Editor’s note: The Bulletin has partnered with the University of Oregon’s College of Arts and Sciences and Department of Economics to produce the Central Oregon Business Index. The index provides a regular snapshot of the region’s economy using economic models consistent with national standards. The index, exclusive to The Bulletin, appears quarterly in the Sunday Business section.

The trajectory of Central Oregon’s economy turned downward in the first quarter, marking the first significant decline in nearly eight years, according to an index compiled by the University of Oregon.

The Central Oregon Business Index was at 143.2, down 2.5 points, or 1.7%, from the fourth quarter 2018.

The last time the index posted a decline of more than a fraction of a point was from the first quarter to second quarter in 2011.

Gains the index made in the last three quarters of 2018 were by less than 1 point.

“It had been in the process of slowing down. Now it’s rolled over, at least for a quarter,” said Tim Duy, author of the index and professor of practice in economics at the University of Oregon. Economic Development for Central Oregon

CEO Roger Lee said he’s not surprised to see the index take a dip. Leads on relocating and expanding business have been declining for 18 months.

“We’ve been predicting a slowdown in the latter half of this year,” he said.

While the change in direction is noteworthy, Duy said, he doesn’t think the descent will continue. “I would expect the COBI to flatline going forward,” he said.

The index comprises nine variables, which are adjusted for seasonality, and is measured against a benchmark of 100 set in 1998.

A spike in initial unemployment claims was a big factor in the first-quarter reading, Duy said. Initial claims — made when people lose their jobs — jumped from a monthly average of about 1,500 in the fourth quarter to about 2,100, a 40% increase.

Damon Runberg, Central Oregon economist for the state Employment Department, thinks the spike might reflect construction workers who were laid off after the record snowfall that hit in late February.

The state’s unemployment assistance centers are seeing more job seekers this year, said Heather Ficht, executive director of East Cascades Works. “That has not happened in a while,” she said. “It’s been ... crickets in the WorkSource centers.”

Different readings of the labor market show a slowdown, rather than decline, Runberg said. Employers are still adding jobs but at a much slower pace over the past 12 months, he said. The unemployment rate has risen slightly as it takes recent graduates and newcomers longer to find work.

Other variables in the index softened in the first quarter. The average number of homes sold per month fell 4.2%, from 448 to 429. In previous quarters, average monthly sales ranged from 450 to 500 previously owned and newly built single-family homes, including condominiums and mobile homes, Duy said.

Another sign of slowing: The amount of landfill waste fell 8% to 13,393 tons.

Other economic indicators remained strong. Activity at Redmond Airport rose 1.47% to 76,662 passengers boarding and exiting planes. Bend lodging tax revenue, adjusted for inflation, rose 4.47% to $3.1 million — a new high.

“That’s the ecosystem that’s driven by still-solid economic activity for the U.S. as a whole,” Duy said.

— Reporter: 541-617-7860, kmclaughlin@bendbulletin.com