Kathleen McLaughlin
The Bulletin

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.

The Central Oregon Business Index rebounded in the second quarter after taking a significant dip in the first quarter of 2019.

The index rose 2.9 percentage points to 146.3, according to the University of Oregon. The first quarter’s decline had been the first of any size since 2011.

The bounce back is notable, said Tim Duy, author of the index and professor of practice in economics at the University of Oregon. “That was a random slowdown in the data,” he said. “It wasn’t sustained.”

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

The second quarter reading was up 2% from the first quarter, 143.4.

Central Oregon is following national trends in job growth, home sales and tourism activity, Duy said.

“Looking forward, there’s a lot of questions about the national economy right now,” Duy said. “A lot of those questions really revolve around the uncertainty of policies coming out of Washington. Particularly trade policy. The concern is there’s going to be a slowdown in business activity and business investment.”

Job growth continued to decelerate in the second quarter. The index showed payroll numbers were even with first quarter and up 2.3% from the second quarter of 2018. That’s a much slower pace of job growth, which peaked at more than 7% in 2015.

The housing market also bounced back, reflecting the national trend since mortgage interest rates have fallen, Duy said. Average monthly home sales in Deschutes County rose from 438 in the first quarter to 461.

Residential construction activity increased, but it’s still less than in 2018, when builders pulled an average of at least 150 permits per month. The second quarter monthly average was 144.

The city of Bend first noted a decrease in permit applications for new single-family homes in January 2018, according to the Community Development Department. That decrease was tied to a diminishing number of platted lots.

Home remodels decreased at a slower rate in 2018, but applications for all residential work have leveled off since February.

“The Community Development Department expects this level activity to carry forward over the next six to 10 months,” city spokeswoman Anne Aurand said in an email.

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