Oregon's Economy: An Overview

Source

Cheadle Lake at sunset
Sunset at Cheadle Lake in Lebanon. (Oregon State Archives Photo)
Employment Department, Workforce and Economic Research Division

Oregon’s economy entered the 2017–2019 biennium with job growth that was faster than the nation and an unemployment rate that reached an historic low. Oregon ranks among the top 10 states with the fastest annual job growth. In early 2018, Oregon’s unemployment rate was a steady 4.1%, a record low with comparable data going back to 1976. Oregon’s unemployment rate is similar to the U.S. unemployment rate.

During the past three decades, Oregon made the transition from a resource-based economy to a mixed manufacturing and marketing economy with an emphasis on high technology. Oregon’s hard times of the early 1980s signaled structural changes had occurred in the traditional resource-based economy, centered on timber. The state worked to develop new economic sectors to replace older ones. Most important, perhaps, was the state’s growing high-tech sector, concentrated in the three counties around Portland. However, rural Oregon counties were generally left out of the shift to a new economy. 

As with the nation, Oregon’s expansion in the years leading up to the Great Recession was fueled by growth in construction and services. The recession erased construction’s job gains and devastated the economy to the extent that employment in 2010 was roughly at the same level as in 2000. Job growth was slow during the first three years of recovery but picked up speed in 2013 as all the major sectors began adding jobs. 

Oregon is one of the most trade-dependent states in the nation and, to some extent, economic activity in other countries helps drive the state’s economy. The value of exports from Oregon to foreign countries was $21.9 billion in 2017. The state’s largest trading partners are China, Canada, Malaysia, South Korea and Japan. Oregon’s trade with other U.S. states far exceeds its trade with foreign nations.

The aging population will factor into the future of Oregon’s economy. The eldest members of the Baby Boom generation are becoming eligible for Social Security benefits, and many are considering retirement. Nearly one out of four workers in Oregon is already 55 years or older. As the generation ages, employers will need to find new workers with the skills to replace their retiring workforce. At the same time, the growing number of retirees will demand more leisure and health care services.

More people move to Oregon than move out of Oregon. This in-migration is a response to job opportunities in the state and is leading to job growth because the expanding population needs more goods and services. Oregon’s population grew by 64,700 people in 2017 to a total of 4.1 million. Natural increase contributed just 7,900 to population growth, while net migration was responsible for 56,800 of the increase, a clear indication that Oregon’s economic growth relies on people moving to the state.

Oregon's Top Ten Commodities in 2017