Construction jobs grew by 11.2 percent in the Portland area last year, making it the strongest growth industry in the Portland area. (
The Portland area’s eight-year run of uninterrupted growth shows no sign of ending any time soon, according to a report out Wednesday. But growth will slow, if only because the region’s economy is bumping up against a ceiling: “full employment.”
“I think the really fast growth period is probably behind us, and we’re entering a lower growth period,” said the study’s co-author, Portland State University economist Tom Potiowsky. “But there’s nothing that says a recession is on the immediate horizon.”
The report from PSU’s Northwest Economic Research Center is the third major piece of Oregon economic data out in the past two days. It follows Tuesday’s release of the state’s quarterly economic and revenue forecast and the monthly unemployment numbers, which put Oregon’s jobless rate at the lowest point on record: 3.7 percent.
All three analyses tell the same story: Oregon’s economy is enjoying one of its longest winning streaks in history, but growth has slowed considerably over the last several months.
To a large degree, Oregon has benefited from a robust national economy. But the state – and the Portland area – has been outperforming the nation as a whole.
Migrants from other part of the country are a big part of Oregon’s advantage, according to Potiowsky. Counter to the Portlandia myth (“where young people go to retire,”) economic research suggests the people moving into the region tend to be highly educated and highly employable.
Regional per capita income grew just 25 percent over the decade between 2006 and 2016, according to the PSU report, a period that included the Great Recession. But Potiowsky’s study projects it could grow as much as 70 percent in the next decade.
“For better or for worse, we’re a desirable place for people to live,” Potiowsky said. “The last seven years, you really can see these high, five-digital, low six-digit salaries that are occurring here. That explains a lot in terms of the housing prices, rents and so-on.”
Indeed, there are downsides to full employment.
Inflation is one. Though it remains low by historical standards – 2.14 percent last year, in the Portland area – housing costs in particular have been rising by double-digit percentages, pricing many people out of the market.
And in many ways, the term “full employment” is a misnomer. It’s an indication the job market is extremely tight, not that everyone who wants or needs a job can find one.
Especially in an increasingly high-tech economy, job-seekers may lack the specialized training or experience employers want. Those who have been out of work for a long period may find their skills are obsolete, or that employers look skeptically at a resume with a big gap on it.
“When you have full employment, it doesn’t mean all the hardships in terms of getting a job are gone,” Potiowsky said.
Still, with unemployment in the Portland area at just 3.5 percent the circumstances for the average worker are better than they have been for years. Oregon is enjoying an economic “sweet spot,” according to Potiowsky.
However, he said economic good times are analogous to sitting down for a few beers. The first one might feel great, and maybe the second one, too. But by the time you’re on the third or fourth, you realize something’s gone wrong.
“The sweet spot doesn’t appear to be a place you land on,” Potiowsky said. “You sort of pass through it.”
— Mike Rogoway; twitter: @rogoway; 503-294-7699