Judging by the fourth quarter of last year, Central Oregon should not experience a recession anytime soon, according to data released in the Central Oregon Business Index.
The index rose 1.9% in the final three months of 2019, compared to the same period the year before.
For workers in Central Oregon it means jobs; for the tourism industry it means customers, and for the housing industry, it means higher prices. Employers added 1,100 jobs during the quarter, a 3.9% gain over the same period the year before, said Tim Duy, author of the index and professor of practice in economics at the University of Oregon. Nationally, the job growth for the fourth quarter of 2019 was 1.4% over the same period the year before, he said.
“The regional economy continues to build on the longest U.S. economic expansion in history,” said Duy. The base index of 100 is based on conditions in 1998. At the end of 2019, the index was 148.7.
The Central Oregon Business Index provides a snapshot of business activity by evaluating nine economic sectors including: the labor market, tourism, housing, trash and the state economy.
The labor market is tight, said Nick Di Spaltro, owner and CEO of BMS Technologies in Bend.
With 43 employees, Di Spaltro is always looking to hire more workers, but cannot until he completes his new 35,000-square-foot facility in Juniper Ridge.
His business, which supplies statements and invoices for businesses, is currently spread out between two locations, he said.
“We could use more people, but we’re pretty crammed in now,” Di Spaltro said. “One of the benefits of this type of business is we’re not just restricted to this area. We have clients across the United States.”
In addition to employment, the housing market remains strong, according to the report.
“This is what should happen post-recovery of a recession,” Duy said. “It’s something consistent with steady increases in economic growth. What’s dramatic is that job growth continues to grow.”
Damon Runberg, Central Oregon economist for the state Employment Department, said he was surprised at how sustained the job growth in Central Oregon was. For years companies have complained that there weren’t enough workers to fill job vacancies.
“Those labor supply constraints seem to have been overblown,” Runberg said. “What has allowed us to continue posting strong rates of job growth is the growth in our labor force due to in-migration to the region.
“A significant portion of the new migrants moving to Central Oregon are becoming important contributors to the local labor supply.”
Roger Lee, Economic Development for Central Oregon CEO, was expecting a softening of the growth rate in the business index but was also surprised and looking forward to the growth extending into this year.
“Sustained momentum in job and population growth combined with persistent record-low unemployment despite strong in-migration were unexpected, while we did anticipate continued wage growth and a sharp rise in commercial air service capacity and passengers, much of which will be felt in the first half of 2020 as the data becomes available,” Lee said in an email statement.
In the housing market, the average monthly home sales edged up as well, continuing the “healthy pace of activity since 2015,” Duy said. The average days on market, an indicator of inventory, rose to 120 in the fourth quarter of 2019, compared to 111 days in the third quarter and 115 days in the first quarter of 2019.
Data for home sales during the past year compiled by the Beacon Appraisal Group LLC of Redmond show sales dropped significantly but the median price held steady near $450,000.
“The takeaway is that the regional economy remains fairly strong,” Duy said. “We’re deep into a record-breaking expansion, and I don’t see it turning around any time soon.”
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