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WINCHESTER -- Oregon and Douglas County are creeping out of the recession but, according to the state economist, the recovery will be "much more subdued as we come forward."
The brightening economic forecast dominated the Roseburg Area Chamber of Commerce's 2004 Business Outlook Forum, which drew about 130 people to the Whipple Fine Arts building at Umpqua Community College Wednesday morning.
State economist Tom Potiowsky joined a lineup of high-profile speakers, including David Frohnmayer, president of the University of Oregon; John Sessions, professor of forestry and forest engineering at Oregon State University; Doug Robertson, Douglas County commissioner; and Mark Dennett, president of a Southern Oregon-based tourism consulting firm.
Frohnmayer, the keynote speaker, advocated greater investment in higher education, a critical player in the emerging "knowledge economy." He noted that the University of Oregon in 2002 received $70 million in state tax money and spent $700 million in the local and regional economy.
"That's a 10-to-1 return on investment," he said. "If we were all on the stock market, we'd want to buy that stock on the basis of its equity value. And that's a year-in and year-out return."
Robertson and Sessions discussed the economic and environmental merit of salvaging timber and replanting stands after catastrophic fires in Oregon, including the 500,000-acre Biscuit Fire of 2002.
CONFIDENCE HIGH
Potiowsky and Graham Slater, the Oregon Employment Department's research administrator, presented a broad-based view of local, state and national economic trends. Using a slew of graphs and charts, they discussed the cyclic nature of both Oregon and Douglas County's economy, while forecasting where things are headed.
"Consumer confidence is at the highest level since September of 2002 ... all the signs are there, finally, for a very good, strong U.S. recovery and Oregon's going to get pulled along with this recovery," Potiowsky said.
As in the 1991 recession, this most recent recession hit the manufacturing sector hardest, but that sector has changed significantly since then, Potiowsky said.
In 1991, the lumber and wood products industry had a 6.1 percent share of the real gross state product. In 2001, that sector accounted for a share of just 1.9 percent.
In the early '90s, the state campaigned to diversify its base, especially working to develop high-tech industry, Potiowsky said. But with the diversification, Oregon actually became more manufacturing oriented, just making a greater assortment of products.
"It's no wonder, especially with this recession being a manufacturing-based recession, that we got hit so hard," he said.
The recession has hit the Portland metro area hardest, home to half the state's jobs.
Also taking a blow in the recent recession has been the state's general fund, Potiowsky said. While the unemployment rates of the most recent recession -- Oregon leads the nation at 7.6 percent (seasonally adjusted) for October -- were high, it doesn't match the state's recession of the early '80s, when Douglas County posted an annualized average of 17.2 percent unemployment.
"Our drop of general fund revenues is worse proportionally (in Oregon) than it was back in '81 or '82," Potiowsky said. "In fact, the last time we've had this large of a drop was in the late 1930s during the Great Depression."
Because the current recession hit the incomes of high wage-earners particularly hard -- about 85 percent of the general fund revenues come from personal income taxes -- the state's coffers dropped precipitously, the economist said.
"So the unemployment situation is not as bad (as the early '80s), but the income base is what got hit."
Oregon is creeping more slowly out of this recession than the past two, Potiowsky added. Since the recession officially ended in 2001, the state has actually posted a 1 percent decline in total jobs.
Again, he said, manufacturing plays a key role.
"Manufacturing has a lot of excess capacity to it, so as demand starts to increase ... it's going to take a while before that excess capacity gets used up and we start to see more employment in the manufacturing area. We're not looking at the big mountain of growth here in the mid-1990s. We think it's going to be much more subdued as we come forward."
The lumber industry is stabilizing but, according to state research, that sector will lose about 200 more jobs in Douglas County over the next 10 years, while all other sectors show job growth.
Statewide, Potiowsky said, "We're only looking at a 1 percent average growth for employment for all of 2004, which is relatively soft growth, and then finally about 2 percent to 2.4 percent getting into 2005."
CHANGING COUNTY JOBS
Slater, the OED research administrator, said that while unemployment is high in Douglas County -- the 8.5 percent rate for October was fourth-highest in the state -- it has actually narrowed the gap with the state's average over the past year.
Still, he said, rural areas have a harder time absorbing job losses than metro areas.
There's been a plus and a negative to the strong in-migration Oregon has experienced over the past decade, Slater said. Every county in both Oregon and Washington posted population growth between 1990 and 2000.
On the plus side, "the idea of population increasing in rural counties is something to be very, very grateful for," he said, noting that "there's not a lot of states that can make that claim."
Conversely, it means more people looking for work. "That makes it a whole lot harder to bring down your unemployment rate than if you lose 60,000 jobs but 80,000 people moved away. Then your unemployment rate stays at 2 percent."
Other research shows that in 1958, 45 percent of all jobs in Douglas County, almost one in two, were in the lumber industry. In 2002, manufacturing, including lumber, made up 17 percent of the employment pie. Government, including tribal government, was the largest local sector at 20 percent. In the past year, manufacturing and government lost the most jobs locally -- about 500 and 325, respectively.
Slater said take-home pay, for both the state and Douglas County, was at its peak in Oregon in 1978 when it averaged out across all industries at about $34,000 (in current dollars).
In 2002, average wages in Douglas County were just above $28,000, below that of Oregon ($34,000) and the U.S. ($36,500), but narrowing the gap in the past two years.
"We'll never get back there, because the economy was smaller and it was dominated by a couple high-wage industries that were doing incredibly well -- lumber and construction," Slater said. "Even when some (of those jobs) came back, they came back often at much lower wages, and we've never made that ground back."
Slater said Douglas County continues to be a magnet for people age 65 and over. Between 1990 and 1997, 60 percent of the county's new residents were of retirement age, compared to 25 percent in Lane County and 11 percent in the state overall.
Slater called that trend "a huge shift for your economy ... . This is a very big deal for the kinds of companies that are going to thrive in your area."
While the lumber industry is expected to shed roughly 200 jobs over the next decade, all other local sectors are forecast to post a collective 4,410 new jobs, an 11.8 percent gain. That puts Douglas County in the middle of the pack for job growth statewide, Slater said. The county's services and the retail trade sectors are expected to lead job growth over the next decade, posting roughly 1,500 and 1,300 new jobs, respectively.
"Services is where all the health care and social services will be," Slater said. "Incidentally, services does not have to be low wage. Services includes consultants and doctors and hospitals, computer companies ... . It's not necessarily minimum-wage work."
* You can reach reporter Chris Casey at 957-4216 or by e-mail at ccasey@newsreview.info
The brightening economic forecast dominated the Roseburg Area Chamber of Commerce's 2004 Business Outlook Forum, which drew about 130 people to the Whipple Fine Arts building at Umpqua Community College Wednesday morning.
State economist Tom Potiowsky joined a lineup of high-profile speakers, including David Frohnmayer, president of the University of Oregon; John Sessions, professor of forestry and forest engineering at Oregon State University; Doug Robertson, Douglas County commissioner; and Mark Dennett, president of a Southern Oregon-based tourism consulting firm.
Frohnmayer, the keynote speaker, advocated greater investment in higher education, a critical player in the emerging "knowledge economy." He noted that the University of Oregon in 2002 received $70 million in state tax money and spent $700 million in the local and regional economy.
"That's a 10-to-1 return on investment," he said. "If we were all on the stock market, we'd want to buy that stock on the basis of its equity value. And that's a year-in and year-out return."
Robertson and Sessions discussed the economic and environmental merit of salvaging timber and replanting stands after catastrophic fires in Oregon, including the 500,000-acre Biscuit Fire of 2002.
CONFIDENCE HIGH
Potiowsky and Graham Slater, the Oregon Employment Department's research administrator, presented a broad-based view of local, state and national economic trends. Using a slew of graphs and charts, they discussed the cyclic nature of both Oregon and Douglas County's economy, while forecasting where things are headed.
"Consumer confidence is at the highest level since September of 2002 ... all the signs are there, finally, for a very good, strong U.S. recovery and Oregon's going to get pulled along with this recovery," Potiowsky said.
As in the 1991 recession, this most recent recession hit the manufacturing sector hardest, but that sector has changed significantly since then, Potiowsky said.
In 1991, the lumber and wood products industry had a 6.1 percent share of the real gross state product. In 2001, that sector accounted for a share of just 1.9 percent.
In the early '90s, the state campaigned to diversify its base, especially working to develop high-tech industry, Potiowsky said. But with the diversification, Oregon actually became more manufacturing oriented, just making a greater assortment of products.
"It's no wonder, especially with this recession being a manufacturing-based recession, that we got hit so hard," he said.
The recession has hit the Portland metro area hardest, home to half the state's jobs.
Also taking a blow in the recent recession has been the state's general fund, Potiowsky said. While the unemployment rates of the most recent recession -- Oregon leads the nation at 7.6 percent (seasonally adjusted) for October -- were high, it doesn't match the state's recession of the early '80s, when Douglas County posted an annualized average of 17.2 percent unemployment.
"Our drop of general fund revenues is worse proportionally (in Oregon) than it was back in '81 or '82," Potiowsky said. "In fact, the last time we've had this large of a drop was in the late 1930s during the Great Depression."
Because the current recession hit the incomes of high wage-earners particularly hard -- about 85 percent of the general fund revenues come from personal income taxes -- the state's coffers dropped precipitously, the economist said.
"So the unemployment situation is not as bad (as the early '80s), but the income base is what got hit."
Oregon is creeping more slowly out of this recession than the past two, Potiowsky added. Since the recession officially ended in 2001, the state has actually posted a 1 percent decline in total jobs.
Again, he said, manufacturing plays a key role.
"Manufacturing has a lot of excess capacity to it, so as demand starts to increase ... it's going to take a while before that excess capacity gets used up and we start to see more employment in the manufacturing area. We're not looking at the big mountain of growth here in the mid-1990s. We think it's going to be much more subdued as we come forward."
The lumber industry is stabilizing but, according to state research, that sector will lose about 200 more jobs in Douglas County over the next 10 years, while all other sectors show job growth.
Statewide, Potiowsky said, "We're only looking at a 1 percent average growth for employment for all of 2004, which is relatively soft growth, and then finally about 2 percent to 2.4 percent getting into 2005."
CHANGING COUNTY JOBS
Slater, the OED research administrator, said that while unemployment is high in Douglas County -- the 8.5 percent rate for October was fourth-highest in the state -- it has actually narrowed the gap with the state's average over the past year.
Still, he said, rural areas have a harder time absorbing job losses than metro areas.
There's been a plus and a negative to the strong in-migration Oregon has experienced over the past decade, Slater said. Every county in both Oregon and Washington posted population growth between 1990 and 2000.
On the plus side, "the idea of population increasing in rural counties is something to be very, very grateful for," he said, noting that "there's not a lot of states that can make that claim."
Conversely, it means more people looking for work. "That makes it a whole lot harder to bring down your unemployment rate than if you lose 60,000 jobs but 80,000 people moved away. Then your unemployment rate stays at 2 percent."
Other research shows that in 1958, 45 percent of all jobs in Douglas County, almost one in two, were in the lumber industry. In 2002, manufacturing, including lumber, made up 17 percent of the employment pie. Government, including tribal government, was the largest local sector at 20 percent. In the past year, manufacturing and government lost the most jobs locally -- about 500 and 325, respectively.
Slater said take-home pay, for both the state and Douglas County, was at its peak in Oregon in 1978 when it averaged out across all industries at about $34,000 (in current dollars).
In 2002, average wages in Douglas County were just above $28,000, below that of Oregon ($34,000) and the U.S. ($36,500), but narrowing the gap in the past two years.
"We'll never get back there, because the economy was smaller and it was dominated by a couple high-wage industries that were doing incredibly well -- lumber and construction," Slater said. "Even when some (of those jobs) came back, they came back often at much lower wages, and we've never made that ground back."
Slater said Douglas County continues to be a magnet for people age 65 and over. Between 1990 and 1997, 60 percent of the county's new residents were of retirement age, compared to 25 percent in Lane County and 11 percent in the state overall.
Slater called that trend "a huge shift for your economy ... . This is a very big deal for the kinds of companies that are going to thrive in your area."
While the lumber industry is expected to shed roughly 200 jobs over the next decade, all other local sectors are forecast to post a collective 4,410 new jobs, an 11.8 percent gain. That puts Douglas County in the middle of the pack for job growth statewide, Slater said. The county's services and the retail trade sectors are expected to lead job growth over the next decade, posting roughly 1,500 and 1,300 new jobs, respectively.
"Services is where all the health care and social services will be," Slater said. "Incidentally, services does not have to be low wage. Services includes consultants and doctors and hospitals, computer companies ... . It's not necessarily minimum-wage work."
* You can reach reporter Chris Casey at 957-4216 or by e-mail at ccasey@newsreview.info
