Thursday, Portland State University Northwest Economic Research Center released its economic forecast for 2019. The report took a top-down approach to Oregon’s economy, examining a range of national and statewide trends, as well as factors specific to the metro area of Portland.
“Portland MSA Economic and Population Outlook,” written by economist Tom Potiowsky, revealed that Oregon’s economy was in full swing. But it also contained less auspicious news: Roaming, commerce, and automation all present challenges and opportunities for Oregon’s economy.
Here are 10 takeaways:
1. Overall, Oregon’s economy is doing well.
It has been a decade since the Great Recession, a national economic crisis caused by the subprime mortgage crisis. Oregon has experienced continued economic growth since June 2011, the result of national economic stimulus efforts. If Portland’s economy continues to add jobs throughout the summer, it would be the city’s longest job expansion on record.
While most of Oregon’s economic gains have followed national trends, there are some areas where Oregon has taken the lead. Construction jobs jumped 7.5% last year, compared to the national average of around 4%. Oregon’s thriving tech sector was also above the national average, as were earnings in financial, professional and business services.
The leisure and hospitality sector has grown surprisingly slowly, lagging behind the national average despite performing well in Clark and Yamhill counties.
Real wages also rose about 5% in 2018, meaning Oregonians were able to participate in shared prosperity, at least for the most part.
2. The boom is expected to slow down soon, with a possible return to recession.
While growth has been supported by the federal stimulus package, recent activity at the federal level threatens Oregon’s booming economy. The Trump administration’s increase in tax spending has likely run its course and could now prove to be a drag on the economy, as the revenue generated was short-term.
The administration is now considering a new spending program as part of the electoral cycle. Since the economic gains from tax cuts have already materialized, the budget deficit is a likely outcome.
The second risk is that the Federal Reserve will raise interest rates as the global economy strengthens. By 2020, the Fed expects rates to hit 3%, which will slow fast-growing economies like Oregon.
Another factor to consider is the nativist bent at the national level, which targets both skilled and unskilled foreign talent. The administration’s trade war with China could also create an economic slowdown in Oregon, as in other states, slowing growth and potentially leading to a recession.
The bottom line is that Oregon’s economy is quite closely aligned with national trends overall, so national policies (good and bad) tend to have a lot of impact. And speaking of national trends with the potential to have a big impact …
3. Autonomous trucks could reshape the economy.
Automation has already had a big impact in the manufacturing industry. Between 1990 and 2018, manufacturing jobs fell by almost 27%, while manufacturing output increased by 72.3%. The drastic change can be almost exclusively attributed to computers and technical automation, trends that show little sign of slowing down.
Our economy is now on the threshold of self-driving trucks, which have already started operating in some cities across the country. Truck driving is the most common occupation in Oregon, with more than 34,000 truckers employed across the state.
Automating truck driving would not only drastically reduce the number of truck drivers on the road, but would also affect the roadside economies that revolve around truck drivers, like motels and gas stations.
While it may seem like the distant future, Daimler Trucks North America plans to hire 200 workers to develop self-contained semi-trailers. Most of them will work at its headquarters in Portland.
Before saying goodbye to your favorite roadside restaurant, the report mentions various legal and practical obstacles that driverless trucks still face, including issues of safety and reliability.
The study goes on to mention similar concerns about the profession of bank teller with the advent of the ATM, which has been found to evolve the profession rather than directly replacing it.
4. Government solutions to homelessness have failed.
In 2017, one in five people in the Portland metro area reported having been personally homeless at some point in their life. Additionally, in January, the report found 3,400 families living without a permanent housing solution, and these numbers only reflect families that have been documented.
The news is getting worse, as the report found that the impact of government rent controls and affordable housing efforts had negligible effects on solving the homeless crisis.
The report attributes the inefficiencies to ineffective rent ceilings and high landlord exemption rates. While falling rental prices correlate with lower levels of homelessness, attempts by governing bodies to change the market have been and will continue to be “unsuccessful”.
The study concluded that the state legislature’s passage of the SB608 Rent Control Bill would not likely affect homelessness in a powerful way. There are, however, reasons to be hopeful …
5. Housing subsidies can effectively tackle homelessness.
The study found that government housing assistance, like accommodation choice checks or other rent subsidies, effectively reduce the roaming rate for participants.
The report found that universal rent assistance was a powerful tool in easing the financial burden on potential homeless people, but also found that a holistic approach would also require funding for shelters and transitional housing.
What’s more, the study found that the best way to prevent homelessness is to stop it before it begins by meeting the needs of at-risk households before their financial burdens overwhelm them. While this approach may seem too little too late, the study worryingly found that 50,000 metro residents were at risk of becoming homeless.
Government and nonprofit actions will be needed to end the epidemic of homelessness. The business community also has a vested interest in helping homeless people become stable job seekers, which brings us to number six …
6. We could achieve full employment anytime (and maybe already).
Job growth has started to slow as the economy moves closer and closer to full employment.
Full employment does not mean that everyone who wants a job has one, but only that the cyclical reasons for unemployment have been alleviated, leaving only those who voluntarily quit their jobs, those who do not have the skills to do so. fill available positions and those facing discrimination.
Slow job growth rates indicate that businesses are feeling the pressure. While a low unemployment rate is a good thing, as it means that those looking for a job will have more opportunities, once unemployment gets too low, companies might struggle to find workers with the skills. that they need.
7. No surprise here: Amazon has transformed our spending habits.
Product clearing and distribution centers, like those used by the Amazon e-commerce platform, have had a big impact on the Oregon economy. Transportation, warehousing and utilities saw a 3.3% increase in employment growth, fueled largely by Amazon’s fulfillment centers in Oregon.
Retailing has also suffered from competition from Internet sales. Despite the nation’s booming economy, retail jobs grew only 0.5% in Oregon.
8. The housing market has returned to pre-recession levels, but lessons have been learned from the last time.
Oregon’s real estate market has returned to pre-recession levels, but housing permits have started to level off, unlike what happened during the 2008 financial crisis, when permits soared well beyond sustainable levels.
The report also states that the “house flip” has reached levels not seen since the peak of the real estate boom of 2006. While the news may raise alarm bells, the report notes that the “pinball machines” have a different financial profile this time around. here and are less likely to wreak economic havoc.
9. There are a ton of immeasurable factors that could come into play.
The report ends with a myriad of factors that could affect Oregon’s economy in the years to come. These unknowns include potential benefits, like the planned expansion of Intel and Adidas, and precarious perils, like potential new tariffs. The report also mentions climate change, noting that while climate change has already had economic consequences, it will likely have an effect that will intensify over time.
And finally, for a little feel good at the end of this great read …
10. Oregonians love to read.
Maybe living close to nature sparks the imagination, or maybe Oregonians love Powell’s Books, but publishing took off in Oregon last year, despite a general decline in the world. nationwide.
While printing is by no means booming in Oregon, it has proven to be more resilient than the country as a whole, possibly indicating a cultural soft spot for the industry.
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