Despite Oregon's strong exports to China, jobs lag
By MATEUSZ PERKOWSKI
Oregon is more dependent on exports to China than any other state in the U.S., with roughly one-fourth of its exported goods heading to that country, according to a state economist.
"We've just shot above everybody else in the nation," said Josh Lehner, economic analyst for the State of Oregon. "It's not especially bad to be tied to China's economy, especially when you consider their bad years are 7 percent growth."
If the Chinese economy turns out to be a bubble, with its upward trajectory suddenly dropping, Oregon would be in a particularly vulnerable position, Lehner said during the recent Oregon Association of Nurseries convention in Bend, Ore.
"If they had some sort of recession, it would not bode well for the Oregon economy," he said.
The state is already in rough financial shape.
Employment growth in Oregon is sluggish, with the state ranking 43rd in the nation in the rate of job creation, Lehner said. Unemployment is likely to remain high even as new jobs trickle in, he said.
"There's been no sizable movement in that indicator," Lehner said. "Unfortunately, we're still at the bottom of the pack right now."
For the state to experience strong economic growth, the housing market would have to rebound, he said.
The housing situation can "turn on a dime" due to demographic trends, but it's extremely difficult to predict how soon such improvement could occur, Lehner said.
Single-family home construction permits were fairly stable before rising sharply during the housing boom of the 2000s, and the steep decline in such permits mirrors the prior increase, he said.
Jobs are unlikely to come "roaring back" to Oregon's timber and wood products industry as long as housing remains anemic, he said.
The state should still be able to recover financially, since those sectors only comprise about 1 percent of the economy, down from more than 10 percent several decades ago, Lehner said.
Timber industry jobs also don't pay as much as they once did, and the industry has grown more reliant on mechanization, he said. "It takes a whole lot less employees to run the mills than two decades ago."
Nationally, the recovery is also unlikely to resemble a "V" shape of acute economic resurgence, Lehner said.
Recessions associated with financial crises take longer to emerge from, since people and companies must work through massive levels of debt, he said.
That's especially true now that federal economic stimulus dollars are tapering off, Lehner said. "The impact of the stimulus is waning considerably."