quality information. informed choices. the northwest economy … breaking out of recession? oregon...

Quality Information. Informed Choices.

The Northwest Economy … Breaking out of Recession?

Oregon City County Managers’ Association

Graham Slater

March 17, 2004


Key Facts …

• NW states are growing …• Natural resources and manufacturing are

still important to these states …• Employment declines appear to be over.• Employment gains are happening

only slowly.• Rural areas often struggle

economically.


Recession and Recovery in Oregon

Comparing with Washington

Looking to Future Workforce Needs

Note: Many Oregon comments apply very similarly to Washington.


Oregon’s unemployment rate fell to 7.1% in February -- the lowest level in two and a half years.

Seasonally Adjusted Unemployment RateOregon: 1990 - 2003

0%

2%

4%

6%

8%

10%

1990 1992 1994 1996 1998 2000 2002

Pe

rce

nt

of

La

bo

r F

orc

e


And the labor force is picking up again – the second highest level on record.

Oregon's Civilian Labor Force Hits All-Time High in July 2003!

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

Jan

-78

Jan

-80

Jan

-82

Jan

-84

Jan

-86

Jan

-88

Jan

-90

Jan

-92

Jan

-94

Jan

-96

Jan

-98

Jan

-00

Jan

-02

Jan

-04

Seasonally Adjusted


The number of unemployed has fallen by 30,000 … but remains 50,000 above pre-recession levels.

Number of Unemployed in Oregon1990 to 2004

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Jan

-90

Jan

-91

Jan

-92

Jan

-93

Jan

-94

Jan

-95

Jan

-96

Jan

-97

Jan

-98

Jan

-99

Jan

-00

Jan

-01

Jan

-02

Jan

-03

Jan

-04

Not Seasonally Adjusted Seasonally Adjusted


Oregon’s January rate was back to being the nation’s highest …

– Oregon's Jan 2004 rate = 7.7%. Ranks 1st nationwide.

– Rates ranged from 2.9% to 7.7%. The average was 5.1%; the midpoint of all 50 states was 5.0%.

– Highest rates: Oregon (7.7%), Alaska (7.3%), and Michigan (6.6%).

– Lowest rates: South Dakota (2.9%), North Dakota (3.0%), Delaware (3.4%).


For a variety of reasons, we’re consistently above the U.S. average.

Seasonally Adjusted Unemployment Rates Oregon and U.S.

0

2

4

6

8

10

12

14

Jan

-78

Jan

-80

Jan

-82

Jan

-84

Jan

-86

Jan

-88

Jan

-90

Jan

-92

Jan

-94

Jan

-96

Jan

-98

Jan

-00

Jan

-02

Jan

-04

Pe

rce

nt

of

La

bo

r F

orc

e

Oregon

United States


High and low unemployment rates were distributed in an unusual fashion in 2003.

Unemployment RateUnder 7%7 - 10%Over 10%

Oregon: Unemployment Rates by Area 2003 Annual Average


Portland’s unemployment rate has been hugely

impacted by the recession. Oregon 12 Month Moving Average Unemployment Rate

Portland vs. Rest of Oregon

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Portland Non-Metro (includes Benton) Eugene, Medford & Salem


Employment has been generally increasing since bottoming out in June 2003.

Seasonally Adjusted Employment in OregonTotal Nonfarm Payroll: 1990 - 2004

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

1990 1992 1994 1996 1998 2000 2002 2004

Em

plo

yme

nt


For only the second time in almost three years, employment is above year-ago levels.

Nonfarm Payroll Employment in Oregon: 1979-2004Same Month, Year-Over-Year Gains and Losses

-75,000

-50,000

-25,000

0

25,000

50,000

75,000

Em

plo

yme

nt

Ga

in /

Lo

ss

19791985 1990 1995 2000

Employment now 3,800 above year-ago.


… but we’re 40,000 down from three-year-ago levels.

Nonfarm Payroll Employment in Oregon: 1982-2003Same Month, Gains and Losses over Three Years

-200,000

-150,000

-100,000

-50,000

0

50,000

100,000

150,000

200,000

Em

plo

yme

nt

Ga

in /

Lo

ss

1985 1990 1995 2000


It’s really starting to look like maybe we’ve seen the worst of this recession.

Peak to Trough Employment LossOregon Recessions: Early 1980s; 1991; 2001-3?

-140,000

-120,000

-100,000

-80,000

-60,000

-40,000

-20,000

01

Em

plo

yme

nt

De

clin

e

November 1979 to December 1982

August 1990 to May 1991

November 2000 to June 2003?


Most industry groups have shown growth since employment bottomed out in June.

Employment Growth from Recessionary TroughJune 2003 -- February 2004

-1,000 0 1,000 2,000 3,000 4,000

Government

Leisure and Hospitality

Educational and Health Services

Professional and Business Services

Financial Activities

Trade, Transportation, and Utilities

Manufacturing

Construction

Natural Resources and Mining


Construction ended the year with strength.

Seasonally Adjusted Employment in OregonConstruction: 1990 - 2004

50,000

60,000

70,000

80,000

90,000

1990 1992 1994 1996 1998 2000 2002

Em

plo

yme

nt


Manufacturing – growing six of the seven last months.

Seasonally Adjusted Employment in OregonManufacturing: 1990 - 2004

150,000

170,000

190,000

210,000

230,000

250,000

1990 1992 1994 1996 1998 2000 2002

Em

plo

yme

nt


Professional and business services is looking stable.

Seasonally Adjusted Employment in OregonProfessional and Business Services: 1990 - 2004

100,000

120,000

140,000

160,000

180,000

200,000

1990 1992 1994 1996 1998 2000 2002

Em

plo

yme

nt


The private sector has added 10,000 jobs since bottoming out.

Seasonally Adjusted Employment in OregonTotal Private Sector: 1990 - 2003

800,000

1,000,000

1,200,000

1,400,000

1990 1992 1994 1996 1998 2000 2002 2004

Em

plo

yme

nt


Government employment has stabilized, following job losses in 2003.

Seasonally Adjusted Employment in OregonGovernment: 1990 - 2003

200,000

210,000

220,000

230,000

240,000

250,000

260,000

270,000

280,000

1990 1992 1994 1996 1998 2000 2002

Em

plo

yme

nt


The slowdown in computer-related manufacturing employment seems to have leveled off.

Computer and Electronic Equipment ManufacturingOregon: 1990 - 2004

0

10,000

20,000

30,000

40,000

50,000

60,000

1991 1994 1997 2000 2003

Em

ploy

men

t


After declining in 2001, average wages picked up slightly in 2002.

Average Annual Wages in OregonInflation-Adjusted: 1975 - 2002

$27,000

$28,000

$29,000

$30,000

$31,000

$32,000

$33,000

$34,000

$35,000

1975 1978 1981 1984 1987 1990 1993 1996 1999 2002

Year

An

nu

al

Wa

ge

Adjusted to 2002 dollars, using Portland CPI-U

$34,474$33,685


Washington’s Economy:• Historically, Washington’s economy has been

known for its agriculture and forest products industry. Washington is still the number one apple producing state in the union.

• Since World War II, when the federal government established defense industries in Washington, manufacturing has grown quickly to become a leading industry in Washington.

• By the 1990s Washington’s economy had become quite diverse with growth in tourism related industries as well as computer and software industries.


Washington’s nonfarm employment is prone to some downturns from time to time, similar to other northwest states and the nation.

Washington Nonfarm Payroll Employment 1939-2002 (Annual Average)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1939 1943 1947 1951 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999

Empl

oym

ent


After a prosperous decade in the 1990s, Washington’s employment took a downturn during the recent recession.

Washington Seasonally Adjusted Nonfarm Payroll Employment (Year-over-Year Change)

1991-2003

(100,000)

(50,000)

0

50,000

100,000

150,000

1991 1993 1995 1997 1999 2001 2003

Ye

ar-o

ver

-Yea

r G

ain

/Lo

ss


Washington’s manufacturing sector struggled this past year, but growth in other sectors was enough to make total nonfarm employment growth positive.

Washington Nonfarm Employment December 2003: Comparison with One Year Ago

-16,000 -12,000 -8,000 -4,000 0 4,000 8,000

Total Nonfarm Payroll

Natural Resources and Mining

Construction

Manufacturing

Trade, Transportation, and Utilities

Information

Financial Activities

Professional and Business Services

Education and Health Services

Leisure and Hospitality

Other Services

Government


Similar to other northwest states, Washington’s unemployment rate is high during national recessions.

Washington and U.S. Unemployment Rate (Seasonally Adjusted) 1978-2003

0%

2%

4%

6%

8%

10%

12%

14%

1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

Un

emp

loym

ent

Rat

e

United States

Washington


According to forecasts, Oregon has hit bottom … but we don’t regain all the jobs until 2Q05.

Quarterly Employment, History and ForecastOregon: 1998 -- 2011

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

1998:1 2000:1 2002:1 2004:1 2006:1 2008:1 2010:1

To

tal N

on

farm

Pa

yro

ll E

mp

loym

en

t Note: employment regains pre-recession level in 2Q05

Note: employment bottoms out in 3Q03 Source: Office of Economic Analysis,

Department of Administrative Services


How does Washington’s economic future look?

• Despite recent losses in the manufacturing sector, manufacturing will maintain its vital presence in Washington over the long run. Washington’s “high-tech” manufacturing sector will continue to prosper.

• Some of the more mature natural resource based manufacturing sectors, such as lumber and aluminum, will continue to decline over time due to escalating production costs and national and international competition.


Washington’s employment will continue to grow. However, it will be slower than past growth.

Growth will be slower than the historic trend.

Nonfarm Employment History and Forecast Washington: 1970-2020

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Year

Em

ploy

men

t

Nonfarm EmploymentLinear (Nonfarm Employment)

Source: Long-Term Economic and Labor Force Forecast, Office of Finanacial Mangment


In Oregon, services industries are expected to have the most rapid job growth in the next ten years.

Which broad industries are expected to have the most rapid job growth?

0% 5% 10% 15% 20% 25%

Services

Wholesale Trade

Finance, Insurance, and RealEstate

Retail Trade

Transportation and PublicUtilities

Construction and Mining

Government

Manufacturing

Percent Change, 2002-2012


Health services tops the list of industries adding jobs.

Which industries are expected to add the most jobs?

0 10,000 20,000 30,000 40,000

Health Services

Business Services

Eating and Drinking Places

Social Services

Wholesale Trade - Durable

Local Government - Non-Education

General Merchandise Stores

Local Government - Education

Engineering and Management Services

Real Estate

Forecast Job Growth, 2002-2012


Health services is also the most rapidly growing industry.

Which industries are expected to have the most rapid job growth?

0% 5% 10% 15% 20% 25% 30%

Health Services

Business Services

Educational Services

Amusement and Recreation Services

Social Services

Engineering and Management Services

Wholesale Trade - Durable Goods

Real Estate

Home Furnishings

Ag Services

Forecast Job Growth Rate, 2002-2012

*Excludes industries employing less than 3,000 in 2002.


Some traditional industries are losing jobs.

Which industries are expected to lose jobs?

-1,800 -1,600 -1,400 -1,200 -1,000 -800 -600 -400 -200 0

Lumber and Wood Products

Food Processing

Primary Metals

Paper and Allied Products

Apparel Products

Railroads

Misc. Repair Services

Transportation Services

Textile Mill Products

Fishing, Hunting, Trapping

Forecast Job Loss, 2002-2012


Looking out ten years, all occupational groups in Oregon are expected to show growth.

Oregon Employment by Occupational Group, 2002 and 2012

0 50,000 100,000 150,000 200,000 250,000 300,000

Farming, Fishing, and Forestry

Installation, Maintenance, and Repair

Construction and Extraction

Health Care

Transportation and Material Moving

Production

Management, Business and Financial

Sales and Related

Service

Professional and Related

Office and Administrative Support

2002 Employment 2012 Employment


Employers will fill more positions with workers leaving the occupation than from new positions created.

Oregon Projected Employment Openings 2002-2012

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000

Farming, Fishing, and Forestry

Construction and Extraction

Installation, Maintenance, and Repair

Health Care

Management, Business and Financial

Production

Transportation and Material Moving

Professional and Related

Sales and Related

Office and Administrative Support

Service

Growth Openings Replacement Openings


For more information:

• Graham Slater– (503) 947-1212– [email protected]

• Visit our web site at: www.QualityInfo.org

• Contact the “labor market information” staff in your state. (E-mail me … I’ll put you in touch!)

quality information. informed choices. the northwest economy … breaking out of recession? oregon...

Documents

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