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Panelists say Washington faces recession risk; emphasize workforce, trade exposure and local impacts
Summary
At the Rewire conference, panelists including the state commerce director, a state lawmaker, business leaders and a mayor said Moody’s warning about recession risk is plausible given stagnant job growth, trade exposure and fading federal COVID inflows, and urged policies to sustain workforce and investment.
A panel at the Rewire conference in Tacoma said Washington state is showing signs of economic strain and should not assume past prosperity will continue without deliberate policy action.
Libby Denkman, host of Sound Side on KUOW, moderated a discussion that included the state commerce director (introduced onstage as Jo Winn), State Representative April Berg (chair of the House Finance Committee), Rachel Smith of the Washington Roundtable and Dana Ralph, mayor of Kent.
The commerce director told the audience that while Washington has benefitted from decades of investment in higher education and advanced manufacturing, the state is "one of the states that is very trade exposed" and faces structural budget issues. "There are certainly issues that are causing some anxiety," the director said, describing Moody’s identification of Washington as among states on the verge of a recession as a "very good warning."
Rachel Smith said confidence among employers and households is shaky. She cited private survey findings and said, "41% of Washington employers say they do expect a recession in the next 12 months" and that roughly "80% of Washingtonians are concerned about their own personal financial situation," signaling consumers and employers are worried.
Mayor Dana Ralph gave a local view from Kent, saying communities with lower median incomes and lower property values have felt stress sooner. He pointed to rising vacancy rates and store closures and highlighted that for one entry-level IT posting the city saw 150 applicants in a single week—an indicator, he said, of local labor market disruption.
Rep. April Berg rejected the idea that Washington’s success was accidental, calling it "purposely prosperous" because of long-term investments. She cautioned that the sudden drop in pandemic‑era federal funding contributed to a spike and subsequent moderation in revenues and job growth, and added that federal uncertainty and policy headwinds keep businesses uneasy.
Panelists agreed on two practical vulnerabilities: energy constraints and workforce alignment. The commerce director said energy is a top siting factor for new investment and that building more reliable energy capacity would help the state compete for projects. Several speakers also warned that the coming changes from AI and other technological shifts will require workforce retraining and attention to the digital divide.
The panel closed with a range of predictions for 2026; most panelists expected a difficult year and urged deliberate, cross‑sector planning rather than rushed policy that could create winners and losers.
