Sponsored by Oregon Business

The 2012 economic forecast

| Print |  Email
Articles - December 2011
Tuesday, November 15, 2011
1211_WhatsAhead_02About 12 months ago, the economy in Oregon was showing signs of relative strength. Though economic recovery was slow and weak, it was nonetheless recovery. Job losses were down and federal stimulus spending was still shoring up state and local governments, preventing layoffs and maintaining services. But about halfway through 2011, the economy began to sputter.

“We’re kind of caught in between periods of optimism and pessimism,” says Tim Duy, director of the Oregon Economic Forum. “Every time something good happens and you think, this is it, something else happens and pulls us back. That volatility is what’s creating the split between optimism and pessimism.”

In the first half of 2011, Oregon was outperforming the nation, says Joe Cortright, president and principal economist for Impresa, a Portland consulting firm. “But the recovery has lost momentum in the last six months or so, and we’re kind of in risky territory right now.”

Much of what was behind the mid-year and continued slumping was, essentially, more of what’s been hindering the economy all along. The housing market remains almost at a standstill compared to where it was a few years ago. According to the University of Oregon’s most recent Index of Economic Indicators, residential building permits fell below 600 in August — the first time that’s happened in more than a year. The state’s Office of Economic Analysis (OEA) also reported in September that housing-related industries had been adding just 50 jobs per month over the past year; in other recent years, that number was 575 jobs per month.

“The housing market is still very depressed,” Cortright says, adding that home prices are down about 5% this year and between 20% and 25% of homeowners in Oregon and the U.S. are underwater on their mortgages. Typical recoveries in the past have been powered largely by lower interest rates and a housing market that takes off. That hasn’t happened this time around.

Also fueling the slowdown were higher gas and commodity prices, continued pressure in the financial markets, uncertainty in foreign markets like China and Europe and what the OEA dubbed “public-sector pullback.” In most recessions, the public sector feels the impacts later than the private sector. This time was no different, particularly as federal stimulus funds helped maintain state and local government employees and services. Those funds, however, began to taper off this year, and the results have been noticeable in layoffs of teachers and government employees.

According to the OEA, the public sector normally adds 350 jobs each month, but over the past year it has cut 475 every month. Since September 2010 alone, the government sector has shed 7,900 jobs, according to the Oregon Employment Department.

“There had been federal money to put off those kinds of adjustments,” says Tom Potiowsky, a professor of economics and chair of the economics department at Portland State University. “That’s not here anymore. State and local governments are making serious cuts, and state and local government workers spend money in the economy just like everybody else.”

 

 



 

More Articles

Green Rush: Cashing in on legal marijuana

March 2015
Friday, February 20, 2015
BY COURTNEY SHERWOOD | OB CONTRIBUTOR

Marijuana is big business in Oregon, and it’s about to get bigger.


Read more...

Thy neighbor's house

March 2015
Friday, February 20, 2015
BY LINDA BAKER | OB EDITOR

Vacasa may lack the name recognition of Airbnb. But not for long.


Read more...

10 Oregon companies positioning themselves for growth

The Latest
Friday, March 13, 2015
vcthumbBY JACOB PALMER | OB DIGITAL NEWS EDITOR

Ten startups have secured venture capital, angel or seed funding in 2015.


Read more...

Umbrella Revolution

March 2015
Monday, February 23, 2015

Yeah, we know: Oregonians are way too cool for umbrellas. But today’s stylish, high-tech models will soften the resistance of the most rain hardened.


Read more...

10 Twitter highlights from #OR100Best

The Latest
Friday, February 27, 2015
100bestBY OB STAFF

Oregon Business held its  22nd annual 100 Best Companies to Work For in Oregon celebration Thursday night in the Oregon Convention Center.


Read more...

Car Talk

April 2015
Thursday, March 26, 2015
BY LINDA BAKER

Everyone knows cell phones and driving are a lethal combination. The risk is especially high for teenage drivers, whose delusions of immortality pose such a threat to us all. Enforcement alas, remains feeble; more promising are pedagogical approaches aimed at getting people to focus on the road, not their devices.


Read more...

Emperor of the Sea

April 2015
Friday, March 27, 2015
BY COURTNEY SHERWOOD | Photos by Jason E. Kaplan

Pacific Seafood, one of the world’s largest processors, is rebranding as a more transparent and consumer-friendly operation. A controversial CEO and monopoly accusations from coastal fishermen complicate the tale.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS