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Central Oregon economy improves

Quarterly index shows gains in employment and tourism numbers

By Elon Glucklich / The Bulletin

Published: May 26. 2013 4:00AM PST

 

Editor’s note: The Bulletin has partnered with the University of Oregon’s College of Arts and Sciences and Department of Economics to produce the Central Oregon Business Index. The index provides a regular snapshot of the region’s economy using economic models consistent with national standards. The index, exclusive to The Bulletin, appears quarterly in the Sunday Business section.

Central Oregon’s economy continued to recover at the start of 2013, according to an economic index released today.

An uptick in Deschutes County’s total payroll, a decline in new unemployment claims and higher lodging tax revenue in the city of Bend drove a modest increase in the Central Oregon Business Index.

The index, compiled by University of Oregon economist Timothy Duy, tracks nine indicators of economic activity in Central Oregon each quarter, measuring changes to Deschutes County unemployment claims and payroll, building permits and lodging tax revenue, Redmond Airport activity, as well as home sales and tons of garbage delivered to the Deschutes County Solid Waste Department.

Those indicators give a snapshot of the housing and job markets, tourism climate and per-capita output.

In the first quarter, seven of the nine indicators moved in a positive direction. The other two, Central Oregon home sales and Deschutes County building permits, declined compared with the fourth quarter, but are still near four-year highs.

“We’re seeing more consistent evidence that we’ve turned a corner in the last six months,” Duy said. “I’m not going to say it’s runaway growth, but certainly more of a robust pace of activity than we’ve seen in the past few years.”

More than 62,300 Deschutes County residents were employed in nonfarm jobs in the first quarter, the highest level since the first quarter of 2009, according to the index.

Average monthly unemployment claims dropped to 2,255 in Deschutes County for the first quarter. That’s the lowest monthly average since the second quarter of 2006, and down from a recession peak of 4,042 at the end of 2008.

“The private sector has apparently been on a bit of an upswing,” Duy said.

In Deschutes County, a monthly average of 52,280 residents were employed in private-sector jobs in the first quarter, up from 49,763 to start 2010, according to Oregon Employment Department data.

In Bend, meanwhile, the rush of tourists seems to be back. Adjusted for inflation, the $1.48 million in first quarter lodging tax revenue is the highest first-quarter figure in the seven years of the index, just beating the start of 2007.

That figure bodes well for tourism and retail sales numbers throughout the year, Duy said, especially during peak travel months in the summer, when room tax collections increase.

The two indicators that dipped — home sales and Deschutes County building permits — have still climbed considerably from their late 2008 and early 2009 troughs. A slight drop from the fourth quarter of 2012 isn’t much of a concern, Duy said.

“Compare the (first-quarter) monthly average of 82 building permits with 46 in the first quarter last year, and it’s quite an improvement,” he said.

Except for tourism, the growth hasn’t yet made up for the huge losses when the economy tanked in 2008. But the modest gains come as a growing number of national surveys show an uptick in consumer confidence and spending.

A U.S. Commerce Department report last month showed increased sales of clothes, electronics and cars by consumers. The national economy grew at a 2.5 percent rate in the first quarter, compared with 0.4 percent from October to December 2012.

Heightened consumer activity seems to be canceling out some of the negative effects brought on by sequestration, the automatic $82 billion in federal spending cuts triggered in March, after Congress failed to reach an agreement on more comprehensive cuts at the start of the year.

The sequester’s impact has been limited in Oregon, Duy said. States with a larger national defense presence and more federal government workers were likely to see bigger slowdowns.

“I think national growth is being constrained” by sequestration, Duy said. “But the impact is no more than had been expected, if not a little less, given what seems to be an improving job market.”

Overall, the last four quarters have shown modest but stable growth in Central Oregon, Duy said. He expects the numbers to keep moving in positive territory, with home sales and new building activity centered around Bend driving new job growth.

“When we think that the housing bubble took off in 2003, that means we’re a decade past it. We’ve had some time to move through the negative cycles, and the healing process is moving along,” he said.

— Reporter: 541-617-7820

eglucklich@bendbulletin.com