Identifying the Vitality of Southwestern Oregon’s Industries

by Kale Donnelly

December 26, 2017

I’m often asked which industries are of key importance to our Southwestern Oregon counties. While “importance” can be subjective, I usually point to a few things: Our region’s tourism appeal and our coastal tourism industry, our abundance in natural resources for logging and wood products, as well as our need for higher employment levels in health care and construction. However, this statement isn’t very far off the mark when discussing Oregon as a whole. So, how can we better demonstrate the area’s key industries? By looking at projected growth, or by evaluating industries of concentration in the region? Well, to that I say, “Why not both?”
When referring to local concentration I’m looking at our region’s share of employment in each industry compared with the state’s share of employment in the same industry. For example, the federal government’s share of employment in Southwestern Oregon is 1.8 times the share of federal government employment in Oregon. This is most likely due to our region’s abundance of federally owned land. In fact, nearly half of all land in Coos, Curry, and Douglas counties is federally owned, encompassing over 2.5 million acres out of roughly 5.3 million acres in total. Federal employees maintain and monitor those lands. On a similar note, the information sector’s employment is much less concentrated in our region than it is in Oregon – 57 percent less. This industry includes publishing entities (except internet) which are showing a decline given the transition to online content.

These industry share comparisons are only one piece of the puzzle. By pairing the projected growth of each industry to its local employment concentration, we can gain a better sense of the vitality of these industries and their potential future economic impact. By graphing these industry characteristics and separating them into four quadrants, we have the following categories:

Important growth industries: Industries with a high concentration in the region and a higher projected growth rate than the region’s total projected growth. These industries are the gold stars of the local industry mix!

Important industries that may require attention: Industries with a higher concentration in the region, but a projected growth rate that is less than the region’s.

Industries of little promise to the local economy: Industries with a lower concentration in the region and a projected growth rate that is less than the region’s.

Potential emerging industries: Industries with a lower concentration in the region and a projected growth rate higher than the region’s. If employment levels rose in these industries they could very well join the “important growth” category.

Those industries with a projected growth rate higher than Southwestern Oregon’s overall projected growth of 7 percent appear on the right half of the graph; those with a projected growth rate of less than 7 percent are located on the left portion. Industries with a higher regional share of employment than the state appear on the upper half of the graph, while the industries with a lower regional share of employment are located on the lower portion.

When I look at our local industries on this quadrant I see a few things. We’re not any more concentrated in our leisure and hospitality sector than the state, nor our manufacturing industry. This was surprising to me, as tourism and the wood product manufacturing sector are both vital industries to our local economy. Our historical logging roots are still very much a part of our regional economy, and our specialization shows in the natural resources and mining sector with a projected growth rate slightly greater than the region’s overall growth. Industries that have the potential to move into the “important growth” category are educational and health services, construction, and other services.

With the Employment Department’s 2017-2026 projections rolling out next year, this chart may very well shift and present us with a different picture with the new data. Once that happens, I’ll be excited to see where each industry finds its new home in the four-quadrant diagram.

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