OLMIS

by Nick Beleiciks
Published Nov-23-2009

Summary Introduction Broad Industry Trends Detailed Industry Forecasts Where the Jobs Are: Regional Differences

• Oregon is expected to add over 160,000 jobs between 2008 and 2018, an increase of 9 percent. Growth will be roughly equal to job growth in the prior decade when the state added nearly 165,000 jobs and grew by 10 percent.
  
  
• Two broad industries are expected to account for nearly half of the state's job growth:
  Educational and health services, and
  
  Trade, transportation, and utilities
  
  
• Manufacturing will likely rebound over the forecast period but is not expected to return to its employment level prior to the recent recession. Most of the sector's job losses will be in the manufacturing of durable goods, rather than in nondurable goods manufacturing.
  
  
• Job growth is expected to be most rapid in the central and southern regions of the state, while the slowest growing regions are anticipated to be in the northeast corner of the state. The Portland metro area and the Willamette Valley are expected to add the majority of jobs over the forecast period.

Predicting the future of the economy is always a difficult task. Predicting the future of an economy during times of rapid change, like a recession, is especially challenging. Every two years, Oregon Employment Department economists take on this challenge and create 10-year industry employment forecasts. We examined historical trends and other people's forecasts to help project Oregon's employment changes between 2008 and 2018. These forecasts are used in conjunction with occupational forecasts to help students decide on careers, schools decide on training programs, businesses decide on strategic plans, and governments decide on budgets and services.

After losing jobs in the years following the recession of 2001, the state experienced rapid employment growth from 2004 through 2007. In 2008, the base year for our employment projections, the state lost jobs and continued to lose jobs into 2009. Our 10-year projections do not try to forecast the beginning or end of the current recession or possible future recessions. Rather, the projections aim for a long-term average employment level, somewhere between the cyclical highs and lows.

Despite the job losses caused by the recent recession, Oregon will almost certainly add jobs between 2008 and 2018. Our forecast calls for a gain of over 160,000 jobs, an increase of 9 percent. This percentage is similar to the 10 percent gain from 1998 to 2008 but lower than any 10-year gains seen in the prior quarter-century. The projection's slow job growth reflects recent job losses caused by the recession and a population forecast that has Oregon growing slower than it has since the early 1990s.

We expect most broad industry sectors to add jobs between 2008 and 2018 (Table 1). However, a few industries have been hit especially hard by the recession and employment levels may take most of the decade to recover. Manufacturing is the only broad industry expected to lose jobs over the decade. We expect nearly all of the durable goods manufacturing sectors to lose jobs. The nondurable goods sector will likely also lose jobs, as losses in the paper manufacturing sector outweigh increases in food manufacturing.

Construction and information will most likely grow at a slow pace from 2008 and add very few jobs. After losing thousands of jobs during the recession, construction will likely return to its historical share of about 5 percent of total employment. Information is a diverse industry, with losses in the traditional print industries being offset by job gains in software publishing and data hosting services.

The education and health services industry is expected to add nearly 50,000 jobs, the most of any industry. Private education and health services employment is expected to grow by 23 percent over the decade, two and a half times the growth rate of total employment. Health care will add the bulk of the new jobs due to the state's growing and aging population. Oregon's population age 65 or older could grow by about 45 percent through 2018. Educational services are expected to grow at about the same rate as the overall economy.

Professional and business services will likely be another fast growing industry and is projected to grow by 14 percent and add 27,600 jobs. Growth in this industry has been driven in recent years by growth in Oregon's economy and as more firms hire other businesses to provide support activities.

Leisure and hospitality is expected to add 21,500 jobs over the decade for a growth rate of 12 percent. The largest component of this sector is food services and drinking places which are projected to grow along with the population growth rate of 12 percent and add 15,700 jobs. The smaller arts, entertainment, and recreation component is expected to grow slightly faster at 14 percent and add 3,200 jobs.

Trade, transportation, and utilities should grow about 9 percent over the decade, the same rate we project total jobs to grow. This is the largest sector in Oregon's economy and it will likely add 30,900 jobs, the second largest addition of any industry. Retail trade makes up the bulk of this sector and will add almost 20,000 jobs and grow 10 percent, slightly below the rate of population growth. The slower growth in retail trade is due to a slowing trend in the number of motor vehicle dealers, building materials stores, and hobby, book, and music stores.

The government sector should add almost 25,000 jobs, an increase of 8 percent. Federal government will likely see declining employment in Oregon due to reductions in Postal Service employment and the completion of cleanup at the Umatilla Army Depot. Tribal employment is expected to grow 14 percent as casinos expand and tribes diversify into other areas of the economy. In general, state and local governments are likely to grow at close to the pace of the state's overall economy. State and local education is expected to grow at a slower rate, consistent with the latest population forecasts that indicate Oregon's school age population will grow at a much slower rate than the total population.

Top 10 Growth Industries

Employment forecasts by detailed industry are needed to guide job seekers and educators in their prioritization efforts. The top 10 detailed industries by the number of jobs they will gain between 2008 and 2018 are shown in Graph 1. The top 10 industries consist of all the health care and social assistance industries, as well as restaurants, stores, and other service industries.

Ambulatory health care services, which includes doctors and dentist offices, tops the list with an expected job gain of 18,600 jobs, an increase of 28 percent. Add in projected job gains of 11,800 at hospitals, 10,500 at nursing and residential care facilities, and 6,300 in social assistance, and the total 47,200 jobs account for over one-fourth of the state's forecasted job growth. Again, the growth in the health care and social assistance industries will be driven by the state's growing and aging population.

Food services and drinking places will likely grow 12 percent during the decade, about the same rate as population growth, and add 15,700 jobs. Limited-service eating places, which will add 7,600 jobs, are expected to have more growth than full-service restaurants, which will add 6,900 jobs.

Professional and technical services are expected to add 14,700 jobs during the decade. This industry covers firms providing a wide range of services, including many that require workers earning high wages. Firms in this industry include offices of lawyers, certified public accountants, tax preparers, architects, engineers, photographers, veterinarians, graphic designers, and interior designers, to name the most common examples.

Administrative and support services, a group of firms providing workers and support to other businesses, is expected to add 9,600 jobs. Local government education, food and beverage stores, and general merchandise stores are, like the industries mentioned above, large industries with growth driven by the increasing population.

Rapid Growth Industries

As noted above, the health care and social assistance industries - ambulatory health care, nursing and residential care, hospitals, and social assistance - are among the industries expected to add the largest number of jobs. They also top the list of industries with the largest percentage gains (Graph 2). As with the health care industry, professional and technical services' job gains also mean a fast growth rate.

Electronic markets and agents and brokers will likely be the fastest growing smaller industry between 2008 and 2018, growing 20 percent and adding 2,600 jobs. This industry has seen rapid job growth in the last few years and will likely continue to grow. These firms arrange the sale of goods owned by others through means such as business-to-business electronic markets or agents and brokers who usually work on a fee or commission basis.

The amusement, gambling, and recreation industry was one of the fastest growing industries over the prior decade, growing over 33 percent. That growth rate is not expected to continue into the next decade, but the industry should still grow about 14 percent. The factors behind the industry's growth include general population growth and retiring baby boomers with more time for recreation.

Tribal government is another area that has seen rapid growth during the prior decade and will continue into the next. This includes growth not only at casinos but also elsewhere as tribes continue to diversify into different business lines.

Nonstore and miscellaneous store retailers are expected to grow slightly faster than the average for all retailers as they fill niches not being met by traditional retailers.

Declining Industries

Although the average job growth rate in Oregon is expected to be a little slow from 2008 to 2018, most industries will likely add jobs over the decade. Other industries, especially in manufacturing, which relies more on exports than serving a growing local population, are expected to have employment losses over the decade.

Paper manufacturing is expected to lose 1,200 jobs, which represents a 20-percent loss, the most of any industry (Graph 3). This industry has been cutting jobs for years, and some major facility closures have been announced recently.

Computer and electronic product manufacturing is expected to lose 1,000 jobs, about 800 of those in the semiconductor and electronic component manufacturing industry. The loss of the "traditional" semiconductor manufacturing jobs in this industry is actually expected to be higher, but those losses should be partially offset with gains in jobs at solar cell manufacturers.

Primary metal, machinery, wood product, and transportation equipment manufacturing industries are all part of the larger manufacturing sector which has experienced a number of permanent factory closures.

As mentioned above, the federal government is expected to lose jobs as the Umatilla Army Depot chemical incinerator closes and because of falling demand for postal services.

The non-Internet publishing industries will likely lose 400 jobs, as consumers continue the switch to online sources of information. Logging is expected to also lose about 400 jobs as more forestry work is done with labor saving tools like helicopters or by firms working in other industries.

The forecast shows some regions within Oregon adding jobs at a much faster pace than other regions from 2008 to 2018 (Table 2). We expect the most rapid growth in Central Oregon (Region 10). This region has been growing partially because of its many recreational amenities, which will continue to attract people throughout the decade. Jobs in the region are expected to grow by 14 percent.

The state's other major population centers all have expected job growth rates of 10 percent, just above the statewide average. These centers include Portland (regions 2 and 15), Eugene (Region 5), Salem (Region 3), and Medford (Region 8). About half of the state's job growth will be in the Portland area.

Many of the more rural regions in the state will see smaller growth rates, as they have in recent years as natural resource and manufacturing jobs have been lost. Region 12 (Morrow and Umatilla counties) will have the smallest growth rate as the job losses that will occur when the chemical incineration work is completed offset the job gains in other local industries.

The full projections are available on  www.QualityInfo.org. Select a region from the map and look in the Publications tab for Regional Projections by Industry and Occupation 2008-2018.