The recession is in the rear view mirror
By Bend Chamber Communications Coordinator Rachael Rees van den Berg
The recession is in the rear view mirror, panelists told an audience of more than 300 at the Bend Chamber’s annual Economic Forecast Breakfast.
“The news delivered by our panelists was not as grim as one might have thought,” said Bend Chamber EVP of Programs and Events Robin Rogers. “The overarching forecast was, 2017 will actually be better than 2016 and, 2018 should also be a growth year.”
During the sold-out event, sponsored by Bend Chamber Platinum Partner and Lead Investor, PacificSource Health Plans, economic experts started with a 40,000-foot view of the economic climate around the globe and country, and drilled down to the state and local levels. Topics ranged from GDP, the nature of the business cycle and regional economic indicators, to the upcoming presidential election and Measure 97, the largest proposed tax increase in Oregon’s history.
“Collectively, the three panelists brought a plethora of knowledge, expertise and even humor, which is always refreshing to hear when you’re talking economics,” Rogers said.
Panelist Mark Kralj, principal at Ferguson Wellman Capital Management, said in terms of GDP, things are “muddling along.”
“Economies are growing, but they’re not gaining momentum or losing momentum, whether it’s Japan, the U.K. or the U.S.,” Kralj said. “We see that as the most stable economy in the world, right now of the major, developed countries…We aren’t getting a lot of growth, we aren’t losing ground.”
While the growth globally is slow, on the state and local level, he said wage and job growth is accelerating.
“It’s pretty amazing the types of numbers we are seeing here in Deschutes County,” Kralj said. “It’s a very powerful force that looks like it’s going to continue for a while.”
Oregon typically outpaces the U.S. as a whole during an expansion, said panelist Tim Duy, senior director of the Oregon Economic Forum and the author of the University of Oregon Statewide Economic Indicators, Regional Economic Indicators and the Central Oregon Business Index.
“In the beginning of the year, there was a great deal of concern that the U.S. was poised for an imminent recession; this simply never came about,” Duy said. “The recession chatter at the beginning of the year was clearly in excess.”
Kralj agreed. He said a recovery doesn’t die of old age and can continue for some time.
Australia hasn’t had a recession in 25 years, Duy said.
“There’s no rule or law that says we have to have a recession,” Duy said. “Usually, it’s going to end up being some kind of policy mistake or external shock.”
When it comes to the domestic economy, Kralj said the U.S. household net worth is at an all-time high of $88 trillion. The personal savings rate is also the highest since 1982 at 5.7 percent.
In terms of the local economy, a number of economic indicators point to a bright immediate future for Central Oregon, said Roger Lee, executive director for Economic Development for Central Oregon (EDCO).
For example, he said manufacturing has soared in terms of employment growth in the Bend-Redmond MSA. Lee said another indicator EDCO uses for measuring growth is school enrollment.
“On average, at least one new school has been built in Central Oregon every year for the past 20 years,” he said.
Lee touted Bend for its recent accreditation as the eighth best-performing small metro in the U.S., according to the Milken Institute’s 2015 list of Bend Performing Small Cities. He also announced Bend topped the list of the Forbes 2016 Best Small Place for Business and Careers, which was published Oct. 19. According to Forbes, “the Bend metro has come roaring back with the top job growth rate in the country last year at 6.6 percent.”
But Lee said Measure 97, which he called passing bad policy through the ballot initiative process, has the potential to change the economy in Oregon and Central Oregon.
“The economic reality, the real concern for us, is what it does to the job picture in Oregon,” he said. “It could erase a couple decades worth of jobs.”
Pass or fail, Lee said the conversation surrounding Measure 97 has elevated the need to talk about the state’s tax structure and how it is so dependent upon personal income taxes.
“It certainly unified the business community in a greater way to get engaged in the conversation,” Lee said.
Bend Chamber President Katy Brooks said it’s a great time for growth and encouraged the audience to “make hay while the sun shines.”
She referenced the local organizations working on diversifying the business base, creating resources and opportunities for both emerging and traditional industries such as internships, networking, access to capital and national markets, as well as making sure there’s infrastructure that’s in place that can help businesses thrive and keep people coming.
“We all know the economy fluctuates with time,” she said. “The one observation I can share with you, from my two weeks on the job…is that the Central Oregon community and Bend, in particular, really has their act together.”