Year in Review 2016: Salem MSA

Year in Review 2016: Salem MSA

by Pat O'Connor

April 13, 2017

Revised payroll employment estimates for 2016 show that Oregon’s job growth slowed from its growth in 2015. Salem outpaced Oregon’s employment growth in 2016.

On an annual average basis, Oregon’s payroll employment grew by 51,900 jobs, or 2.9 percent, in 2016. That compares with a gain of 58,800 jobs, or 3.4 percent, in 2015.

Salem added 5,300 jobs in 2016 to grow 3.4 percent. In 2015, Salem’s employment growth was similar to the statewide growth rate, adding 5,300 jobs to grow 3.5 percent.

The Salem metro area was similar to Oregon and nation with the construction and manufacturing sectors showing the steepest losses during the recent recession.

Salem’s construction sector has shown fast growth during the past two years. The sector added 900 jobs (+11.5%) in 2015 and another 700 jobs (+8.0%) in 2016. However, Salem’s construction employment is still 800 jobs or 8 percent
below its 2007 prerecession level. Construction showed the largest percentage loss of any sector in Salem during the Great Recession.

Salem’s manufacturing employment also showed growth the past two years, although growth slowed significantly in 2016. The sector added 800 jobs (+6.6%) in 2015, but only 200 (+1.5%) in 2016. Within manufacturing in 2016, durable goods added 300 jobs, while nondurable goods shed 100 jobs.

Professional and business services recorded healthy employment gains in 2016, adding 800 jobs or 6.1 percent. The industry added 300 jobs in 2015. Professional and business services includes temporary staffing agencies. The staffing agencies are a bit of a bellwether industry. The industry is often one of the first to show declining employment as the general economy slows and enters a recession, but on the flip side it is also typically one of the first industries that will show employment gains when an economy starts to expand.

The Salem MSA’s public-sector employment level was up in 2015 and 2016. Overall the public sector added 1,000 jobs to grow 2.4 percent in 2016. The sector added 900 jobs, growing 2.2 percent in 2015. State education dropped 700 jobs in 2016, while local education added 1,300 jobs (+12.1%). The reason for these two large shifts is that Western Oregon University’s employment beginning in 2016 is now being counted in local education. In prior years, Western Oregon University’s employment was reported in state education. The school districts (K-12) in Marion and Polk counties did add some employment in 2016, but not nearly as much as the 1,300 job increase might suggest. The move in reporting Western Oregon University’s employment was responsible for a large majority of the Salem MSA’s job growth in local education in 2016.           

Benchmarking Process

The newly revised payroll employment numbers are the result of the annual benchmarking process. This revision process is conducted by Oregon Employment Department staff in cooperation with the U.S. Department of Labor, Bureau of Labor Statistics. Employment numbers for both 2015 and 2016 are revised. For the monthly data through September 2016, original survey-based estimates were replaced with universe employment counts from the Unemployment Insurance tax system. Numbers from October through December 2016 were then re-estimated using sample employment data from a survey of businesses.