Oregon Economic and Revenue Forecast, March 2014

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The quarterly forecast for the State of Oregon from the Oregon Office of Economic Analysis. These slides are from the Office's forecast release to the Legislature on February 12, 2014.

Transcript of Oregon Economic and Revenue Forecast, March 2014

  • 1. Oregon March 2014 Economic & Revenue Outlook February 12, 2014Mark McMullen & Josh Lehner Office of Economic Analysis

2. Oregon Economic Outlook 3. Economic Outlook Changes Blue Chip Consensus: 2014 Real GDP Growth 2.85 2.80 2.75 2.70 2.65 2.60 2.55 2.502.45 Jan2013FebMarAprMayJunJulAugSepOctNovDecJan2014 3 4. Businesses Profitable and Reaching Capacity Constrained Industries Adding to CapacityCapacity Constrained Industries Current Capacity Utilization Rate Relative to Historic Rates When Capacity Begins to Increase2013q4 Utilization Rate Relative to Historic Levels when Capacity begins to Rise15% Motor Vehicle-15Oil & Gas Food0%15Aerospace (3364-9) Plastics & Rubber (326)Plastic/RubPrimary Metal (331)ChemicalComp & ElecElectrical Equip (335)Petrol/CoalFood (311-2)PaperChemical (325) Petroleum & Coal (324)Printing-5%10Oil & Gas Extraction (211)Elec EquipFurniture5Machinery (333)AerospacePrimary Metal0Fabricated Metal (332)Machinery5%-5Motor Vehicle & Parts (3361-3)Fab Metal10%-10Computer & Electronic (334)Other MiningFurniture (337) ApparelWood ProductsPaper (322)-10%Mining ex Oil & Gas (212) TextilesPrinting (323) Wood Products (321)Nonmetallic MinApparel (315-6)-15% -10%-5%0%5%10%15%20%Textiles (313-4) Nonmetallic Mineral (327)Capacity Change from 2011q4 to 2013q44 5. How Worried Should We Be? Oregon's Unemployment Rate(s)Labor Force Participation Rate 16 years and older14251270% 68%20 1066% 15862%6104 5260% 58% 56%0 Jan-0464%0 Jan-06Jan-08 U-3 (lhs)Jan-10Jan-12U-6 (rhs)54% 197019801990 U.S.20002010Oregon5 6. Labor Supply Response ExpectedOregon's Labor Market 6 MMA, Year-over-Year GrowthLabor Force Growth on the Way? Oregon Job Growth Minus Labor Force Growth10%6%8%4%6%2%4% 2%0%0%-2%-2%-4%-4% -6%-6%-8%-8%Jan-78Jan-85Jan-92Labor ForceJan-99Jan-06Total NonfarmJan-13-10%Jan-78Jan-85Jan-92Jan-99Jan-06Jan-136 7. Job Growth in Oregon Employment by Region Over the Great RecessionOregon Employment -20%Year-over-Year Job Gains 50,000-15%-10%-5%0%5%3.5%Columbia Gorge40,0003.0%Portland MSA30,0002.5%Northeast Oregon20,0002.0%10,0001.5%Forecast -->OregonNorth Coast Willamette Valley 01.0%-10,0000.5%Southern-20,0000.0%Central OregonPrivatePublicSoutheast OregonSouth CoastGrowth Rate (rhs) Recession LossesDec '13 Relative to Peak7 8. Bend and Medford slow some, but the party has reached Salem Salem Private Sector Employment GrowthPrivate Sector Employment Seasonally Adjusted, 3 Month Moving Average12% 10%0%8% Oregon-5%6% 4% 2%Medford-10%0% -2% -4%-15% Bend-6% -8%-20% May-07-10% May-09May-11May-13Jan-80Jan-85Jan-90 Jan-95 PrivateJan-00 Jan-05 Current RateJan-108 9. Housing Outlook Short Run StallLong Run OutlookInterest Rates Slow Housing's Rebound 30% 25%Housing Starts Forecast 6%Mortgage Rate --> 30 Yr Fixed2.0 5%15%5%25,000 1.520,000 4%