Oregon Economic Update · Economic Analysis. 23. Outlook A Bit Better. Supply Constraints - Lending...
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Oregon Economic Update Prepared for: LGIM August 29, 2019 Mark McMullen Oregon State Economist
Transcript of Oregon Economic Update · Economic Analysis. 23. Outlook A Bit Better. Supply Constraints - Lending...
Oregon Economic Update
Prepared for:LGIM August 29, 2019
Mark McMullenOregon State Economist
U.S. Economic Backdrop
Oregon Office ofEconomic Analysis
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U.S. Coincident Indicators
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Subjective Data-Driven
Forecaster Fears
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Issue #1: Yield Curve
Fed
Tigh
teni
ng
De
c 20
15-D
ec 2
018
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Issue #1: Yield Curve
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Issue #2: Trade War
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Issue #2: Consumers Will Face Latest Escalation
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Issue #2: Oregon on Net OK So Far
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Baseline Outlook: Soft Landing from Below
Oregon’s Economy: Recent Performance & Outlook
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Oregon Data Flow Still Good Except Manuf. Hrs
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Manufacturing Weakness
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Workers Are Hard to Find
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Economy is Slowing, but Outlook Remains Stable
Structural Drags• Demographics
Cyclical Drags• Supply Constraints• Slack is gone
Policy Drags• Interest rate hikes• Federal spending• No more tax cuts
Oregon’s Economy: Issues & Risks
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Economic Growth Translating into Income Gains
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Issue: Middle-Wage Jobs
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Oregon’s Highest Incomes Remain Relatively Low
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Slowing Across the Board
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Slowing Across the Board
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Issue: Housing Supply
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Outlook A Bit Better
Supply Constraints- Lending- Lots- Land Use- Labor
Demand Constraints- Demographics- Finances
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Affordability
Qualityof Life
EconomicStrength
PolicyThe Housing TrilemmaCities face tradeoffs in terms ofhousing affordability, job availabilityand quality of life. Comparing the100 largest MSAs in the country.
Source: David Albouy, BEA, BLS, Census, IHS Global Insight, Oregon Office of Economic Analysis
• Youngstown, OH
Detroit, MI •
Cincinnati, OH • • Houston, TX
• Atlanta, GA• Phoenix, AZ
• Omaha, NE
Oklahoma City, OK •
Des Moines, IA•
• Seattle, WA
Portland, OR •San Francisco, CA •
• Boise, IDProvidence, RI •
Sacramento, CA •
• Cleveland, OH
• Indianapolis, IN
• St Louis, MO
Minneapolis, MN •• Milwaukee, WI
• Philadelphia, PA
• Charlotte, NC
San Jose, CA •
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Waiting for Infrastructure Week
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Private Investment Is Healthy in Most Industries
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Of Note: Warehousing Of All Types Is Booming
State Finances (Time Permitting)
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Commercial Activity TaxHB 3427 (2019)
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Reserves Continue to Grow
Effective Reserves ($ millions)End
2017-19End
2019-21
ESF $619.7 $854.4RDF $595.3 $918.9Reserves $1,215.0 $1,773.3
Ending Balance $2,321.6 $290.5Total $3,533.9 $2,063.8
% of GF 16.4% 9.7%
0%3%6%9%12%15%18%21%24%
$0.0$0.5$1.0$1.5$2.0$2.5$3.0$3.5$4.0
99-01
01-03
03-05
05-07
07-09
09-11
11-13
13-15
15-17
17-19
19-21
21-23
23-25
Biennium
Oregon Budgetary Reserves (billions)Educ. Stability Fund Rainy Day Fund Gen. Fund Ending Balance
Forecast -->
Percent ofGeneral Fund -->
Source: Oregon Office of Economic Analysis
Pre- 2019-2021 Budget
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www.OregonEconomicAnalysis.com@OR_EconAnalysis
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