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Employment Near Interstate 5 Exits: It's More Than You Think
by Amy Vander Vliet
Published Jan-15-2013

When people think of freeway exits, they might envision areas with gas stations, fast food, and hotels. While these industries do tend to locate along freeway exits, an analysis of establishments located along Interstate 5 (I-5) exits in Oregon suggests that there is a much wider array of firms than one might expect.

More than 5,800 private-sector establishments are located within one-quarter mile of the 134 exits along the Oregon portion of I-5. These businesses provided 97,000 jobs in 2011, or 7.2 percent of the state's total private-sector covered employment. Obviously, some firms are located near interchanges largely by chance, while others seek out exits to attract freeway customers or because they want to easily access the freeway.

Note: the one-quarter mile radius was chosen as a reasonable proxy for determining which firms were "near" an I-5 exit. While this distance is somewhat arbitrary, a larger distance would include more firms not truly associated with the freeway exit, while a smaller distance might exclude some firms which were truly associated with the freeway exit. One-quarter mile seemed to provide a reasonable balance between these tradeoffs.

Which Industries are More Likely to be Found Near I-5 Exits?
A relatively large share of employment in service industries is located near I-5 exits (Graph 1). Specifically, retail trade and leisure and hospitality account for one out of every three jobs in the I-5 corridor. These two broad industries are also more concentrated along I-5 compared with the rest of the state.

On the other end of the spectrum, you'll find fewer jobs in information (e.g. publishing, telecommunication) and natural resources, which also have a smaller presence in the state as a whole.

Manufacturing employs nearly 10,000 people along I-5, but it's less concentrated along the freeway compared with the rest of the state. Some of Oregon's largest manufacturers are located more than one-quarter of a mile off of I-5, including Intel, Hewlett Packard, Boeing, and many of Oregon's sawmills and other wood manufacturing plants.

Transportation and warehousing is also less concentrated compared with the rest of the state, which might come as a surprise given the truck traffic and warehouses dotting I-5. While nearly 3,000 people are employed along the interstate, there is significant employment on Swan Island, in Portland's northwest industrial district, and at Portland International Airport - all of which are a mile or more from I-5.

At a finer level of industry detail, food services and drinking places account for the largest share of employment (Graph 2), with 11 percent of I-5 exit jobs, followed by administrative support services (6.9%), and ambulatory and health care services (e.g., doctors' offices, dentists, optometrists). There are also a relatively large number of professional services establishments close to I-5; nearly 700 companies, or 11.5 percent of I-5 firms. While you might not consider this type of business when you think of freeway exits, many office parks have been built right off the interstate, especially in suburban Portland. The desire for more space, commuting convenience, and ample parking has prompted many companies to locate outside the city yet still close to the interstate.

Graph 1
Fraction of Oregon private-sector employment by broad industry 2011
Graph 2
Oregon industries with most employment near I-5 interchanges 2011
Portland Exits vs. All Other Exits - Does Employment Differ?
There are 26 exits on I-5 between Tualatin and the Washington State line. Along that 18-mile stretch of highway are more than 2,100 establishments employing roughly 46,000 workers. Not surprisingly, the job density is much higher near the Portland-area exits: 2,600 jobs per mile of freeway compared with 175 south of Tualatin.

There are both similarities and differences in the mix of industries near Portland exits compared with the exits south of Portland. Both areas have a relatively large and similar proportion of employment in the classic freeway exit amenities of food and lodging (Graph 3). Both areas have a large and significant concentration of durable goods wholesalers. In the Portland area, employment is dominated by wholesalers of commercial equipment and electrical goods. Further south, wholesalers deal more in motor vehicles and parts, and in machinery and equipment.

The industry mix is also significantly different. Close to Portland, you're more likely to find professional and technical services and doctor and dentist offices. Banks and insurance companies also take up a greater share of employment (8.2% vs. 2.9% south of Tualatin). The average size of a financial institution or an insurance company is much larger in the Portland area.

Outside of Portland, you'll see relatively more general merchandise and clothing stores right off the interstate: think Nordstrom, Costco, Fred Meyers, and the Woodburn Company Stores and Lancaster Mall. There is also a relatively larger share of employment in gas stations, truck transportation, and car dealerships.

Graph 3
Fraction of Oregon private-sector employment select industries 2011