The number of nonfarm employees in Oregon recently surpassed its mid-2000s peak. Even manufacturing jobs, which were shredded by the downturn, have begun a comeback.
Six years ago, the Great Recession hit Bend in Oregon’s high desert so hard that the unemployment rate reached 15.5 percent.
Until the collapse, Bend had enjoyed one of the country’s top growth rates, thanks to its resorts, recreation and lure to retirees. Homebuilding soared, including large numbers of luxury houses. By 2009, according to an Associated Press account, some residents were calling it “poverty with a view.”
But Bend has turned up. As of January, it had made up almost all its recessionary job losses and is now enjoying some of the strongest job growth in the state. From July 2013 to July 2014, it was the nation’s seventh fastest-growing metro, at 2.7 percent.
This is a significant shift for Oregon, which suffered the hardest blows from the recession in the Northwest. And although Portland recovered fairly well, most of the rest of the state struggled. Now smaller metro areas and even parts of rural Oregon are getting traction, too.
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As a result, Oregon’s economy is outperforming most states, although not quite at Washington’s level because it lacks the robust boom happening in metropolitan Seattle.
“Things are doing a lot better today than just a year ago, no question about that,” said Josh Lehner, a state economist. “We’re getting close to full-throttle economic growth.”
The momentum, which has been building for two years, has surprised economists.
The recession wounded Oregon badly. Manufacturing, a major part of the economy, took a big dive.
The housing crash slammed builders, especially those who had created speculative developments. The overbuilding wasn’t as bad as the Sun Belt, but far worse than in Washington. Nearly 40,000 construction jobs were lost.
In addition, much of rural Oregon still depended on wood products, even with an industry restructuring in the 1980s and federal logging restrictions since the early 1990s. The dead-stop housing sector left little demand for timber. The recession threatened to further widen the gap between cities and rural areas.
And Oregon confronted the head winds facing every state: a slow national recovery, underwater homeowners, workers and retirees who lost wealth, government austerity and rising student debt.
Now, Lehner told me, “We’re on the upswing. Regions of the state outside of Portland are coming back on line. Bend and Salem are outstanding … growing as fast as they have ever grown. Second-tier metros have turned the corner and are driving this acceleration. Rural Oregon is growing about as well as during the (last) boom.”
Why? Job creation is a big factor. The number of nonfarm employees recently surpassed its mid-2000s peak. Even manufacturing jobs, which were shredded by the downturn, have begun a comeback.
Portland is a powerful engine. In a recent Brookings Institution ranking of metropolitan areas where advanced industries make up the largest share of the workforce, Portland came in No. 17 nationally. Seattle ranked No. 2.
Also, people never stopped moving to the state, even during the worst of the recession. Especially for the state’s most attractive cities, this means young people bringing their skills and older workers and retirees their wealth.
“The question becomes, can we take another step up,” Lehner said. “How strong can this recovery get?”
Some things are out of Oregon’s control, such as Federal Reserve policy. But although the state enjoys a fairly diversified economy for its size (it is the 27th most populous state compared with No. 13 Washington), it also suffers from several disadvantages.
It is only a middling international trade player. It ranked 22nd last year in merchandise exports. Not bad for its size and with a big assist from Intel, but still disappointing for being a Pacific Rim state. Also, export growth has not been especially strong.
Foreign direct investment is another area where Oregon is only average. For example, foreign companies employed 46,300 there in 2012.
But Kentucky, only slightly more populous, posted 95,400, thanks to its aggressive courting of Toyota and its suppliers.
At $50,229 in 2013, Oregon’s median household income trailed the national average (Washington’s was above both.)
Also, Oregon faces its pre-recession challenge of moving a technology and manufacturing economy into its smaller cities and rural areas.
Addressing these challenges is the task of the state’s economic-development agency, Business Oregon.
Some object lessons can already be found in the diversification of the Columbia River Gorge.
For example, although drone-maker Insitu is in Bingen, on the Washington side, a share of its employees live across the river in Oregon. And Oregon is drone-hungry.
On March 20, Gov. Kate Brown announced the state would invest $1.6 million to expand the drone test range in Pendleton. The state has two other ranges, as well. Officials are hoping to position Oregon as a leader in the growing unmanned aerial-vehicle industry.
Another ambition is to retool the state’s legacy industry to supply cross laminated timber for high-rise buildings in developing countries. These are being engineered to be as strong and safe as steel.
Fanciful? The buildings are already going up, and promising environmental benefits, too.
In the worst days of the recession, an Oregon comeback seemed fanciful, too. Now Oregon is back and rising.