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
December 2013
Steady outlook for 2014 We asked experts about the prospects for nine different economic sectors in the new year. The consensus: Slow growth in some areas and cautious optimism in others. Here’s the outlook:
Agriculture The good news: After three years of stagnation, grass seed inventory has been cleared out and prices have returned to a more profitable level. As a result, the number of acres in the mid-valley planted with wheat has declined as farmers increase the acres devoted to grass seed. Prices are expected to hold through 2014. Mid-valley filbert prices also look good. The bad news: Increasing regulations on water quality will affect irrigation and possibly create runoff issues for farmers. Congress continues to haggle over a long-term farm bill. The uncertainties: Declines in commodity prices in the Midwest — corn is down from almost $8 to about $4 — affect ag nationwide. Lower feed costs may be a plus for feedlot producers and dairymen. The declines may also drive down fertilizer prices, but it’s not clear by how much or for how long. Fuel prices were starting to come down before the recent cold snap, but have since begun to rebound. It’s unknown how those cold snaps will affect nut producing and fruit trees in the mid-valley, especially in the southern part of the county, where temperatures in some cases dropped to minus 10 degrees.
Construction and real estate
Dining, tourism and alcohol
The good news: The real estate market is tight. Home purchases have been slow but strong. Supply is limited and buyers are looking for builders to build homes. Linn and Benton counties are poised for new home construction with Linn County land prices being lower. Small to medium builders will become busier in 2014, increasing the number of construction jobs. Building permits on single family homes in Albany have nearly doubled from 2011 numbers. The bad news: Construction is a volatile sector. Recession and unemployment hits this area hardest. The mid-valley saw huge drops in construction levels this last year. In real estate, rates are rising and home prices are going to increase. Federal government policies already have helped to push up lending rates, and that trend will continue. By June, interest rates might be back up to 5.5 percent. The uncertainties: There’s still considerable uncertainty about the strength of the economic recovery — and considerable worries about federal government action (or inaction) throwing a wrench into the works.
The good news: In tourism, a new riverfront hotel is being planned for Corvallis, although it won’t open until 2016. Albany transit tax numbers have returned to 2007-08 levels, said Jimmie Lucht, executive director of the Albany Visitors Association. On the brewing and distillery front, the 2 Towns cider operation is planning an expansion into Corvallis. Nick Lorenz at Nectar Creek Honeywine on Highway 34 said the wide range of beer, cider and mead keeps the mid-valley from saturation. Laura Bryngelson at Calapooia Brewing in Albany notes that growler shops — such as 5th Street Growlers and Beer:30 in Corvallis and Lakeshore Lanes in Albany — are helping ease the problem of limited shelf space in stores. In dining, the addition of Buffalo Wild Wings and the restaurant portion of Sky High Brewing have given Corvallis a boost, notes Kevin Dwyer of the Corvallis Chamber of Commerce. In Albany, Sybaris, Frankie’s and Novak’s are doing well, noted Lucht, who also noted that lower gas prices could encourage more tourism. The bad news: There will be no da Vinci Days in Corvallis in 2014 as the eclectic festival looks to reinvent itself. The uncertainties: The Corvallis Fall Festival was cut short by weather in September, but organizers have vowed to come back strong in 2014. Corvallis Corvallis Economic Development Manager Tom Nelson said “as the economy improves there will be more disposable income and we expect to see more dining out.” But how much the economy will improve is unclear.
— Maria L. Kirkpatrick
— Alex Paul
Finance
Government and education
The good news: Consumer confidence, a leading economic indicator, is fragile, but has seen slight improvement. Despite the slow economic recovery, many financial institutions experienced growth in the past year and are expecting that to continue.“It’s another year to stay the course and seek steady, solid growth,” said Mike Corwin, vice president of public relations and business development at OSU Federal Credit Union. At Washington Federal, commercial lending is expanding after a record year of annual earnings for that institution, said Senior Vice President Gary Haines. The bad news: The collapse of the housing market put financial activities in a very deep hole. Slow growth in housing means slow growth in finance, where mortgages originate. With people saving more and spending less, growth in the finance sector, which handles credit cards, revolving lines of credit and consumer loans, will be slower than the overall economy and the private sector. Growth in employment in finance is the slowest among Oregon’s private sectors. The uncertainties: The latest economic forecast could be overly pessimistic. If more people find work, consumer confidence could get a boost. Also, look for additional mergers of regional and community institutions looking to grow by consolidating regulatory costs.
The good news: Employment in mid-valley K-12 schools should hold steady this year; most of the school districts in Linn and Benton counties appear to have employment levels similar to what they had during the previous school year.Employment at Oregon State University has increased by some 70 jobs since last school year,as OSU deals with increased enrollment.Employment at other governmental entities appears to be relatively stable. The bad news: Employment is down at Linn-Benton Community College, which affects Linn County’s jobs numbers. The uncertainties: Some local governments might be forced to continue efforts to downsize; the city of Corvallis, for example, continues to ponder the possibility of privatizing some services that have been provided by the city. And while the enrollment growth at OSU has been a big driver of the mid-valley economy (the university added about 1,500 jobs between 2008 and 2012), the rate of increased hiring has slowed. And while OSU officials expect enrollment growth to continue for the next few years, they also expect the rate of growth to cool.
— Rebecca Barrett
Manufacturing and high tech The good news: Local observers expect a solid year for manufacturing and high tech. Orders for factory automation equipment are on the rise across a variety of industries, mid-valley metals and aerospace companies have strong prospects and wood products manufacturers are beginning to see growing demand from a recovering construction sector. The bad news: Some companies might not be able to grow as fast as they’d like due to a shortage of trained workers for certain kinds of positions. Employers are working with economic development organizations to develop training programs for the most needed skill sets. The uncertainties: If anything can derail what looks like a very promising 2014, observers say, it’s the federal government. Will the bipartisan lovefest that followed passage of the Ryan-Murray budget bill last, or will Congress descend once more into the familiar gridlock that brought us the sequester? And how will Obamacare’s looming employer mandates impact business? Will some companies slow their growth to avoid expansion? Or curtail orders to offset rising health care costs? Time will tell. — Bennett Hall
— Mike McInally
Retail The good news: The mid-valley typically has a measure of insulation from outside economic forces. Retail numbers are flirting with growth across the valley with a bit more stability in Benton County. People believe in spending local and continue to support local retail. The retail economy is stable and getting incrementally better. Additional students at Oregon State University translate into more dollars going into stores. Linn County retailers report they see a turn for the better. More people are getting out and spending a little bit more each year. Retailers in both Linn and Benton counties have plans to expand. The bad news: When the economy dropped, it dropped fast. Sales growth is slow, and it will take time for the numbers to come back up. Employment is flat across the industry. Consumers who were burned by the economic recession still are being cautious about spending money. The uncertainties: The bickering at a national level creates insecurity on a personal level. Too many questions regarding health care and taxes have business owners and consumers waiting to see what happens. Without answers, people won’t make investments. — Maria L. Kirkpatrick
— James Day
Health care The good news: Under the federal Affordable Care Act, there should be an influx of newly insured patients. Samaritan Health Services, the area’s largest health care provider, partnered with Western University to create a new medical school to train doctors to meet the increasing demand for health care services. Cost-cutting measures during the recession allowed the health system to discover new ways to deliver care more efficiently, said Samaritan CEO Larry Mullins. The Corvallis Clinic is adding a new cancer care center, expanding services at its Albany office and continuing facility improvements at the main Corvallis office. “We are recruiting providers and staff in order to strengthen care coordination in areas of prevention and disease management,” said Judy Corwin, the clinic’s director of public relations. Oregon’s employment in health care is expected to grow by 2.4 percent in 2014, and growth for Linn and Benton counties is expected in both the short-term and long run. The bad news: The botched rollout of Cover Oregon, the state’s beleaguered online insurance exchange, could delay the arrival of those anticipated new patients, and some people might decide not to sign up at all. The uncertainties: The question remains: How many new jobs will actually be created through health care reform? — Rebecca Barrett
Timber The good news: 2013 was a better year for the timber industry. Prices moved into solid territory as housing starts picked up a bit. West Coast lumber exports jumped by 21 percent from the second quarter of 2013 to the third quarter. Lumber exports grew by 50 percent both in value and volume compared to the third quarter of 2012, while log exports increased by nearly 40 percent in value and about 25 percent in volume. The bad news: Although families want to buy homes, restrictions placed on lending institutions after the financial collapse make it difficult for them to do so. Loan closings are taking longer. The uncertainties: Unemployment numbers keep moving up and down. New government stream temperature rules, designed to help control the temperatures of waterways to protect fish, might cause problems for landowners as state regulators consider crafting new rules to meet federal requirements. — Alex Paul
A6 Average 30-year mortgage rises to 4.48 percent WASHINGTON (AP) — Average U.S. rates for fixed mortgages crept higher this week but remained low by historical standards. Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan increased to 4.48 percent from 4.47 percent last week. The average on the 15-year fixed loan rose to 3.52 percent from 3.51 percent. Mortgage rates peaked at 4.6 percent in August on expectations that the Federal Reserve would reduce its $85 billion-a-month in bond purchases. Those purchases push mortgage and other long-term rates lower and encourage borrowing and spending. On Dec. 18, the Fed finally decided the economy was strong enough to allow it to reduce the monthly purchases by $10 billion. Mortgage rates are sharply higher than they were a year ago when the 30-year fixed rate was 3.35 percent and the 15-year was 2.65 percent. The Commerce Department reported Tuesday that new-home sales dipped 2.1 percent in November to a seasonally adjusted 464,000. But stronger figures for the previous three months suggested that housing may be regaining strength after a summer lull. The National Association of Realtors said last week that the number of people who bought existing homes in November fell for a third straight month. Higher rates and the lingering effects of the partial government shutdown in October may have deterred some sales. Still, the government said builders broke ground on homes at a seasonally adjusted annual rate of 1.09 million homes and apartments in November. That was the fastest pace since February 2008 and was 23 percent higher than in October.
MID-VALLEY InBusiness
MOVERS&SHAKERS People on the Move Keller Williams Realty MidWillamette recently announced the addition of Jay Thornhill to its team. Originally from Springfield, Thornhill has lived in the Willamette Valley his whole life, except for six and a half years when he was in the U.S. Navy. He was in the construction and remodeling Thornhill trade prior to Real estate becoming a real estate broker. He earned his Oregon real estate license in 2008, and is serving all the Willamette Valley, specializing in first-time homebuyers. He can be reached at 541-337-2834 or brokerjay2008@gmail.com. ■ Jodi Sorenson of Corvallis is the newest primary care provider at The Corvallis Clinic. She is a nurse practitioner in the Internal Medicine Department, Asbury Building, 3680 N.W. Samaritan Drive. Sorenson received her master’s degree in nursing from Gonzaga University in 2012 and Sorenson Primary care completed a nurse practitioner fellowship at Boise VA Medical Center last June. She is a certified family nurse practitioner. Prior to coming to the Clinic, she was a critical care nurse at Good Samaritan Regional Medical Center in Corvallis for 14 years. Sorenson, who originally is from Minnesota, received an associate’s degree in nursing from Linn-Benton Community College in 1998 and a bachelor’s in psychology in 1989 from Bemidji State University in Bemidji, Minn.
Oregon Bancorp, Inc., is the parent company of Willamette Valley Bank, a community bank headquartered in Salem. The bank operates full-service Oregon branches in Salem, Keizer, Silverton and Albany.
Reinvestments At its December program meeting, the board of trustees of the Meyer Memorial Trust awarded nearly $4.2 million in grants to 22 nonprofit organizations in Oregon and southwest Washington. The Oregon State University Foundation was awarded $300,000 for a pilot program delivered through cultural centers to improve minority student success at OSU. Meyer Memorial Trust is one of the largest private foundations in Oregon, with assets of approximately $770 million.
Training & Development
Kimberly Zahr, vice president and area retail leader for KeyBank, has graduated from Pacific Coast Banking School. She is based in Salem and has leadership responsibilities for 12 branches in the Mid-Willamette Valley, including a Corvallis branch. Graduates attended courses covering risk management, financial performance and leadership to gain an executive-level understanding of the business of banking. Fourteen of the 204 graduZahr Banking ates were from KeyBank. For 75 years, the Pacific Coast Banking School has partnered with the University of Washington Graduate School of Business to provide this three-year graduatelevel program to more than 10,000 members of the financial Profit & Loss services community. Graduates attended a two-week resident Oregon Bancorp, Inc., parent session each August at the Unicompany of Willamette Valley Bank, announced Dec. 20 that its versity of Washington, and completed seven inter-session writboard of directors had approved its first quarterly cash dividend of ten assignments, including an original management thesis. 10 cents per common share. KeyBank operates 84 branches The dividend is payable Jan. 15 in Portland and Southwest Washto shareholders of record as of ington. Dec. 31.
December 2013
DAT E B O O K Today: Lebanon Toastmasters Meeting, 7:45 a.m., Laticrete, 100 Entek Way. Membership fees apply. Info: Shelly Garrett, 541258-7164. Jan. 6: Lebanon Toastmasters Meeting, 7:45 a.m., Laticrete, 100 Entek Way. Membership fees apply. Info: Shelly Garrett, 541-258-7164. Jan. 6: Real estate property manager course, 6 to 8 p.m. seven Mondays, starting Jan. 6, LinnBenton Community College, 6500 Pacific Blvd. S.W., Albany. Combines online and in-class instruction to meet the 60-hour requirement for the Oregon Property Manager Pre-License course. Cost: $550. Registration: 541917-4927 or barbie.dubois@ linnbenton.edu. Jan. 7: “Success Skills for Training Others on the Job,” 8 a.m. to noon, Fireside Room, room CC-211, Calapooia Center, Linn-Benton Community College, 6500 Pacific Blvd. S.W., Albany. Learn how to train employees by understanding different learning styles, exploring the five-step model for learning something new, developing effective training plans and giving feedback. Cost: $79 per person, or $69 each for
three or more from one company. Registration: LBCC Business and Employer Services, 541-917-4923. Jan. 7: Free information session for those interested in becoming polysomnographic technologists, 2 to 4 p.m., Calapooia Center, Linn-Benton Community College, 6500 Pacific Blvd. S.W., Albany.Attendance at this session or one of two others to be held in January is mandatory before applying for the program. Information: LBCC Healthcare, E-Learning and Media, 541-917-4923. Jan. 8: Albany Area Chamber of Commerce Young Professionals Luncheon, 11:30 a.m. to 1 p.m., Phoenix Inn Suites, 3410 Spicer Drive S.E., Albany. Speaker: Will Keim, author. Cost: $15 members; $20 non-members. Info: 541-926-1517. Jan. 13: Lebanon Toastmasters Meeting, 7:45 a.m., Laticrete, 100 Entek Way. Membership fees apply. Info: Shelly Garrett, 541-258-7164. Jan 14: Lebanon Area Chamber of Commerce Women in Business, 11:30 a.m. to 1 p.m., The River Center, 3000 S. Santiam Highway, Lebanon. Speaker: Marianne Vydra, Senior Woman Administrator/Senior Assoc. AD. Cost: $14.50. Info: 541-258-7164.
Jan. 16: Lebanon Area Chamber of Commerce Business After Hours, 5 to 7 p.m., Key Bank, 96 E. Sherman St., Lebanon. Free. Info: 541-258-7164. Jan. 20: Lebanon Toastmasters Meeting, 7:45 a.m., Laticrete, 100 Entek Way. Membership fees apply. Info: Shelly Garrett, 541-258-7164. Jan. 21: Expanding Your Leadership Edge: “It’s About Who You Are,” 8:08 a.m.,Albany Area Chamber of Commerce Office, 435 First Ave.W.,Albany. Facilitator: Joseph Bailey, certified professional facilitator, LBCC. Cost: $10 per person. Info: 541-926-1517. Jan. 21: Albany Area Chamber of Commerce Business After Hours, 5:15 to 7 p.m., Boshart Trucking 32788 Tangent Loop, Tangent. Cost: $7 members; $8 members at the door; $10 nonmembers. Info: 541-926-1517. Jan. 29: Albany Area Chamber of Commerce Forum Luncheon: “Education Is Your Partner in Economic Development,” 11:30 a.m. to 1 p.m., Linn County Fair & Expo Center, 3700 Knox Butte Rd., Albany. Speaker: Greg Hamann, president Linn-Benton Community College. Cost: $13 members; $20 non-members. Info: 541-926-1517.