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Deschutes only Oregon region to show drop in personal income

Economist attributes decline to housing market collapse

By Hillary Borrud / The Bulletin

Published: August 07. 2009 4:00AM PST

Deschutes County’s per capita personal income fell 0.2 percent from 2007 to 2008, according to an annual report by the U.S. Bureau of Economic Analysis released Thursday. Nationally, average per capita income grew 2.2 percent for the 366 metropolitan statistical areas.

Deschutes County was the only Oregon MSA in the report that recorded a decline in per capita personal income in 2008, although other Oregon MSAs saw their growth rates slow from 2007.

Deschutes County’s 2008 per capita personal income was $34,988, compared with a national per capita personal income of $41,455, placing it roughly in the middle of the nation’s MSAs, at No. 162, according to the report.

Bridgeport, Conn., topped the list with a 2008 per capita personal income of $82,266, while McAllen, Texas, ranked last with a per capita personal income of $19,377.

Timothy Duy, a University of Oregon economist who tracks Central Oregon’s economy, attributed Deschutes County’s decline in personal income to the housing market’s collapse.

“I find it completely unsurprising, given that the Bend region had such a disproportionate amount of economic activity in what was revealed to be a housing bubble,” said Duy, director of the Oregon Economic Forum at the university.

Data from the Bureau of Economic Analysis suggests the decline in personal income growth resulted from lost salaries and wages, Duy said.

“It looks like it’s largely concentrated where you’d expect,” Duy said of the areas where personal income fell.

The Bureau of Economic Analysis calculates personal income as income people receive from all sources, including net earnings by place of residence, rental income, dividend income and interest income. Per capita income is calculated by dividing an area’s total personal income by the population.

Without taking population into account, total personal income in the county grew by 2.8 percent in 2008 over 2007, to $5.5 billion, less than half the 6 percent growth rate it registered in 2007 over 2006.

That is similar to the national average of 3.3 percent personal income growth, according to a news release from the bureau.

“Personal income grew (in Deschutes County), but the population grew as well,” Duy noted. “I think it’s a disproportionate hit to that region because it was disproportionately based on the housing market.”

Eric Strobel, the Bend manager at Economic Development for Central Oregon, said residents’ incomes from real estate investments, such as rental homes and commercial leases, have taken a hit due to the recession. Deschutes County also has a large number of retirees who get their income from dividends on investments, so the decline in the stock market cut into their earnings, Strobel said.

“I think investments in general, related to income, whether that’s real estate or a business or the stock market, those have all taken a hit,” Strobel said.

Hillary Borrud can be reached at 541-617-7829 or at hborrud@bendbulletin.com.

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