Oregon in the doldrums; delay in pickup seen
Oregon's economy through midyear remained unhealthy and recovery is months -- if not longer -- away. The continued weakness is attributed to near-record interest rates, lower household incomes, and rising taxes -- all factors that resulted in a slower demand for goods.
The outlook is for more of the same, reflecting the national economy and, in some cases, a bigger slump in some sectors of the Oregon economy.
U.S. Bancorp's Oregon Business Barometer, a quarterly economic forecast prepared by the holding company's economic department, shows slight gains in Oregon's business activity over a year ago. But most, if not all, of the change is due to inflation. The index reached 186.4 in June, down 0.5 percent for the second quarter and up 4.4 percent from a year ago.
The wage and salary employment index paints a considerably more dismal picture. June's level of 131.2 marks a 2 percent decline from a year ago and 6. 5 percent decline from its peak a year and a half ago.
"Oregon's activity will stay on hold until interest rates and inflation expectations recede," says Dr. Kevin Kelly, vice-president and head of Bancorp's economic department. "Some evidence of both of these events exist, but it will likely be three to six months before any real gains are recorded."
The state's employment reached 1.22 million workers in June. But the increase of 60,000 for the quarter was a less than seasonal gain, resulting in a 0.5 percent increase in unemployment, from 9.2 percent in March.
Oregon's lumber and wood products industries added workers in this year's second period but remained at depressed levels as new home sales notionally continued to slide. Year-to-date comparisons show total permits down 14 percent from 1980 and 49 percent from 1979.
Bumper output will be turned out on most Oregon farms and ranches this year, as it will across the nation. Cash farm income from products sold this year in Oregon is likely to average 5 to 10 percent higher than last year. The gain in sales dollars, however, will not fully offset the estimated 15 to 16 percent increase in farm production costs.