The message Friday from economist Bill Watkins to Central Oregon’s business community was simple and reserved: Expect continued improvement in the local economy but don’t expect fireworks.
Like the image of a turtle he flashed on-screen as part of his PowerPoint presentation, economic growth in the coming year will be slow but steady, said Watkins, executive director of the Center for Economic Research and Forecasting at California Lutheran University.
That was the cautious part of his hour-long talk.
“Central Oregon is doing better than Oregon (at large), and it’s going to do better than Oregon,” he told his audience at the sixth annual Central Oregon Economic Forecast and Business Conference at The Riverhouse Convention Center, Bend. “It’s going to do better than almost everything.”
However, Watkins described wrinkles in the picture. Deschutes County continues to regain jobs lost during the recession but at a less-than-bristling pace. The county gained 1,920 jobs in the year ending in November, but remains 6,740 jobs down from its prerecession high, according to Watkins. At that rate, 10 years will pass before the county is back at prerecession employment levels.
In Jefferson and Crook counties, Watkins predicts “barely perceptible growth.”
Meanwhile, the Deschutes County labor force is shrinking. Watkins’ data shows a loss in October of about 5 percent of workers from October 2012.
“You’ve got this case where you have people leaving, abandoning the workforce,” he said. “And yet we’re creating jobs in the long term, apparently not creating jobs for people that are here. Something’s causing people to shuffle themselves around.”
Watkins showed data indicating non-farm job growth in Deschutes County as high as 10.3 percent in the first quarter of 2013, over the previous quarter. He forecast more modest growth in the county, between 3.1 percent and 4.8 percent each quarter through 2015.
The housing market is contributing to economic growth in Deschutes County, he said. Once again, the local picture reflects the overall recovery, but with a Bend twist.
Generally, as real estate becomes less attractive to investors, they will make way for other buyers, typically young families starting new households. But as young people burdened with college debt and unable to find work pass on buying a new home, demand for real estate will lessen, he said. Without demand, prices should not rise appreciably.
“For most places, that’s what we expect to see,” he said.
Bend is different, Watkins said. It belongs to a class of small cities like Jackson Hole, Wyo., and Santa Fe, N.M., that “can do well just by being great places to be.”
Bend attracts wealthy people generally untouched by the recession and retirees with the financial resources that enable them to go where they want, he said. Wherever their numbers dominate the economy, they create consumption regions, rather than production regions.
While Bend has a manufacturing sector, it’s mostly a place for consumption. “A successful new Pilates studio on Wall Street is more likely than a new battery manufacturer,” he stated in a report accompanying his presentation.
— Reporter: 541-617-7815, firstname.lastname@example.org