Slower Growth for the Decade Ahead in Central OregonOctober 7, 2020 The 2019-2029 employment projections for Oregon were released with the expectation for the decade ahead to be a period of slower job growth than the previous 10 years. Although these projections are intended to capture the structural changes in the economy, not cyclical fluctuations, some of the initial job losses in second quarter 2020 from the COVID-19 recession were incorporated into these projections.
Statewide total employment is projected to rise 9 percent between 2019 and 2029. Although that is slower growth than the previous decade (+20.5%) annualized growth from 2020 onward is expected to be quite strong when you consider that total nonfarm employment is in a 140,000 job deficit as of August 2020 compared with 2019 due to the COVID-19 pandemic.
Here in Central Oregon the pace of job growth is also expected to be slower than the previous decade. Total employment is expected to rise 12 percent by 2029 compared with the staggering growth of about 40 percent between 2009 and 2019. One big difference in the forecast outlook is the timing of the forecast within the business cycle. The previous 10-year growth rate was particularly large due to the base year being at the worst of the Great Recession. These projections for the next 10 years have 2019 as the base year, which is the peak of the most recent expansion and we know that by the middle of 2020 we are in the midst of a new recession.
Population growth is expected to continue at a strong pace across Central Oregon. The COVID-19 pandemic may make the region even more popular for migrants due to lower population density, access to outdoor, physically distanced recreation, and the trend towards remote work. The industries expected to grow the fastest over the next 10 years are largely tied to an increasing population, including health care and construction, each expected to expand by roughly 20 percent. Health care is a non-discretionary expense. A larger population and an older population leads to more demand for health services. More people also means that we need more housing, with residential building construction expected to drive construction growth over the next decade.
Over the past 10 years there was significant diversification of the local economy with a rapid expansion of the professional sector. This is expected to continue over the next 10 years; professional and business services is projected to expand by 16 percent (+1,780) by 2029. Another industry that helped to diversify the local economy, particularly in Crook County, was information. This is a sector that includes the large data center projects in Prineville and a sector expected to continue to grow into the next decade.
Manufacturing, itself a very diverse industry across the region, will likely experience a variety of conflicting trends. Nondurable goods manufacturing, primarily beverage manufacturing, is only expected to add 250 jobs (+10%) by 2029, which is dramatically slower than the last decade. In other words, we do not expect to see beer, cider, or kombucha continue to expand at the rapid pace we have grown accustomed to. Durable goods manufacturing is expected to growth at a slower pace (+6%) than nondurable goods; however, this is being pulled down by expected losses in wood product manufacturing (-210 jobs). If you pulled wood products out of the durable goods sector, growth rates are closer to 15 percent as other forms of manufacturing continue to grow across the region, including aviation and aerospace, primary metals, and other high-tech manufacturing.
Another industry expected to see dramatically slower growth is the leisure and hospitality sector, including restaurants, hotels, recreation, and arts. This forecast for this industry was adjusted after the COVID-19 pandemic as these business have been particular hard hit by the most recent recession. Although the industry is expected to make a full recovery, it may take several years, which limits the long-term growth potential. Despite the COVID-19 headwinds, the industry is expected to add 1,080 jobs over the next 10 years (+7%).
You can download the industry employment projections here. Make sure to select the “Central Oregon” tab to see the local projections. We also have occupational projections that can be found here. Highlights from the occupational projections will be covered in an upcoming article.