Region's economy slowly recovers
Business groups say job creation is key to real improvement
After suffering through the worst recession in more than 50 years, the Portland-area economy is finally beginning to recover, say two reports released Wednesday morning.
According to a report by the Portland Business Alliance and a number of other business-oriented groups, the region's economy is improving faster than some other metropolitan areas in the country. But the Portland-area economy has a long way to go because it fell so far below the national average during the recession that began in 2007, says the 2011 Check-Up on the Region's Economic Health.
'We need to add more family-wage, private- sector jobs to create the kind of community we all want,' Alliance Board Chairman J.E. Isaac told reporters.
The other report was a panel discussion called the annual Housing Forecast, hosted by the Home Builders Association of Metropolitan Portland on Wednesday morning at the Oregon Convention Center. Three housing experts agreed that after suffering a ruinous few years, the national and regional housing markets were stabilizing and should begin growing again in 2012 and 2013.
'Things are getting better, slowly but surely. The worst is behind us,' Robert Denk, the National Association of Home Builders' vice president for forecasting and analysis, told hundreds of builders who specialize in single-family homes.
Todd Birch, president of the Portland-based New Home Trends forecasting business, agreed, saying that demand for new homes already is increasing.
'Recent job growth and in-migration are starting to put pressure on the existing housing stock,' said Birch, noting that some residents already are paying more to rent their home than they would pay to buy it.
In fact, work already is underway on the first large-scale residential subdivision in the Portland area in four years. It envisions 200 homes in the Pleasant Valley area of Gresham. The first phase has 23 lots and is scheduled to be completed in January. Forty to 50 lots are targeted for the second phase.
The upscale apartment market also is stirring since the wave of condominium conversions over the past few years. Developer Bob Ball recently announced plans to build a new market-rate apartment building in the Pearl District. Ball, who previously specialized in converting historic buildings to condos, feels the economy can support such a project.
Called The Parker, the six-story, 177-unit building will cover the block between Northwest Pettygrove and Quimby streets and Northwest 12th and 13th avenues. Ball says it will cost $35 million and be privately financed, as opposed to such other projects as the low-income apartments being built in the South Waterfront neighborhood.
'I've been studying the market, and it's time to get back in,' says Ball, whose last project was The Wyatt, a condominium tower in the Pearl District that converted to apartments after the recession hit.
'We've lost a lot of ground'
The Portland Business Alliance report suggests that projects such as The Parker could be rare for a while. It found that average Portland-area wages had declined during the past 40 years in comparison to similar regions across the country. In some cases, they were 16 percent to 20 percent below other regions' wages. The report also found that private- sector job creation had stalled in the Portland area after 1997 and steadily declined after 2000, with the losses exacerbated by the most recent recession.
'We've lived through a decade with two recessions and weak expansion in between, so it should come as no surprise that we've lost a lot of ground,' said John Topogna, president of the ECONorthwest economic consulting firm that worked on the report.
The report also found that between the peak of the recession in February 2008 and early 2010, the Portland area lost 81,200 jobs. In 2011, the average Portland area income was $40,950, compared to the U.S. average of $42,158. The difference was even greater compared to comparable metropolitan areas. For example, the average 2011 income was $47,008 in Minneapolis, $47,696 in Denver and $51,053 in Seattle.
But the report said both the country and Portland area are beginning to recover from the recession. Among other things, close to 18,000 jobs have been added in the Portland area since the bottom of the recession in early 2011. The Gross Metropolitan Product in the Portland area is growing faster than the rest of the nation - 4 percent versus 3 percent.
Portland's economy has fallen so far below the rest of the region that it will likely take years to catch up, however. According to the report, the Gross Metropolitan Product in the Portland area is still 2 percent lower than when the recession began, even though the average for U.S. metropolitan regions had recovered to pre-recession levels by the end of 2010.
The report sees several reasons for optimism, though. Among other things, private- and public-sector economic development groups have formed a single organization - Greater Portland Inc. - to promote the region. Elected officials and political candidates are making job creation their top issue. The 2011 Oregon Legislature reformed the state's education system to ensure that more students graduate from high school and college.
A number of production plants also are growing, including Daimler Trucks North America, SoloPower and Intel. And venture capitalists invested $173 million in Oregon businesses in 2010, the most ever.
These and other issues will be discussed by political and business leaders at the annual Oregon Leadership Summit, Dec. 12 and 13 at the convention center.
'Creating jobs has to be a collaborative process, and the elected leadership and business community are worker closer together than ever before,' said Duncan Wyse, president of the Oregon Business Council, the group cosponsoring the summit.