Quality Management NORTH PUGET SOUND AREA SKAGIT AND WHATCOM COUNTIES, WASHINGTON ECONOMIC BASE ANALYSIS AND PROJECTION 1960 - 2010 DATE; November 1964 DISTRIBUTION; Prepared by Project Staff Reviewed by Cooperating Agencies Approved by ; General U. S0 DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE Public Health Service Region IX Division of Water Supply and Pollution Control 570 Pittock Block Portland 5, Oregon ------- NORTH PUGET SOUND AREA Skagit and Whatcom Counties, Washington ECONOMIC BASE ANALYSIS AND PROJECTION 1960 - 2010 TABLE OF CONTENTS Page A. Present Economic Base and Population ...... 1 . 1. Industry and Employment ...................DO........... 1 2, Population...o....0.0 .....o..... <>. ... 0........... 8 B» Projected Economic Base and Population .... ....<> 8 1. Factors Influencing Future Growth ...,0o .'.......... 8 20 Projected Industrial Production .. ,, ..... .......... 11 a. Food Processing .....0.0.0 11 b. Pulp ......'..... 11 c. Petroleum Refining .......... ........<>.............. 12 d« Aluminum .....o...».».........o«o.... 12 e. Other Industries ..,.., 12 3. Projected Population ................... 12 LIST OF TABLES -No. and Title I. Employment, by Industry, North Puget Sound Area 4 II. Percentage Distribution of Employment, by Industry 5 III. Principal Manufacturing Establishments 6 IV. Population, by Urban and Rural Areas ..........<>o 10 U. S. DEPARTMENT OF HEALTH, EDUCATION, AND V7ELFARE Public Health Service Region .IX Division of Vlater Supply and Pollution Control :.. 570 Pittock Block Portland, Oregon ------- A. Present Economic 3a.se and Popu^lsticn - Ir^ustrv and ErapJo-v-Tr^ent Skagit and Whatcos Counties, referred to in this report as the North Puget Sound Area, are within the Seattle Region, Seattle providing seme of the specialised commercial and professional services for the area. The wall-diversified economic base of the North Puget Sound Area rests upon three.natural resources; (1) rich agricultural land along the Puget Sound littoral, providing the material for food processing industries; (2) forests, providing materials for lumber, plywood and pulp manufacturing; and (3) the Puget Sound itself, which provides sea food for processing and supports recreation paid boat-build- ing incustries a A fourth major element in the economic base of the -srea, petroleum refining, i.s also partly dependent upon the Puget Sound location, since the crude petroleum for the Anacortes refineries is- partly supplied by tanker, as well as by'pipeline from Canada, In the Skagit and lo.atccm two-county area, the total labor force in April 1950 was about 45,000. of whom about 8,900 ware employed in manufacturing,, Within the manufacturing group, the iv.du=try with the largest employment is lumber'and wood products manufacturing, which includes plywood. Employment in this industry group declined during the 1950-cO decide by c.bout 30 perce.-t, but it still pi ricai about a third of all manufacturing jobs= Other types of manufacturing basic to the araa arc. (in order of employment); food processing'., petroleum refining, and ~ulp and paper manufacturing,. Data en ev.._:'_o'_~ii~t by industry are shcv.-.n in Table 1., ------- During the 1950-60 decade, the'number of jobs" in the area increased by about 4,50CS The decline in lumber and wood products jobs was just offset by the new employment at the three petroleum refineries established during the decade. Additional growth in the other manu- facturing categories added to the diversification of the area's economy. Two other major changes in employment during the 1950-60 decade .followed well-established'national trends; agricultural employment declined sharply, and "service" industries1 enploynsnt increased as a proportion of total employment. Table 1 shows the substantial increases.that occurred in employment in education, professional services, retail trade, and personal services. The nature of the .economic base of the two-county area is further ravaalad by Table II, which shows the percentage distribution of the Icbcr.force, by industry, in that area compared with the distri- bution in the U., S., as a whole,, Basic industries in which the North Puget . Sound Area, specialises (ioe^, in which the relative portion of the labor force substantially exceeds the national average) include the following: agriculture3 forestry and fisheries, lumbar and wood products, food processing, pulp and. paper, and petroleum refining. Relatively high employment in certain service industries (retail trade and personal services) can be attributed to tourist and recreation activity. As for the relatively high employment in construction, education and professional services, it is considered that these result from special local conditions. ana are not part of the basic erivolovment of the area. ------- Table III lists the principal manufacturing establishments in the two-county area. The list includes all firms with 20 or more employees, excluding printing and publishing establishments. Of the 69 firms included, 28 are in food processing; 21 in lumber, plywood,and other wood products; 3 in pulp and paper; 3 in petroleum refining; and 3 in ship or barge construction. Most of the products of the remaining 11 firms are for the local economy. Table III, therefore, confirms the dependence of the area's economy upon-agriculture and. fishing and the processing of their products, timber-based products (including pulp and paper), and petroleum refining. ------- TABLE I EMPLOYMENT, BY INDUSTRY, NORTH PUGET SOUND AREA. (Skagit and What coin Counties) 4 Industry Agriculture Forestry and fisheries Mining Manufacturing, Total Lumber, wood prod., furn Primary -f- fabr. metals Machinery (incl. elec.) Other durables Food -processing Textiles and apparel Print, publ. Chemical and allied Pulp and paper Petroleum refin. ' Other nori-dur. , and misc Construction Transportation CommunicatioriS , Utilities Wholesale Trade Retail Trade Fin. , Ins . ,R.E. ', Bus. a Rep. Personal Services' Education Professional & related?*/ Public Administration Industry not reported Total, Emp. Civil. Lab. Force Unemployed Military TOTAL LABOR FORCE April Skagit - Co. 2,000 161 21 4-,307 .fix- 1,581 36 358 286 743 12 161 36 1252/ 82Gb/ 149c/ 1,360 - - 484 357 430 2,861 Serv. 754 1,142 '922 1,525 633 257 17,269 1,627 - 165 19,061 1960 Employment What com Co.' 2,670 300 24 4,566 1,165 112 120 . 615 1,017 73 317 "> L. 779d/ 287e/ 57c/ 1,927 764 821 732 4,138 1,215 1,906 1,902 1,750 861 326 23,902 2,163 223 26,288' Skagit + Whatcom Cos . 4,670 461 45 8,873 2,746 148 478 901 1,760 ' 85 478 60 904 1,107 - 206 3,287 ' 1,248 1,178 1 , 162 6,999 1,959 3,048 2,824 3,275 1 ,549 '583 41,171 3,790 388 45,349. April 1950 Empl. Skagit + What- coirr Cos. 6 , 9'02 781 255 . 7,376 3,892 124 230 509 1,469 35 358 39 600b_/ - 12 Oh./ 2,448 ' 1,335 1,052 962 6,026 1,887 2,104 1,582 2,029 1,386 575 36,700 2,608 301 39,609 Change in Empl. 1950- . I960 two Cos. -2,232 .- 320 - 210 +1,497 -1,146 + 24 + 248 + 392 + 291 + 50 -f- 120 -1- 21 + 304 +1,107 + 86 + 839 87 + 126 -' -200- - 973 82 + 944 +1,242 +1,246 . + 163 + ' 8 +4,471 +1,182 + 87 +5,740 a./ Estimate for .Scott Paper Mill at Anacortes. b/ Estimate for Shell (55,000 barrels/day) and. Texaco (45,000 barrels/day) refineries at Anacortes, assuming a ratio of 122 barrels/day per employee, which was the average for the State of Washington in 1960. £/ Estimat-:j as - a residual after deducting pulp and paper and petroleum refining from U.S. censu:; figure for "other non-durables"- group. G_/ Esrima'ce for' Georgia-Pacific (formerly Puget Sound Pulp ar.d Timber) plant az Beliingham, based upon "covered employment" statistics for Whatccm County. e_/ Estimate for Mobil refinery at Ferndale (35,000 barrels/day), assuming a ratio of 122 barrels/day par employee, the State average in 1960. ~L: Ir.cludes private household workers, other personal services and entertainment and recreation. ' * -. £/ Includes hospitals, welfare, religious3 non-profit organizations, professional anc related. v/.?=-inated. ------- TABLE II PERCENTAGE -DISTRIBUTION OF EMPLOYMENT, BY INDUSTRY NORTH PUGET SOUND AREA (SKAGIT AND WHATCGM COUNTIES) Industry Agriculture Forestry & fisheries Mining Manufacturing, Total Lumber, wood prod. , furn. , fix. Primary an'd fabricated metals Machinery (including electric) Other durables Food processing. Textiles and apparel Printing, publishing Chemicals and allied Pulp and paper Petroleum refining Other non-durables, and misc. Construction. Transportation Communications, Utilities Wholesale Trade Retail Trade ' . Fin., Insur. , R. E. , Bus. and Repr. Serv. Personal Services _/ Education Professional and related ^/ Public Administration Industry not reported Total Employed, Civilian Labor' Force Unemployed Military TOTAL LABOR FORCE gkae , t . April 1950 17.4% 2.0 .6 18.6 9.8 . .3 .6 1.3 ' 3.7 .1 .9 .1 + What comb Go's. April 1960 10.3% 1.0 .1 19.6 6.1 .3 1.1 2.0 3.9 .2 1.1 .1 . 1.5 2.0 - s.1 2.4 .3 ' .4 6.2 3.4 2.7 2.4 15.2 4.8 5.3 4.0 5.1 , 3.5 1.4 92.6 6.6 .8 100.0 7.2 2.8 ' 2.6 2.6 15.4 4.3 6.7 6.2 7.2 3.4 . 1.3 90.7 8.4 .9 100.0 U. S. April I960 6 . 1% .1 .9 25.1 1.5 3.6 4.4 4.6 2.6 3.1 1.6 1.2 .7d/ .2d/ 1.6d/ 5.5 3.9 2.5 3.2 13.7 6.2 6.2 4.S 6.0 4.6 3.7 92.5 5.0 2.5 .100.0 a./ Less than .05 per cent. b/ Includes private household workers, other personal services, and entertain- ment and recreation. c/ Includes hospitals, welfare, religious and non-profit organizations, professional and related. d7 Estimated from data for 1960 from 1951 Annual Survey of Manufactures, U. S. Bepr. of Commerce, Nov. 1962. ------- TABLE III PRINCIPAL MANUFACTURING ESTABLISHMENTS, NORTH PUGET SOUND AREA,-1964 Manufacturing Establishments in Skagit and Whatcom Counties With 20 or more Employees, by S.I..C. Class ' . S.I.C. Class Industry 20 Food Processing 24 Lumber and Wood Products City Anacortes Anacortes Anacortes Anacortes Anacortes Anacortes Bellingham Bellingham' Bellingham Bellingham Bellingham Bellingham Bellingham Blaine Burlington Burlington Burlington Burlington Ever son LaConner LaCormer Lynden Lynesn i>:to Vernon H-;.. Ver.ion Mto Vernon Mt . Yerrton Mt . Vernon Anacortes Anacortes Bellingham Bellingham Bellingham Bellingham Bellingham Bellingham Bellingham Bellingham Concrete Concrete Concrete Concrete Firm Name Farwest Fisheries Fi sherman ' s Pack ' g Me Dug I e Wagner Dairy . McGregor Seafoods Morgan & Morgan Sebastian & Stuart Bellingham Baking Bellingham Canning Bornstein Seafoods Bumble Bee Seafoods Dahl Fish Co0 Hillview Dairy What com Co. Dairyrusn Alaska Packers Cascade Froz. Foods Natlo Fruit Canning N. W0 Darigold Consol. Dairy Kale Canning Moore, R. V. San Juan Is Cannery Breyer Ice Cream Lynden Berrygrowers Carnation Co^ Consolidated Dairy Frigid Food Prod. Libby;McN.5 & Libby Stokely VanCamp Anacortes Veneer Pioneer Shingle Brooks Lumber Haley Int ' 1 Corp. lit, Baker Plywood Mt. Shukson Veneer Oeser Cedar Co. Robinson Plywood Washington Loggers Ritchie Shake Mill Hum Shingla LeVaque Co., Skagit Veneer Hornbeck ores. Product Fish products Processed fish Ice Cream Fish. packing Oyster packing Fish products Baked products Canned Salmon Frozen fish Fish products . Frozen fish Ice Cream Milk., cheese Canned salmon Froz. fruit, veg. Froz. berries Oyster stev/ Butter, pov7d, milk Can. beans, beets Froz. fish petfood Can. vegs. I.Cr. ,froz. fruits Froz. berries Evap. milk Dairy Products Ficz. berries Froz,, foods Froz. berries , vegs. Plywood Cedar shakes Wood products Treated lumber Plywood Plywood Treated' poles Plywood Logging Cedar Shakes Cedar shakes Shakes - Lumber Logging No. of Enrol ov. 100-249 20-249s 20-49 20-99s 20-49 10-99s 50-99 50-99 20-99s 10-249s 50-99 20-49 100-249 50-249s 50-499s 50-99 . 20-49 . 100-250 50-99' 10-49s 20-49 500-25003 10-249s 50-249s 10-49s 4- 49 9s 100-499s 50-999s 500-999 20-49 50-99 20-49 100-250 20-49 20-49 100-249 20-49 20-49 20-49 10-493 20-49 20-49 (Continued) ------- TABLE IIl, cont'd S . I . C . Class Industry 26 Pulp and -Paper 28 Chemicals 29 Petroleum 32 Stone, -Clay & Glass Prods. 34 .Fabricated Metal 35 . Machinery 37 Transportation Equipment City Deming Ever son Hamilton Hamilton Mt . Vernon Sedro-Woolley Sedro-Woolley Anacortes Bellingham Bellingham Anacortes Anacortes Anacortes Ferndale Bellingham Bellingham Bellingham Concrete Mt o Yernon Lynden Bsllingham Bellingham Sumas Sedro-Woolley Bellingham- Bellingham LaConner Firm Hame H.& H. Products-' Great Western Lumber Bridge Bros. Van de Grift Co, Witco. Co. Goodyear Nelson Willis R. & P. Scott Paper Co. Ga»Pacific (paper mill) Ga. Pacific (pulp trail) N.W. Petrochemical Shell Oil Texaco Oil Mobile Oil B'ham Bldgs« S.upp. Lir.d Gravel ' Permanent e Cement Lone Star Cement Mt. V. Sand & Gravel Whatcom Bldg. Supp,. Weldcraft Steel Weldit Tank & Steel Elebaas Co. Skagit Corp. B ' h am Sh ipy ar d s United Boatbuild'g Skagit Plastics . Product Shakes, shingles Lumber Lumber Logging Wood decor .access. Lumber Wood chips , lumber Pulp Tissue papers Pulp Phenol, cresol. Petrol. refining Petrol. refining Petrol. refining Concrete prod. Concrete prod. Cement Cement Concrete prod.. . Pre-cast concrete Boats , tanks Barges , tanks Tanks , mach ' y . ,-ioists, log. mach 'y Steel barges Fibreglass boats Fibreglass boats No. ot Employ. 20-49 50-99 20-49 20-49 20-99s 20-49 100-250 100-250 250-499 500-999 10-49s 500-999 250-499 250-49'9 50-99. 20-49 100-249 100-249 50-99 10-49s 10-493 20-49 20-49 250-499 20-499s 50-99 50-99 ;?l S.IcC. refers to the Standard Industrial Classification system of the U.- S. Census of Manufactures. Firms in the printing and publishing classification have been omitted from the above list, since they are not related to water supply problems, nor are they part of the "basic" or "export" employment of the area* s./ The letter "s" after the employment figures indicates that the range given includes a seasonal variation,. Source: Wash. State Dept. of Commerce and Ec0 Development, Directory of Wash. State Manufactures, July1964o ------- 8 2. Population The 41,559 jobs (civilian and military) itemized in Table I supported, as of April 1, 1960, a population of 121,435 in the two-county area. Table IV shows the allocation of this population among the cities and unincorporated parts of the area. For purposes of analysis, the sparsely inhabited eastern portions of the two counties have been separated from the more densely-settled urban and suburban portions along the Sound. The study area's population'increased by about 11,000 during the 1950-60 decade. Nearly all of this increase occurred in the relatively densely- settled western portion of the two counties, most of it in Skagit County. Areas of notable growth, were Mt. Vernon, Anacortes and Ferndale, the latter two showing the effects of the establishment there of petroleum refineries. B. Projected1 Economic Base and Population ' . 1. Factors Influencing Future Growth The future growth of the North Puget Sound Area will depend upon the further development and exploitation of the same basic resources and locational advantages that are now the support of the economy. Of these, no increase in the total harvest and processing of seafood is anticipated during the study period. It is also expected that the total timber harvest ^ will remain at about the present level or decline slightly, although useage will shift away from sawmills to pulp and plywood. There is a potential for increased agricultural production and, therefore, for a greater volume of fruit and vegetable processing and preparation of dairy products. The petroleum refineries at Anacortes and Ferndale have a total capacity equal to about 60 percent of present demand for gasoline in the Pu^et Sound area. Projected plants near Everett would, as assumed in the ------- previous Snohomish Basin Study, double this capacity by 1985. Growth in demand, and the extension of the area supplied to other portions of the Northwest, beyond the Puget Sound area, would permit further expansion at Ferndale and Anacortes. ------- 10 TABLE IV POPULATION, NORTH PUGET SOUND AREA, BY URBAN AND RURAL AREAS (Skagit and Whatcom Counties) .Place or Area a/ URBAN AND SUBURBAN PORTIONS, TOTAL ~ Skagit County Communities, Total Anacortes Burlington Hamilton LaConner Lyman ' Mt. Vernon Sedro-Woolley Suburban Whatcom County Communities, Total Bellingham Elaine Ever son Ferndale Lynden Nooksack Sumas Suburban NON-URBAN AND RURAL PORTIONS TOTAL -/ Skagit County Community Concrete Non-Urban or Rural Whatcom County Non-Urban or Rural TOTAL POPULATION - Two- County area - April. 1, 1950 . 103,884 40,320 19.064 6,919 2,350 294 594 378 5,230 3.299 21,256 63.564 40,271 34,112 1,693 345' 979 2,161 323 658 23,293 5.855 2,953 760 2,193 . 2,902 2,902 109,739 Apr i 1 1 , 1960 115.328 48 ;41 9 24,317 8,414 2,968 271 638 400 7,921 3.705 24,102 66,909 41.785 34,688 1,735 431 1,442 2,542 318 629 25,1-24 6.107 . 2,931 . 840 2,091 3,176 3,176 121,435 a/ Includes all of Skayit County except Census Divisions 1 and 2, and all of Whatcom County except Census Divisions 1, 2, and 12; this corresponds to the area designated as "densely populated" in the North Cascades study. b/ Includes Skagit County Census Divisions 1 and 2, and Whatcom County Census Divisions 1 and 2; this corresponds to the area designated as "sparsely popu- lated" in the North Cascades study. c/ Whatcom Census Division 12 (Point Roberts) is not included in the study area. ------- 11 2. Prelected Industrial Production On the basis of the factors indicated in general terms in the previous paragraph, the following rough projections, for planning purposes, are suggested for production in each of the principal industries in the North Puget Sound area: . a. Food processing.--Employment in food processing increased during the 1950-60-decade at an average rate of 1.8 percent per year. In- cluded within this category was some increase in processing of seafood. Since no future increase is being projected for seafood processing, the rate of in- crease during the study period is likely to be somewhat less than 1,8 percent. For purposes of this study, it is assumed that the volume of output at food processing plants (other than seafood) in the area will increase at about 1.5 percent per year,- a rate which would mean that 1985 volume- would have in-creased by about 50 percent as compared with 1960 and that 2010 volume would have about doubled, as compared with 1960. b. Pulp.--Even though no increase in total timber harvest in the area is anticipated, some increase in pulp production can-occur, through diversion to pulp jiaking of logs now used for Ixiinber, and through the greater utilization. of residues, wastes and marginal species. A negative factor for the outlook of pulp production in the area is the fact that, at present, a large share of the raw material for pulp making comes from British Columbia, in the form of chips. As the pulp capacity in British Columbia expands in the future, at least part of this supply may find a market within British Columbia itself. Nevertheless, t'.-.', diversion of logs away from sawmills and more efficient utilization should be able to support some expansion of output at the mill at Bellingham. For purposes of this report, it is assumed that output will increase during the study period at an average rate of about 1 percent per year, the same rate assumed in a previous report for growth in output at the mills at Everett. ------- 12 At this rate, output at Bellingham would increase from the present 470 tons per day to about 600 tons by 1985 and about 800 tons in 2010. There is a probability that the present pulp plant at Anacortes will be closed down in the future, and, for purposes of projecting future water needs and water ' pollution, it is assumed that by 1985 there will be no pulp production at that site. c. Petroleum refining.--Growth in demand is expected to justify expansion of refining capacity at Anacortes and Ferndale. For planning purposes, it is assumed that capacity at the three refineries in the area will double by 2010. d. Aluminum.--In 1964, International Aluminum Co. announced plans to construct an aluminum smelter at Ferndale. Selection of the site was based upon its deep-water ocean shipping facilities and the availability of low-cost < . ' . electricity. Initial capacity will be 20C tons per day. It is essumed that growth of markets will justify expansion of capacity in the future, and, for purposes of this study, it is assumed that output will be about 400 tons per day in 1985 and about 600 tons per day in 2010. e. Other Industries.--In addition to growth in the basic industries just described, it is assumed that diversified manufacturing in the area will increase, and that service industry employment will increase, not only absolutely but relative to "basic" or "goods" employment. 3. Projected Population.--While the previous section gives a broad indication of the industrial categories in which growth is likely to occur, no attempt has been made in this report to project employment in order to derive the future population that would be supported by the labor force. Rather, ------- 13 reliance has been placed on a ratio method for determining population, on the basis of trends in the area's percentage of Washington State population. The projection of Washington State population used here is that suggested in May 1964 by the Economics Subcommittee of the Columbia Basin Inter- Agency Committee. According to that projection, Washington State population would increase from-2.87 million in 1960 to 4.70 million in 1985 and 7.92 million in 2010. This would represent a rate of increase for the state of about 2.0 percent per year. The North Puget Sound Study Area has grown at a rate substantially below that for the state as a whole during recent decades. The average annual rate of increase for the study area during the 1930-60 period was about 0.9 percent, compared xvith about 2 percent for the state as a whole. It is expected that the study area will continue to grow at . a rate less than that for the state, although the disparity between the two rates will not be as'great in the future, due to the spread northward of growth from the Seattle Metropolitan Area. For purposes of this report, it is assumed that the study area's population will increase at a rate of 1.2 percent per year during the 1960-2010 period. At this rate, the population of the study area would increase from 121 thousand in 1960 to 163 thousand in 19S5 and 218 thousand in 2010.-/ The distribution of this projected population between the "urban- suburban" and "non-urban-rural" portions of the area shown in Table IV is expected to continue to be about as it is at present. For planning purposes, a/ This projection for the Skagit-Whatcom two-county area is the same as that adopted in the Columbia Basin Inter-Agency Conimittee's North Cascade Mountains Study, January 31, 1964, Table 1. ' ------- 14 it is assumed that the population of the area designated "non-urban and rural" will increase from 6.1 thousand in 1960 to about 7 thousand in 1985 and about 8 thousand in 2010. The remainder of the projected study area population would be in the "urban and suburban", portion; that is, about 156 thousand in 1985 and 210 thousand in 2010. No attempt should be made to forecast the future population of individual cities in the study area without economic base studies of the cities concerned. However, for planning purposes, it is suggested that a reasonable assumption would be that the individual cities in the study area will .grow at the average rate for the area as a whole; that is, about 1.2 percent per year. ------- |