Northwest Oregon’s Economy in 2020: The Year in ReviewMarch 17, 2021 As with the rest of the country, Northwest Oregon’s economy had a wild ride in 2020. The year started off with a continuation of the weak employment growth that characterized 2019. The slow growth seemed emblematic of an economy near the peak of a business cycle. The region added just 20 jobs in January 2020 and 40 jobs in February. Employment in Benton, Clatsop, Columbia, Lincoln, and Tillamook counties combined in February was actually down about 400 jobs over the previous year, although this comparison fluctuated from month to month with the weak and uneven expansion.
The situation changed abruptly in the middle of March as the COVID-19 pandemic struck and business operations were curtailed. March nonfarm employment fell 600 jobs in the region as some businesses responded to the situation before the March 12th payroll survey which is used to estimate monthly employment. But the real situation was revealed with April’s payroll survey. Employers in Northwest Oregon cut an additional 17,790 jobs by mid-April. This was a loss of 17.4% of the payroll jobs in the region in one month.
Although March was the beginning of record job losses for Northwest Oregon, the downturn didn’t last long. In May the region began adding jobs and recovered more than 9,000 jobs by August. Unfortunately, job growth sputtered in the fall as a second wave of COVID-19 cases occurred and the region’s tourism-based businesses headed into the slow season. The year ended with nonfarm employment in Northwest Oregon down 9,710 jobs (-9.4%) from its peak in February.
It seems likely that employment will not return to pre-pandemic levels until the pandemic is over, business restrictions are ended, and people are willing and able to resume normal travel and activities. The Oregon Office of Economic Analysis is forecasting that Oregon will return to full employment in the first quarter of 2023. It is possible that much of Northwest Oregon employment could return before then if the domestic travel industry can recover sooner. Lodging and food service businesses report good demand for their services when they are allowed to operate.
All five counties in Northwest Oregon were hit hard by the pandemic recession in 2020. The recession’s impacts had some similarities across the counties, such as leisure and hospitality job losses, and also some differences.
Benton County accounted for nearly one-third (-5,850) of the region’s employment loss from February through April. The biggest loss was in leisure and hospitality. The industry shed 2,170 jobs (-26.4%) as restaurants and lodging was closed. Local government education cut 900 jobs (-16.5%) with school closures. Health care and social assistance lost 780 jobs (-5.1%) as non-essential medical care was curtailed. Only two industries were spared jobs losses in the spring: information had no change in employment and the federal government added 10 jobs. The county regained about 1,500 jobs by the end of the year but remains down nearly 4,400 jobs. The employment stability that Oregon State University traditionally provides to Benton County was reduced by business restrictions and distance learning.
Clatsop County shed 4,130 jobs (-22.3%) from February through April 2020. The county has a relatively large tourism economy that was severely impacted by the pandemic. The leisure and hospitality industry cut a nearly unbelievable 2,670 jobs (-56.6%) in two months. Retail trade was also hit hard, shedding 450 jobs from February through April. Private education and health services lost 370 jobs (-14.1%). Most industries in Clatsop County lost jobs in the spring, but mining and logging, manufacturing, federal government, and state government all managed to generate small gains. Unlike Benton County, Clatsop County managed to regain a significant number of jobs over the remainder of the year. The county added 2,660 jobs from April through December. That’s nearly two-thirds of the jobs that were lost. Most of the jobs regained were in leisure and hospitality.
Columbia County fared better than other counties in the region during the pandemic recession. The county lost 1,300 jobs from February through March, about 11% of its nonfarm employment. The county has an unusually small tourism industry, but even so, leisure and hospitality lost 570 jobs (-44.5%). This was more than any other industry in the county. No industry gained jobs during the spring, but Columbia County did add 590 jobs over the remainder of the year. Most of the jobs gained were in leisure and hospitality, and most industries managed to recover some of the jobs they had shed. One exception was local government education. Columbia County schools finished the year with 370 fewer employees than they had in February. Overall, the county’s employment remained 6% lower in December than in February. This was better than other counties in the region and better than the state as a whole. Although Columbia County did relatively well during the recession, it is important to remember that nearly three-quarters of workers who live in Columbia County commute to jobs outside the county. Some of these areas lost relatively more jobs than did Columbia County. Apparent employment resilience in Columbia County may not adequately describe the job and income loss experienced by the county’s residents.
Lincoln County lost 4,460 jobs (-24.7%) from February through April, proportionally more than any other county in the state. Much of the county’s employment depends on tourism, and the loss of 2,640 jobs (-60.4%) in leisure and hospitality in two months reflected that. Every industry except federal and state government lost jobs during the spring, and even they gained only 10 jobs each. Retail trade cut 530 jobs from February through April, local government lost 350 jobs, private educational and health services shed 270 jobs, and financial activities was down 210 jobs. The county gained 2,720 jobs back over the rest of the year, including 1,530 in leisure and hospitality. Job growth in retail trade was even strong enough to pull the entire trade, transportation, and utilities industry ever so slightly above its pre-pandemic level. Unfortunately, the county’s nonfarm employment as a whole in December remained 9.6% below its February level and most industries are still below their pre-pandemic employment level.
Tillamook County also fared relatively well during the pandemic recession though not quite as well as Columbia County. Tillamook County shed 1,430 nonfarm jobs (-15.4%) from February through April. Its leisure and hospitality industry cut 650 jobs (-48.9%). Local government shed 190 jobs, and retail trade went down 150 jobs. As with some other counties, almost every industry in Tillamook County lost jobs during the recession. The federal government was the only exception with a gain of 10 jobs. Tillamook County added back 710 jobs over the remainder of the year and finished out the year with its employment 7.8% below the pre-pandemic level. Construction and the information industry managed to get back to their pre-pandemic levels but weren’t able to grow beyond that.
Unemployment in the Region
Hand in hand with the loss of nonfarm jobs during the pandemic recession was a historic increase in unemployment rates.
The seasonally adjusted unemployment rates in Northwest Oregon were at record levels for every county in April. The current data series for unemployment begins in 1990, so it isn’t possible to compare the rates for the 1980s recession. It is unlikely that Lincoln and Clatsop counties ever had higher unemployment rates with the possible exception of the Great Depression.
The unemployment rate trends are clearly a story of geography. Benton County, usual home of one of the lower unemployment rate in the state, saw its rate jump from 2.6% in March to 10.6% in April. Incredibly, that was still the lowest rate in the region and sixth-lowest in the state. Benton County’s unemployment rate began to drop in June, and it finished the year at 4.3% – the second-lowest in the state.
Columbia County’s pre-recession rate was 4.2%, which was just slightly above the statewide rate. As with many economic and demographic measures, Columbia County tends to be similar to the state as whole. Its rate increased to 15.0% in April, also just above the statewide rate of 13.2%. Columbia County’s unemployment rate continued to follow the general statewide trend while slowly closing the gap. It finished the year at 6.7%, essentially the same as the statewide rate of 6.3%.
Tillamook County’s rate (3.5%) was actually lower than Columbia County’s rate in February prior to the pandemic recession. But that didn’t last. Tillamook has a much larger leisure and hospitality industry than Columbia County and its unemployment rate jumped to 18.0% in April. The rate began to drop in May and continued to decline throughout the year, finishing at 5.7%. This was below the rest of the counties except Benton County.
Lincoln and Clatsop counties had unemployment rates in February (3.9% and 3.3%, respectively) essentially the same as the statewide rate. The pandemic recession hit both counties harder than anywhere else in the state. Lincoln County’s unemployment rate shot to 25.9% in April, and Clatsop County’s rate was close behind at 24.2%. These were the highest rates in the state. Their unemployment rates dropped throughout the year as their economies were helped by domestic travel. Rates in December were 7.7% in Lincoln County and 6.8% in Clatsop County. Both rates were higher than the statewide rate of 6.3%.
Major 2020 employment stories in Northwest Oregon included:
- Timber Towne Coffee opened in Philomath. It offers coffee, tea, cookies, and biscuits. Philomath Express, 1/12/2020
- McMenamins hotel and brewpub chain will temporarily lay off 3,000 workers and close most locations around the region due to COVID-19. Portland Business Journal, 3/17/2020
- NuScale Energy Exploration Center opened at Oregon State University in Corvallis. The center offers a hands-on learning opportunity to apply nuclear science and engineering principles through simulated, real-world nuclear power plant operation scenarios. Cascade Business News, 11/25/2020
- Fort George Brewery in Astoria reopened with 30 of its 120 workers after being closed due to COVID-19. The Daily Astorian, 5/30/2020
- Bornstein Seafood temporarily closed two of its Astoria processing plants for cleaning as part of its response to COVID-19. The two plants employ about 150 people. The Daily Astorian, 5/5/2020
- Buoy Beer Co. is planning an expansion that will double the brewery's capacity and create a new headquarters for Pilot House Distilling on the Astoria Riverwalk. The Daily Astorian, 12/18/2020
- Columbia County
Georgia-Pacific will invest $25 million at the Wauna Mill in Clatskanie for a new Angel Soft® bath tissue converting line that will come online in 2021. It plans to hire entry-level technicians. The Chief, 10/11/2020
- Wilsonville Concrete Products – a marine transportation, barge unloading, dredging, and marine construction company – will open at the St. Helens Industrial Business Park docks. It will employ about 25 workers. The Chronicle, 7/22/2020
- Construction will begin late this year on NEXT Renewable Fuels, a biofuel production facility, at Port Westward near Clatskanie. Commercial operations are expected to begin by mid-2022. Columbia County Spotlight, 1/3/2020
- Pacific Seafood in Newport suspended operations at its five locations due to a COVID-19 outbreak that infected 53 team members and 71 locally based contractors. Newport News Times, 6/7/2020
- Oregon State University trustees approved a $73.5 million capital budget for PacWave, a wave technology project with four testing berths each capable of handling up to five devices set about seven miles off the coast between Newport and Waldport. Portland Business Journal, 6/2/2020
- Georgia-Pacific in Toledo will lay off most of its hourly employees for a week due to lack of demand. It employs about 300 people. Newport News Times, 5/12/2020
- Tillamook Country Smoker – a maker of beef jerky, meat sticks, and smoked sausage – is hiring at its facilities in Bay City and Beaverton due to increased demand for its products as a result of COVID-19. The Oregonian, 3/31/2020
- Hampton Lumber closed of two of its nine mills due to COVID-19 and will continue to evaluate the others on a week-to-week basis. It has facilities in Warrenton, Tillamook, Banks, and Willamina. The Daily Astorian, 4/7/2020
- The Imagination Station, a preschool, opened in Tillamook. Headlight-Herald, 11/1/2020