T H E M O N T H LY B U S I N E S S S E C T I O N F O R L I N N A N D B E N T O N C O U N T I E S A N D T H E M I D - W I L L A M E T T E VA L L E Y
www.democratherald.com/business • www.gazettetimes.com/business
March 2014
O U T LO O K : J O B G R OW T H
State report includes good news, worrisome trends By MIKE McINALLY Mid-Valley InBusiness
recent report from the Oregon Employment Department suggesting that Benton, Lincoln and Linn counties will combine to add 11,770 jobs between 2012 and 2022 certainly seemed like good news. And it is, said Pat O’Connor, regional economist with the department — especially when you consider that the projected 12 percent growth in jobs in the years between 2012 and 2022 outstrips the 1.4 percent growth in the decade beginning in 2002. But in a recent interview in O’Connor’s Albany office, the economist also pointed to some clouds hanging over that forecast. Here are some takeaways from O’Connor about some of the good news for mid-valley employment – and some trends that may not be quite as sunny. The new employment projections represent trends that have been developing for years. Among those trends: A strong health care sector, due in part to an aging population, recovery from the recession, particularly in the business services and trade sectors, and the continuing retirements of baby boomers. Health care and professional services are booming. The department projections for 2012-2022 call for increases of 2,000 or more jobs in health care fields and the professional and business-services sector. The latter category includes a variety of professional jobs, such as lawyers and engineers, but it also includes workers at temporary help firms. We’re replacing middle-wage jobs mostly with lower-wage jobs. O’Connor said that researchers looking at job trends since 1980 have consistently noted growth in high-wage and low-wage jobs and a decline in middle-wage jobs. In other words, the middle-wage jobs that we’ve lost have tended to be replaced by lower-wage jobs. “It looks like a lot of the jobs being added are lowwage, low-skills jobs,” he said. These employment projections aren’t always right. The department’s projections for the 2002-2012 decade often were off the mark, in large part because economists didn’t foresee the economic recession. To list one example: Economists projected that the manufacturing sector in the mid-valley would be essentially flat. Over the decade, though, manufacturing actually shed some 5,000 jobs in the region, a big economic blow. Overall, the 2002 projection called for 10 percent growth. The final result: 1.4 percent growth.
B U S I N E S S TO WATC H
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AMANDA COWAN | MID-VALLEY INBUSINESS
Workers lend a hand to the construction of the new Oregon State University residence hall March 5. A new report from the Oregon Employment Department calls for job growth in construction over a 10-year period beginning in 2012. But economists say employment levels in some economic sectors might never return to prerecession levels. just too many years of too few jobs being created,” O’Connor said, and one result is that younger workers haven’t been able to get entry-level jobs – because those jobs have been snapped up by older workers who needed jobs. “At some point, that really starts to catch up with us.” We’ve been here before. O’Connor points to the last big economic downtown triggered by financial issues: The Great Depression. “There’s nothing saying you can’t have a period of underperforming job growth out of a recession,” he said, noting that it took the outbreak of World War II to really fire up the economy in the wake of the Depression. Economists tend to be pessimists. O’Connor is no exception — but he admits that he could be wrong about some of the more worrisome trends he’s tracking. “I’d be happy,” he said, “to take the heat for that.”
But sometimes these projections are right on the money. The department’s 2002 projections for job growth in some sectors — health care, for example — were pretty much on target. Hard-hit economic sectors are rebounding. The new report from the department foresees job growth in some sectors that took big blows in the recession – construction, manufacturing and wood products, for example. But we never may make up all our lost ground. O’Connor said the job growth in those areas isn’t likely to be enough to return those sectors to prerecession levels. And continuing automation in some sectors (wood products is a good example) continues to hamper job growth. Younger workers still are in a bind. “A lot of it is
T H E L I ST
Rickard Engineering & Design ADDRESS: 530 S.W. Queen Ave., Albany PHONE NUMBER: 541-928-3778 WEBSITE: rickarddesign.com KEY LEADERS: Steve Folin, owner EMPLOYEES: Five WHAT IT DOES: The company specializes in computer-controlled water-jet cutting. Special equipment can cut almost any material into any shape desired by the customer.The company also offers designing services for clients who need it. WHY IT’S WORTH WATCHING: Rickard Engineering & Design (RED) serves customers across the country with its specialized water-jet cutting process. The company has enjoyed steady growth since it opened in 2009 and moved into a new 7,000-square-foot site just over a year ago. Owner Steve Folin has added new equipment which takes computer-generated designs, mostly created by customers but sometimes by Folin and the RED design staff, and cuts them into specified shapes. The process includes 3D designs for prototypes that features colors, textures and multipart assemblies. Folin says the company has the tools and expertise to produce top-line results. The newest equipment is an OMAX 60120 5-axis water-jet machine, acquired in 2013. It allows RED to offer a variety of options to its cutting capabilities. Folin says it can cut virtually any material from stainless steel to titanium to rubber and even foam up to six inches thick. Folin handles research and development for the company himself, looking at creating new tools for projects. Most cus-
Here are projections from the Oregon Employment Department on the fastestgrowing occupations in Benton, Linn and Lincoln counties (with more than 50 employed) from 2012 to 2022. 1. Interpreters and translators 2. Cartographers and photogrammetrists 3. Cement masons and concrete finishers 4. Computer-controlled machine tool operators, metal and plastic 5. Home health aides 6. Painters, construction and maintenance workers 7. Chemical technicians 8. Demonstrators and product promoters 9. Industrial machinery mechanics 10. Hairdressers, hairstylists and cosmetologists Source: Oregon Employment Department
DAVID PATTON | MID-VALLEY INBUSINESS
Steve Folin uses a water-jet cutter at Rickard Engineering and Design. tomers are from the Northwest but his online presence through the RED website is bringing in clients from all over the United States. Folin says RED’s goal is to stay on the cutting edge of water-jet technology. — Steve Lathrop, Mid-Valley InBusiness
B US I N ESS STAT O F T H E M O N T H Metropolitan income Per capita income by metropolitian statistical Area
$30,984
Salem
$29,882
$34,711
EugeneSpringfield
$33,801
$35,941
Bend
$34,614
$38,448
Corvallis
$37,263
Source: Bureau of Economic Analysis
2011 2012
$39,880
PortlandVanc.-Hillsboro
$38,439
$43,103
Oregon
$41,313
$39,166
United States
$37,744
$43,735
— Mid-Valley InBusiness
$55,000 $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000
$42,298
Here’s how per-capita income changed from 2011 to 2012 in a selection of Oregon’s so-called metropolitan areas — in other words, areas with more than 50,000 people. The list of Oregon metropolitan areas now includes two areas that recently cracked the 50,000 threshold, Albany and Grants Pass. Those also are the two metropolitan areas in Oregon with the lowest per-capita income. (Grants Pass is not included on the chart for space reasons, but its 2012 percapita income was $31,361.) Even though Corvallis’ per-capita income is higher than Albany’s, percapita income growth in both areas between 2011 and 2012 was the same — 3.7 percent.
Albany