Kitsap surviving despite poor economic times

Boeing’s announcement that it will lay off 30,000 — one-third of its Washington workforce — came close on the heels of news of failing dot-coms and falling tech stocks.

Those events portend hard times for the state economy, but regional experts say the effect in Kitsap County will not be as dramatic as in Seattle.

“In February we were told by Boeing that 600 employees identify Kitsap County as their place of residence,” said Zoltán Szigethy, executive director of the Kitsap Regional Economic Development Council.

If one third of them get laid off, that would mean 200 Kitsap residents could be out of work as a result of the Boeing cutbacks. A number of secondary jobs likely would be lost, too — clerks, bus drivers and other service employees.

“Put into context, it’s a hit but it’s not that great,” Szigethy said.

Kitsap County also is not as dependent on the tech industry as Seattle.

“I don’t feel we’ve been affected at all. We are a company that is five years old and we have already acquired five (Internet service providers) around here,” said Dan Wright, marketing manager for Donobi, a Web hosting firm in Silverdale.

Wright added that the company is “looking to move forward” despite the slowing economy.

Defense aid

Kitsap County’s dependence on federal jobs sometimes has been seen as a liability, but wartime means security for Kitsap’s largest employer.

“The Navy portion of the Kitsap economy seems to be bright for the next couple years, though we’ve worked on economic diversification,” said George Behan, a spokesman for U.S. Rep. Norm Dicks, D-6th District.

Even before Operation Enduring Freedom began, Puget Sound Naval Shipyard Public Affairs Officer Mary Anne Mascianica announced that PSNS had added 600 jobs in the previous fiscal year, and would be hiring at least 500 civilians a year for the next three to five years. About 8,100 currently are employed at PSNS, according to Behan.

“We are anticipating that we will convert retired Trident submarines into cruise missile carriers. Some of that work would be done at Puget Sound Naval Shipyard,” Behan said.

A new unmanned undersea vehicle test center at Naval Undersea Warfare Center Keyport also could boost hiring, Behan said.

Engineers, apprentices, and skilled laborers will be in demand and it is possible unemployed Boeing engineers will find placements in defense.

“Our Navy needs engineers,” Szigethy said. “I wouldn’t be surprised if some of those Boeing people will apply for, and be accepted in the defense industry.”

Tourism blues

Local hotels and other tourism-based businesses arguably were among the most harmed by the events of Sept. 11. The tourism industry is among the top five five employers in Kitsap County.

“Immediately after, for about two weeks, we were effected from the hotel side pretty dramatically — cancellations were up,” said Grant Griffin, the executive director of the Kitsap Peninsula Visitor and Convention Bureau (VCB).

Since then, VCB polls have shown business bouncing back. Hoteliers have reported that casual, non-business travel remains down, but government and military travelers are back, Griffin said.

Like other economic engines, if tourism lags it could cause a ripple affecting retail, restaurants and tourist attractions.

“It could trickle all the away down to needing less help in restaurant kitchens,” Griffin said.

Kitsap hotels also have lost out on expected revenue from the Seattle Mariners’ run at the World Series. Many hotels had planned to offer discounted rates and transportation to the ferry for fans who couldn’t find rooms on the other side of the Sound, Griffin said. But hotel vacancy is high in Seattle, and demand for extra rooms has declined.

On the bright side, research shows that people are staying closer to home for vacations and Kitsap County is well positioned to attract travelers from King and Snohomish counties, Griffin said.

Retail Sales

The fact that people are staying closer to home might actually be a boon to Silverdale retail outlets.

“We’re not very tourism-dependent,” said Dan Engelhard, general manager of the Kitsap Mall. “Because people are staying at home, they’re spending more at home. We think we’ll get a little boost for that.”

The mall’s September report shows sales have held steady, Engelhard said, and several Kitsap Mall department stores have reported sales are 10 points ahead of sister stores.

Best Buy, scheduled to open Oct. 26, also might provide a needed boost to the retail economy.

The store recently hired 130 people who are undergoing training, according to Lonny Schmitt, general manger of the Silverdale Best Buy.

Schmitt acknowledged that the store is opening in a “highly competitive market,” but said he is confident the store’s interactive displays, helpful staff and low prices will help it succeed.

Connie Stelter, a spokeswoman for Best Buy, said she trusts the company’s research.

“We’re not apprehensive, but we’re conscious of (the economic slump),” Stelter said. “I think that we have the plans, research and resources behind us to back how we pick our stores.”

U.S. Rep. Jay Inslee, D-1st District, said when evaluating the economy, people should not overlook how desirable Kitsap County is to live.

“It’s just beautiful. People want to live here and they will find a way to live here. We don’t think of those people as an economic boost, but they are,” Inslee said.

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