Published Jun-22-2010
OEA believes that job growth will continue in Oregon through the remainder of this year but will be weak in part because:
- Businesses have been rebuilding their inventories, but the pace of replenishment will fade as the year progresses.
- The positive impact from federal stimulus spending is also expected to fade.
- Analysts worry that the almighty consumer remains unwilling or unable to increase spending; a key ingredient for sustained economic growth.
So with no foreseeable 'magic bullet' in the near future, OEA expects a slow start to the recovery. The modest gains in the first quarter of 2010 - the first in two years - will be followed by more of the same: 6,000 in the second quarter, 2,000 in the third, and 4,500 in the fourth.
Overall, 2010 will show a decline compared to 2009 because growth this year will be too weak to offset the annualized decline: total nonfarm employment is expected to average 1,600,400 for 2010 compared to 1,612,400 in 2009.
Six major industries are expected to contract this year, three will expand, and one will be flat. Construction will suffer the steepest decline by far (‑15.0%) in anticipation of continued weakness in the housing market and tough times for commercial real estate brought on by tight credit, rising vacancy rates, and low demand. Manufacturing will decline in step with the nation, although at a slower pace than OEA forecasted earlier in the year. The outlook for high tech has brightened; chip sales are up and expected to go higher. Financial activities will lose more jobs this year before starting to rebound in 2011. The government sector will cut positions as state and local governments struggle to balance their budgets.
Education and health services weathered the recession better than every other sector. It will be the fastest growing sector this year (+1.9%) due almost entirely to the expanding health care component. Professional and business services will show signs of life after suffering sharp losses in 2009. Leisure and hospitality should benefit from the consumer slowly relaxing their grip on their wallet. The information sector, which includes software, is expected to end this year flat compared to 2009.
From start to finish, OEA forecasts that Oregon will lose 148,500 jobs over seven quarters; a decline of 8.5 percent. It won't be until the second quarter of 2014 - four years from now - that employment will return to the pre-recession peak reached in the first quarter of 2008.
Oregon lost jobs at a faster pace than the nation in 2008 and 2009 and this trend is expected to continue in 2010. But once job growth accelerates in 2011 and beyond, Oregon is expected to once again outpace the nation.
The OEA's complete report is available at www.oea.das.state.or.us.
