Oregon s Regional Economy:

Transcription

1 Oregon s Regional Economy: Recent Performance, Outlook and Risks Willamette University Continuing Education September 9 th, 2014 Mark McMullen State Economist

2 Macroeconomic Backdrop 2

3 Business Cycle Indicators: Up and to the Right Millions Total Nonfarm Employment (SA) Index, 2007= Industrial ProducLon Jan- 05 Jan- 07 Jan- 09 Jan- 11 Jan Real Personal Income ex Transfer Payments 75 Jan- 05 Jan- 07 Jan- 09 Jan- 11 Jan Real Manufacturing and Trade Sales Tillions 11.5 Tillions Jan- 05 Jan- 07 Jan- 09 Jan- 11 Jan Jan- 05 Jan- 07 Jan- 09 Jan- 11 Jan- 13 3

4 Steady As She Goes U.S. Employment Growth 4% 3% 2% 1% 0% - 1% - 2% - 3% - 4% - 5% - 6% U.S. Real GDP Growth 6% 4% 2% 0% - 2% - 4% - 6%

5 Housing States Coming Back 4% 2% 0% - 2% - 4% - 6% Housing States: AZ, CA, DE, FL, HI, MD, NV, NJ, OR, RI, WA - 8% Jan- 05 Jan- 08 Jan- 11 Jan- 14 Housing States Nonhousing States 5

6 The Bigger the Better 1% Metro with 1+ million populalon Metro with 250k - 1 million populalon Metro with <250k populalon Nonmetro 6% Metro with 1 million or more populalon Metro with 250k - 1 million populalon Metro with <250k populalon Nonmetro 0% 4% - 1% - 2% 2% - 3% 0% - 4% - 5% - 2% - 6% - 4% - 7% Dec- 07 Jan- 10 Jan- 12-6% Jan- 80 Jan- 85 Jan- 90 Jan- 95 Jan- 00 Jan- 05 Jan- 10 Jan- 1 6

7 Oregon: Recent Performance 7

8 Oregon s Looking Good Too Millions $86 Total Nonfarm Employment (SA) Jan- 05 Jan- 07 Jan- 09 Jan- 11 Jan- 13 Real Wages & Salaries (SAAR) Unemployment Rate (SA) Jan- 05 Jan- 07 Jan- 09 Jan- 11 Jan Weekly Hours Worked, Manufacturing Billions $84 $82 $80 $78 $76 $74 $ Jan- 05 Jan- 07 Jan- 09 Jan- 11 Jan- 13 8

9 Oregon s Job Growth Advantage Has Returned 6% Oregon Job Growth 4% 2% 0% - 2% - 4% - 6% - 8% Jan- 90 Jan- 95 Jan- 00 Jan- 05 Jan- 10 Jan- 15 9

10 Oregon: Near-Term Outlook 10

11 Outlook: As Good As It Gets? 50,000 40,000 Oregon Employment Year- over- Year Job Gains Forecast - - > 3.5% 3.0% 30, % 20, % 10, % 0 1.0% - 10, % - 20, Private Public Growth Rate (rhs) 0.0% 11

12 Oregon: What s Missing? 12

13 Labor Market Slack 13

14 Few Middle-Wage Jobs Oregon Office of Economic Analysis

15 Regional: The Bigger the Better 2% 0% Oregon Employment: Metro and Nonmetro Portland - 2% - 4% Oregon - 6% - 8% Nonmetro - 10% - 12% Bend, Corvallis, Eugene Medford, Salem Jan- 07 Jan- 09 Jan- 11 Jan- 13 Jan

16 Regional: Exposure to Hard-Hit Sectors 30% Housing and Government in Oregon Share of Local Payroll, % 24.9% 20% 15% 16.2% 17.2% 10% 7.5% 7.9% 9.6% 5% 0% Housing Government Metro Oregon Rural 16

17 Regional: Job Recovery by County Share of Lost Jobs Regained by July % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Crook Gilliam Deschutes Yamhill Clackamas Jefferson Lane Jackson Josephine Columbia Linn Lake Douglas Coos Harney Curry Oregon Employment by County Grant Wheeler Klamath Washington Oregon Union Wallowa Lincoln Morrow Wasco Hood River Benton Multnomah Salem MSA Tillamook Baker Sherman Clatsop UmaLlla Malheur - 20% - 15% - 10% - 5% 0% Great Recession Job Losses All Regained Majority Regained About Half Regained About 1 in 4 Regained Less than 1 in 10 17

18 Regional: Central Oregon on the Rise 18

19 Risks and Long-run Outlook 19

20 Manufacturing: Oregon s Comparative Advantage 30% 1.5% Share of Statewide Employment (lek) Share of U.S. Manufacturing Employment (Right) 1.4% 25% 1.3% 1.2% 20% 1.1% 1.0% 15% 0.9% 0.8% 10% %

21 Manufacturing: Changing of the Guard

22 Migration Flows to Oregon Return 90,000 Number of Driver's Licenses Surrendered 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 From Other States From California From Washington 22

23 Oregon: Gain/Loss of Aggregate Gross Income due to MigraJon Average, $ millions - $138.3 Northeast Region +$ $15.3 Midwest Region +$96.6 +$692.7 West Region (excluding CA, ID, WA) +$6.9 South Region +$66.5 Total DomesLc: Foreign +$4.0

24 Domestic Net Migration: Oregon s Comparative Advantage 24

25 Domestic Migration Across Time: Deschutes County 25

26 Domestic Migration Across Time: Coos County 26

27 Oregon s Employment Outlook 27

28 Revenue Outlook 28

29 Forecast Evolution: No More Wiggle Room Billions $15.0 $14.9 $14.8 $14.7 $ BN Personal Kicker Base $16.3 $16.2 <- - 2% Kicker Threshold $27 Million (0.2%) $16.1 $ $251 Million (- 1.7%) Expenditures - - > $15.9 Billions $14.5 $14.4 <- - COS Forecast $15.8 $15.7 $14.3 $15.6 $14.2 Dec '10 Sep '11 Jun '12 Mar 13 Dec '13 Sep '14 $

30 The Tricky Part 50% 40% 30% 20% 10% 0% - 10% - 20% Growth in Year- End Personal Income Tax Payments, April- June Quarter, % 49.4% 30.8% 24.6% 25.1% 22.8% 11.9% 15.2% 17.9% 11.2% 8.4% 5.3% 3.3% 0.2% - 1.0% - 2.8% - 7.0% - 30% - 40% - 50% % %

31 Personal Income Tax Forecast $ billions, 4 quarter moving sum $34.8 (million) $ $ $ $

32 Lottery At Risk 32

33 Effective Reserves $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 Oregon Budgetary Reserves ($millions) 8% 7% 6% 5% 4% 3% 2% 1% $ BN BN BN BN BN BN BN FY14 FY BN BN 0% General Fund Ending Balance Raindy Day Fund EducaLon Stability Fund Percent of General Fund, rhs 33

34 For More Information Standard Contact: 155 Conage Street NE Salem, OR (503) Social Media: 34