2016 in Review: Portland Job Growth Moderates, Unemployment FallsFebruary 21, 2017 Job growth in the Portland metropolitan area cooled in 2016, from 2015’s red hot 3.3 percent to a still-respectable 2.8 percent. Preliminary estimates peg growth at 31,000 jobs for the year, following gains of 35,100 in 2015. Employment levels reached another all-time high in 2016, at 1.41 million jobs; 100,000 above pre-recession peaks.
Meanwhile, the unemployment rate declined from 5.3 percent (2015) to 4.7 percent. Underlying these numbers was a huge surge in the region’s workforce: more than 52,000 workers entered the labor force in 2016; the largest annual increase since comparable records began back in 1990. Nearly 57,000 people found jobs – another single-year record – and the number of unemployed residents fell for the seventh consecutive year (by 4,500).
Lagging the Rest of Oregon, Surpassing Much of the Nation
For the second consecutive year, Portland metro area’s (Oregon portion) job growth lagged the rest of Oregon’s. Typically Portland outpaces the state during economic expansions. This certainly was the case following the recession, as the recovery took hold first and furiously in Portland. But now Portland is moderating while the rest of the state is accelerating.
Compared with other large metro areas, Portland moved up in the rankings in 2016. After recording the 16th fastest job growth rate in both 2014 and 2015, it moved up to 13th in 2016. The fastest-growing metros were Orlando (FL), Jacksonville (FL), and San Jose (CA).
Not only is Portland outpacing three-quarters of the nation’s largest metro areas, it’s also outpacing the nation as a whole. The metro area grew a full percentage point faster than the U.S. in 2016.
Nearly nine out of 10 new jobs were created by the private sector. Professional and business services added the largest number of jobs (+5,000). This sprawling sector includes a wide variety of industries from accounting to waste collection. Job gains were spread among each of the three sub-sectors: Professional and technical services (+3,500), management of companies (+1,000), and administration and waste services (+400). The only published components to lose jobs over the year were business support services, where employment was likely pulled down by announced layoffs at Capital One, and employment services (e.g. temp help). It’s too early to tell if these losses were caused by a tight labor market (people transitioning from temp jobs to permanent positions without enough workers to replace them), or if they portend a further-slowing economy (because employers often scale back their temporary workforce at the first signs of weakness or uncertainty).
Health care and social assistance added the second-largest number of jobs, at 4,700. Nearly half of these new jobs were created in the ambulatory health services component (e.g. doctor offices, medical laboratories). Health care sees solid gains every year, even during recessions, as the metro area’s population grows and ages. This trend will likely continue in the foreseeable future.
A growing population, thriving tourism, and rising wages pushed up demand and employment in the region’s leisure and hospitality sector (+4,500 jobs). Restaurants and bars were responsible for the majority of these new jobs. The immediate outlook is bright, as several new hotels (and numerous restaurants) are scheduled to open in the coming years.
Manufacturing took a breather in 2016 after five years of solid growth totaling 15,000 new jobs. In 2016, it netted 900 new jobs. Semiconductor manufacturing was flat, no doubt due to announced layoffs at Intel. Nondurable goods – products with a life expectancy of less than three years such as food and paper – added 1,000 jobs, predominantly in the food component.
The finance industry struggled for years following the recession, consistently lagging most other industries and thousands of jobs off its pre-recession peak. It launched a comeback in 2013 that fizzled in 2014. It tried again in 2015 (+2,200 jobs) and so far it’s stuck with an additional 1,500 jobs created in 2016.
In a 180-degree turnaround from 2015, when it was the slowest-growing major industry, construction was the fastest-growing sector in 2016. Despite thousands of building permits and dozens of cranes scattered throughout the metro area, employers reported difficulties finding workers in 2015. Supply seems to be catching up to demand, as companies added 5,100 jobs in 2016.