oregon economic forecast presentation

7/31/2019 Oregon Economic Forecast Presentation

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OregonQuarterly Economic & Revenue

Outlook Mark McMullen & Josh Lehner

Office of Economic Analysis

Bill Conerly

Conerly Consulting August 29, 2012



OregonU.S. Economy



Handoff: Housing &Manufacturing

3

30

35

40

45

50

55

60

65

70

-30%

-20%

-10%

0%

10%

20%

30%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Economic Drivers

Recession Residential Investment (Y/Y, Left) ISM Manufacturing (Right)



Universal Pessimism:Recent economic forecasts, % change

1.0%

1.5%

2.0%

2.5%

3.0%

FOMC GlobalInsight PhillyFed BlueChip WSJSurvey OEA WesternBlue

Chip

U.S.RealGDP OregonEmployment

2012GrowthForecasts

3MonthsAgo Today

1.0%

1.5%

2.0%

2.5%

3.0%

FOMC GlobalInsight PhillyFed BlueChip WSJSurvey OEA WesternBlue

Chip

U.S.RealGDP OregonEmployment

2013GrowthForecasts3MonthsAgo Today



The State of Oregonin an

Uncertain EconomyDr. Bill Conerly

for

Senate Finance & Revenue CommitteeHouse Interim Revenue Committee

August 29, 2012



0

1

2

3

4

5

6

7

1950 1960 1970 1980 1990 2000 2010 2 0 - q u a r t e r r

o l l i n g s t a n d a r d d e v i a t i o n

GDP CyclicalityData through 2012q2



Old

New

-4

-3

-2

-1

0

1

2

3

4

2007 2008 2009 2010 2011 2012 2013 2014 2015

% c

h a n g e

GDP Growth Forecasts



Old

New

-4

-3

-2

-1

0

1

2

3

4

2007 2008 2009 2010 2011 2012 2013 2014 2015

% c

h a n g e

GDP Growth Forecasts

Recession Risks

Europe

China

Fiscal Cliff Uncertainty



Managing in an

Uncertain Economy

Sales: shorten information time lags

Finance: more working capital, lessleverage

Employees: more contractors, fewer

permanent

Capital projects: modular, flexible (product

& batch size)



OregonOregon Economy



11

• 8.7% unemployment rate for Jul 2012 (Jun US rate is 8.3%) is downfrom 9.6% a year ago in Jul 2011 and down 2.9% from recession highs.

• 26th fastest job growth at 1.0% for all states for Jul 2012 over Jul 2011. •

Total nonfarm employment increased 0.7% year-over-year for the 2nd

quarter of 2012. Total nonfarm up 44,200 since Feb 2010 with theprivate sector up 50,500.

• 3.0% personal income growth for 1st quarter of 2012 over 1st quarter of 2011. Annualized 1st quarter 2012 growth at 3.4%.

• Oregon exports through June 2012 are down 5.1% from a year ago. – Computer and Electronic Products: -11%

– Agricultural Products: -21%

– All Other: +5%

Recent Oregon Economy Facts



-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

China &Malaysia

Eurozone Total Japan & S.Korea

Other Asia All Other North America Other Europe

Oregon Export Growth, Top 50 Countries

2010 2011 2012 June YTD

29% 8% 15% 15% 8% 19% 4%

The International Slowdown is Here



Housing No Longer A Drag

-4,000

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

Jan-91 Jan-94 Jan-97 Jan-00 Jan-03 Jan-06 Jan-09 Jan-12

Housing and Related IndustriesRecession Monthly Gain 12 Month Moving Average



Public Sector Cuts

-12%

-9%

-6%

-3%

0%

3%

6%

9%

12%

15%

Feb-08 Feb-09 Feb-10 Feb-11 Feb-12

Employment Change (Feb '08 - Jul '12)

Private Sector

State Gov Non-Educ

State Education

Local Gov Non-Educ

Local Education

+4,237

+416

+331

-6,497

-99,900



OregonRevenue Outlook



16

PIT Collections Remain Healthy

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

2010 2011 2012

RecentPersonalIncomeTaxCollec:ons

%changeoveryearago,3monthmovingsum



17

Corporate Collections: Has theBleeding Stopped?

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Jan

2011

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

2012

Feb Mar Apr May Jun Jul

CorporateIncomeTaxCollec:ons

%changeoveryearago,3monthmovingsum



1818

Outlook Stable for BN2011-13Forecast Evolution, Dec 2010 to Sept 2012

$14.5

$14.6

$14.7

$14.8

$14.9

$15.0

$15.1

$15.2

$15.3

Dec 2010Forecast

Mar 2011Forecast

May 2011Forecast

Sept 2011Forecast

Dec 2011Forecast

Mar 2012Forecast

Jun 2012Forecast

Sept 2012Forecast

Combined General Fund and Lottery Fund Revenues (2011-13 BN)

Close of Session and Feb 2012 Rebalance

Forecast



1919

Forecast ChangesDifference from June forecast, $ millions

71

-319

-399

-471

-578

-$700

-$600

-$500

-$400

-$300

-$200

-$100

$0

$100

$200

2011-13 2013-15 2015-17 2017-19 2019-21

Personal Corporate Lottery Other Total



20

2.5

3.5

4.5

5.5

6.5

7.5

8.5

9.5

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Personal Income Tax Collections (September 2012 Forecast)

PIT Collections Excluding Kicker

PIT Collections (June 2012 Forecast)

Personal Income Tax Forecast$ billions, 4 quarter moving sum

2011-13+$36.7(million)

2013-15-$219.5

2015-17-$310.1

2017-19-$418.2

2020-21-$479.2



21

150

200

250

300

350

400

450

500

550

600

650

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Corporate Income Tax Collections(September 2012 Forecast)

Corporate Income Tax Collections(June 2012 Forecast)

Corporate Income Tax Forecast$ millions, 4 quarter moving sum

2011-13+$28.1(million)

2013-15-$27.2

2015-17-$19.4

2017-19-$29.2

2019-21-$55.7



22

September Forecast Summary

Table R.1

2011-13 General Fund Forecast Summary

(Millions) 2011 COS Forecast June 2012 Forecast September 2012 ForecastChange from Prior

ForecastChange from COS

Forecast

Structural Revenues

Personal Income Tax $12,193.6 $11,919.9 $11,956.6 $36.7 -$236.9

Corporate Income Tax $894.2 $814.5 $842.6 $28.1 -$51.7

All Other Revenues $944.2 $1,098.5 $1,121.8 $23.2 $177.6

Gross GF Revenues $14,032.0 $13,832.9 $13,921.0 $88.0 -$111.0

Administrative Actions1 -$23.1 -$14.1 -$4.4 $9.7 $18.7

Legislative Actions $0.0 $0.0 $0.0 $0.0 $0.0

Net Available Resources $14,008.9 $13,818.9 $13,916.6 $97.7 -$92.3

Confidence Intervals

67% Confidence +/- 4.0% $552.0 $13.37B to $14.47B

95% Confidence +/- 7.9% $1,104.0 $12.82B to $15.02B

1 Reflects cost of cashflow management actions, exclusive of internal borrowing.



23

10-Year Forecast

General Fund Revenue Forecast Summary (Millions of Dollars, Current Law)

Forecast Forecast Forecast Forecast Forecast Forecast

2009-11 % 2011-13 % 2013-15 % 2015-17 % 2017-19 % 2019-21 %

Revenue Source Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg

Personal Income Taxes 10,467.2 3.7% 11,956.6 14.2% 13,416.9 12.2% 15,069.0 12.3% 16,638.4 10.4% 18,405.7 10.6%

Corporate Income Taxes 827.6 20.9% 842.6 1.8% 1,070.8 27.1% 1,083.7 1.2% 1,056.6 -2.5% 1,081.7 2.4%

All Others 1,226.6 29.8% 1,121.8 -8.5% 967.2 -13.8% 1,025.8 6.1% 1,096.6 6.9% 1,184.4 8.0%

Total General Fund 12,521.4 6.8% 13,921.0 11.2% 15,454.8 11.0% 17,178.5 11.2% 18,791.6 9.4% 20,671.8 10.0%

Kick er Distribu tions - - - - - -

Total Revenue 12,521.4 -2.2% 13,921.0 11.2% 15,454.8 11.0% 17,178.5 11.2% 18,791.6 9.4% 20,671.8 10.0%

Other taxes inc lude General Fund portions of the Eastern Oregon Severance Tax , Western Oregon Severance Tax and Amusement Dev ice Tax .

Commercial Fish Licenses & Fees and Pari-mutual Receipts are included in Other Revenues



2424

Biennial Revenue Growth

-12%

-8%

-4%

0%

4%

8%

12%

16%

20%

24%PIT TOTAL



25

For More Information

Standard Contact:

155 Cottage Street NE

Salem, OR 97301

(503) [email protected]

www.oregon.gov/das/oea

Social Media:oregoneconomicanalysis.wordpress.com

@OR_EconAnalysis

oregon economic forecast presentation

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