Economists share guarded optimism with Rotary Club
Following the Rotary Club of Portland's rousing version of the song 'I've Got Sixpence' at its annual economic forecast event, three of Oregon's top economists drew a picture of a promising Ñ though modest Ñ economic rebound for the state in 2005.
'The Oregon economy is on its way to recovery É but it's going to be mild growth,' State Economist Tom Potiowsky told the Rotarians on Tuesday at the Governor Hotel. 'It's been a long haul.'
Job growth in Oregon last year was 'disappointing,' he said, though some sectors, including semiconductor manufacturing and professional practices, are predicted to rise slightly this year. In addition, he said Oregon's higher-than-average population growth continues to contribute to the state's above-average unemployment rate.
At last year's forum, Potiowsky predicted the state's unemployment rate would fall from 7.3 percent to 6.5 percent in 2004; it ended the year at 7.1 percent or 124,791 unemployed people. He stuck with his 6.5 percent prediction for 2005.
John Mitchell, regional economist for U.S. Bancorp, and local economist Bill Conerly joined Potiowsky for the forecasting event. The three talked of the lumbering rise in employment, high energy costs, the falling U.S. dollar and other factors that will impact Oregon's economy in the coming year. Natural gas, oil and electricity costs all are slated to increase this year.
Mitchell, who addressed national economic issues, called 2004 'the best year of this young century,' citing stronger U.S output and rising employment numbers. He said American consumers were 'unstoppable' in their spending, and businesses shelled out more for software and other equipment than they have in recent years.
Those trends are likely to continue this year, as is the Federal Reserve's tack of raising interest rates, though the pace will be a measured one, Mitchell said. He also cautioned about the impact that terrorist attacks or other events could have on the economy. Of Oregon's budgetary woes he said, in verse, 'The budget conundrum doth remain.'
Potiowsky said the state will face an economic fallout from the November election, though the effects of the Measure 37 land compensation law, the gay marriage amendment and other measures have yet to be seen. The pending sale of Portland General Electric, as well as a state Supreme Court decision on a Public Employees Retirement System rate cap, also are likely to influence the state's economic year, he said.
Conerly closed the forum saying that many manufacturers overproduced last year. Businesses may want to consider dialing back a bit, eliminating large customer discounts and adding additional employees to reduce overtime costs, he said.
Conerly also hinted at the 'coming labor shortage' that will materialize when baby boomers begin retiring in a few years, and he waxed philosophic when talking of the businesses he's seen succeed and fail in spite of the economic times.
'The economy,' he said, 'is the environment in which you work, but it is not your destiny.'