The Backyard Economy: Washington

To gauge the health of the Washington state economy, look to the skies. The state is currently outperforming the rest of the nation largely due to the strength of its massive aerospace manufacturing base.

Last year, nearly two-thirds of the state gross domestic product was attributed to transportation exports, primarily sales in Asia.

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Boeing, one of the world's largest airplane manufacturers, has a large part of its commercial aircraft operations based in Washington.

"The main reason that the state has been growing much more rapidly than the rest of the nation is the aerospace industry. When Boeing is doing well, we tend to outperform," said Bret Bertolin, the senior economic forecaster for the state.

Boeing's success is shared by the state, because it is one of the biggest and best-paying employers. Despite production delays of its new 787 jetliner, there is little doubt the company continues to expand and will hire more employees.

And while the decline in the value of the dollar has led to higher costs for imported goods, it has made Boeing's planes more competitively priced overseas.

"A low dollar helps exports," Bertolin said. But he warned that "an international downturn would be bad. Big items -- like airplane orders -- can certainly be canceled when bad things happen to the world economy."

In the meantime, Washington's state unemployment rate has stayed mostly steady for the past year and only recently saw an increase in March.

"We're catching up with the rest of the country," said Ivars Graudins, a state labor economist. "But we're still doing relatively well in relation to other parts of the country."

Graudins attributed the rise in joblessness to shrinking payrolls in construction and financial activities that have been affected by the national housing crisis.

Seattle-based bank Washington Mutual has struggled in the midst of the recent financial crisis. Since last year, it has announced thousands of companywide layoffs and plans to shut down home loan centers.

The state's economic tides are also influenced by Microsoft. Computer software and other related jobs bring hefty salaries and boost wages, which in turn, spurs in-state activity via the service-producing sectors.

Washington's real estate market has been relatively safe, unlike many of its regional counterparts.

Glenn Crellin, who leads the Washington State University Center for Real Estate Research, noted that prices have been largely protected by steady employment opportunities that can match a controlled supply of housing so far.

Crellin said there is not a lot of "speculative" building within the state. For the most part, the state is watching how the rest of the country will find its way out of its housing mess.