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|Wednesday, January 11, 2012|
BY PETER BELAND
Following the national trend, Oregon’s manufacturing sector saw modest employment gains last year after more than a decade of decline aggravated by the Great Recession. According to the Illinois-based trade publication Manufacturers' News, Oregon gained 903 jobs between October 2010 to October 2011, an increase of 0.5%. Though some industries saw losses during that time period, electronics and other large industries buoyed the sector. But competition from China and the growing sense that the European Union — a large export market — is on the verge of a large recession remain obstacles going forward.
Oregon’s natural resource-based manufacturing industries saw both gains and losses. According to the Oregon Labor Market Information System, Oregon’s state labor statistics office, employment in the primary metals sector grew by 5%, with an 18% increase in wages totaling $21 million. The lumber industry lost workers last year due to the continuing weakness of the housing industry.
“This particular recovery has been different … from other recoveries because housing has still not recovered. However, manufacturing has recovered, led by exports and demand from products outside of housing,” says state labor analyst David Cooke. Oregon still has “access to necessary inputs which are: land, labor, capital, energy, infrastructure [and] trade avenues,” he adds.
All of these factors combined with Oregon’s long history in electronics manufacturing and demand for its products led to a 1.6% employment increase in that industry. And if Intel’s $4 billion investment in plant upgrades in Hillsboro is any indication, they’re here to stay for a while. Yet not all companies are as confident. “Those kind of decisions [to stay or leave] can be company specific, it just depends on the fortunes of specific companies and the decisions they have to make,” says Cooke. For example, semi-conductor manufacturer Hynix shuttered its Eugene plant in 2008, taking with it 1,400 jobs.
Despite the growth in the electronics industry, an influx of state-subsidized products produced by cheap labor in China is putting pressure on American electronics manufacturers to stay in the black. In this climate, green-energy companies SoloPower and Perpetua Power Source Technologies are expanding their presence in Oregon. Industry leaders are worried about the advent of protectionist trade wars between China and the United States over American protests of China’s subsidization of its solar and poultry industries, which led China to impose punitive charges on American imports.
“I remember in the ’90s when people were projecting that the electronics industry would keep going [from 30,000] to 60,000 or 70,000 people,” says Cooke on the limitations of predicting industry trends. One thing is for certain: “One key factor that will have an impact on the economy is the diminishing petroleum supply,” says Cooke.
Peter Beland is an Oregon Business contributing writer.
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