A new business report from Challenge Seattle warned the region is losing its competitive edge and identified the factors driving the decline.
The central Puget Sound region lost nearly 7,000 jobs in 2025, and job growth stalled in 2023, according to Challenge Seattle, an alliance of 23 organizations representing some of the city’s largest employers.
Challenge Seattle noted Washington’s overall business ranking fell from 1st to 11th since 2017, and that Washington has the lowest five-year business survival rate of any state.
‘The warning signs are clear’: Report blames rising costs, unpredictable taxes for business decline
Key drivers of business decline include faster-paced tax changes that make it harder to plan, invest, and make long-term decisions; rising operating and compliance costs; expensive housing and childcare for workers; and a less welcoming business culture, according to the report.
“The warning signs are clear,” Challenge Seattle CEO and former Washington Governor Christine Gregoire stated in the report. “Puget Sound lost jobs, marking the first time in two decades that regional job growth has trailed the nation. Washington’s cost-of-doing-business ranking has fallen from 32nd to 47th.
“Employers and residents alike tell us it has become too difficult to build, too expensive to operate, too unpredictable to plan, and too unaffordable for workers and families,” she continued. “This moment calls on us to act together with greater focus, guided by two principles: restoring our competitiveness and building partnership.”
‘A plan alone will not change our trajectory’: Challenge Seattle urges counties to unite on economic vision
The report listed a set of goals to drive business back to the region, such as each county working together to have a unified voice and economic vision, establishing business concierge services in every city, developing a fairer and more predictable tax strategy, establishing clear permit timelines, working with local colleges to establish a stronger talent pipeline, and scaling the Puget Sound commercial space ecosystem, among others.
“It is not a city, county, or state economic plan, but a shared plan for our entire region,” Gregoire stated. “Some recommendations can be launched within weeks or months, and all can begin or make meaningful progress within three years. A plan alone will not change our trajectory.
“Success will require leaders across the region to take ownership, sustain the partnership, measure progress, and follow through, especially on the highest-priority recommendations with the greatest potential to strengthen our economic trajectory,” she continued.
The report comes less than a week after 35 major players in Seattle’s business community signed a letter urging Seattle Mayor Katie Wilson and the Seattle City Council to take action on public safety, many of whom are part of Challenge Seattle.
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