The 2012 economic forecast

The 2012 economic forecast

1211_WhatsAhead_04Despite many of the more pessimistic factors coloring the coming year — and not considering any major unexpected events, such as the Japanese tsunami that rippled through the world economy in 2011 — the overall outlook still calls for very modest economic growth in the U.S. and in Oregon in 2012 of about 2% to 3%. The prospect of another recession has some economists, like Duy, worried. Others are a little more optimistic if still a bit wary.

“We are pretty much two years into this recovery,” Potiowsky says. “I don’t believe that we’re going to fall back into a recession, but this slow, agonizing growth is going to be with us through 2012.”

In Oregon, there are several bright areas that have not only done well in recent times, but are likely to continue to remain strong in the year ahead. The state’s exports are almost back to their pre-recession level and in 2010 were up more than 18% over the prior year. Exports of computer processors and integrated circuits from the likes of Intel continue to top the list by far, but other exports, such as aircraft parts, scrap metal and wood, have all increased as well. That growth could taper a bit in 2012, but it should still remain strong.

Manufacturing has also seen some uptick as well. According to the Oregon Employment Department, there were 167,500 manufacturing jobs in Oregon in September 2011, an increase of almost 4% over last year. At the end of October, Daimler Trucks North America announced it was hiring 350 new factory workers and 75 people for its Portland headquarters after sales of its heavy trucks increased. Similarly, Precision Castparts, a Portland manufacturer of metal parts for the aerospace and other industries, announced a surge in second quarter sales and plans for new hiring in the near future. Intel, too, has surged ahead with construction of its new research facility in Hillsboro, which will employ up to 8,000 construction workers over the next two years and create 800 to 1,000 new jobs when it opens in 2013.

“A lot of our leading traded sector companies are more bullish by the day,” says Ryan Deckert, president of the Oregon Business Association. “They are expanding, not retrenching. It’s more like the late 1990s.”

Deckert, who met with officials from Facebook in October to talk about their investment in Oregon and their operation in Prineville, says the state’s apparel cluster — comprising companies like Nike, Adidas, Columbia Sportswear, Keen and Icebreaker — shows no signs of slowing down.

“The customers are out there, and [the companies] are winning the battles with the competition everywhere,” Deckert says. “Our sports apparel companies are just really good. Customers from around the world have choices, and they like our brands.”

Leisure and hospitality jobs have been on the rise, and Potiowsky says some pent-up consumer spending might continue to help that sector in 2012. That’s good, Duy notes, but the flip side is that those jobs are relatively low-wage.

Although housing is down and will continue to be in 2012, there have been some gains in multi-family housing as the demand for rental units has increased.

“We’re seeing a little bit of life in new apartment construction,” Cortright says. “It’s small, but it’s something.”