Transcript Revenue Forecast

Pacific Northwest Regional Economic Conference...since 1967
Oregon’s Economic
Outlook
Hotel Murano
Tacoma, Washington
May 15, 2008
Tom Potiowsky
Office of Economic Analysis
Look at Oregon Economy...
Office of Economic Analysis
Recent Oregon Economy Facts …
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5.7% unemployment rate for March 2008 – 10th
highest for the states. New release: March 2008 at
5.6% unemployment rate with April 2008 at 5.5%.
26th fastest job growth at 0.6% for all states for
March 2008 over March 2007.
5.7% unemployment rate for March 2008 is up from
the latest lowest rate of 5.0% in April 2007.
Total nonfarm employment grew 0.9% year-overyear for the 1st quarter of 2008 (preliminary data).
Job losses (S.A.) for both April and March 2008.
5.8% personal income growth for 4th quarter of 2007
over 4th quarter of 2006. Annualized 4th quarter
2007 growth at 5.0%.
Last Two Recessions, Oregon faired better
in 1990-91 and much worse during 2001
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1990-91
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National duration 8
months, about the same
for Oregon
‘V’ shaped recession
1.6% decline in Oregon
jobs; 1.5% decline for US
Oregon ranked 24th worst
Inflation at 6.0%
Oregon unemployment
rate peak 7.5% (about
same as US), 22 months
over 7%
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2001
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National duration 8
months, about 31 months
for Oregon
‘W’ shaped recession
4.0% decline in Oregon
jobs; 2.0% decline for US
Oregon ranked 12th worst
Inflation at 3.4%
Oregon unemployment
rate peak 8.5% (higher
than US), 37 months
over 7%
Oregon’s Position in the Latest Downturn
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Nationwide, foreclosure-related filings (e.g., default notices, auction
sale notices, etc.) increased 75% nationwide from 2006 to 2007.
Oregon had a 12% increase over the same period, 43rd slowest rate
in the U.S.
Oregon’s foreclosure rate at 0.533%, half the national average and
well below 1.5% plus rate of NV, FL, CA, AZ, OH, MI.
Oregon still has positive single family house price appreciation as of
4th quarter 2007 (overall, but Medford and Bend are slightly
negative, Portland most likely dipping into negative territory—
S&P/Case-Shiller price index has Portland slightly negative).
Housing correction has less to adjust compared to other high
population growth areas. But, residential building permits down
-49.4% total and -51.0% single for March 08 year-to-date.
(Deschutes: -68.4% total and -66.5% single)
Unemployment initial benefit claims up by 3,000, trend pointing to
slower economic growth.
40
5000
4000
-20
Year-over-year
percent change
(right scale)
1000
500
30
Total Exports
(left scale)
20
3500
3000
2500
2000
0
-10
1500
-30
0
(% change)
10
($ million)
Oregon's Total Exports
(1Q 1997 - 4Q 2007, current dollars)
4500
Q3 2007
Q2 2007
Q1 2007
Q4 2006
Q3 2006
Q2 2006
Q1 2006
Q4 2005
Q3 2005
Q2 2005
Q1 2005
Q4 2004
Q3 2004
Q2 2004
Q1 2004
Q4 2003
Q3 2003
Q2 2003
Q1 2003
Q4 2002
Q3 2002
Q2 2002
Q1 2002
Q4 2001
Q3 2001
Q2 2001
Q1 2001
Q4 2000
Q3 2000
Q2 2000
Q1 2000
Q4 1999
Q3 1999
Q2 1999
Q1 1999
Q4 1998
Q3 1998
Q2 1998
Q1 1998
Q4 1997
Q3 1997
Q2 1997
Q1 1997
Oregon Exports by Industry
($ millions, current prices)
Total All Industries
Computer And Electronic Products
Agricultural Products
Transportation Equipment
Machinery, Except Electrical
Chemicals
Primary Metal Manufacturing
Paper
Wood Products
Food And Kindred Products
Waste And Scrap
Source: WISER, February 2008
y/y %
change
15,288.3 16,515.4 8.0%
2006
2007
6,549.7
1,490.5
1,883.6
1,571.3
496.9
495.0
373.6
372.4
321.3
306.7
6,303.5
2,201.0
1,749.0
1,694.7
664.2
601.6
427.2
419.4
409.2
407.3
-3.8%
47.7%
-7.1%
7.9%
33.7%
21.5%
14.4%
12.6%
27.4%
32.8%
Housing Related Sectors Feel the Effects (1st Quarter 2008)
10%
Newly Expanding
Expanding
Health Services
Prof. & Bus. Services
5%
Retail Trade
Food
Wholesale Trade
Metals & Machinery
Public Education
Finance Govt excl Education
Qtr-to-qtr %change
Leisure & Hospitality
Educational Services
Information
0%
T/W/Util
-5%
Electronics
Wood Products
-10%
Trans. Equipment
Construction
Contracting
-15%
-10%
Newly Slowing
-5%
0%
Year-over-year % change
5%
10%
Unemployment Rate by Region, March 2008
(Not seasonally adjusted; Portland MSA includes Oregon counties only)
Oregon: 6.3%
U. S.: 5.2%
(seasonally adjusted: 5.7%)
(seasonally adjusted: 5.1%)
5.3%
6.9%
6.2%
8.3%
7.9%
8.8%
Source: Oregon Employment Department
Office of Economic Analysis
Unemployment rate by MSA designations, March 2008
Note: Portland-Vancouver-Beaverton includes Clark and Skamania counties in Washington State
12%
Metropolitan Statistical Areas
9.9%
10%
7.9%
8%
6.3%
6%
7.9%
6.4%
6.2%
6.0%
5.6%
4.5%
4%
2%
0%
OREGON Metropolitan
NonArea
metropolitan
Area
Source: Oregon Employment Department
Bend
Corvallis
EugeneSpringfield
Medford
PortlandVancouverBeaverton
Salem
Office of Economic Analysis
30%
Oregon Index of Leading Indicators
(Six Month Annualized Percent Change, through March '08)
6.0%
20%
4.0%
10%
2.0%
0%
0.0%
-10%
-2.0%
-20%
-4.0%
Recession in Oregon
-30%
-6.0%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Leading Index (L)
Diffusion Index <50
Nonfarm Employment(R)
Oregon was Late to the Run Up in
Prices (Jan. 05 to Mar. 08)
Housing Price Index
(12-month percentage changes)
(Repeat sales)
50.0%
NV
AZ
40.0%
30.0%
Oregon
20.0%
California
ID
Washington
10.0%
Idaho
0.0%
OR
WA
-10.0%
Arizona
Nevada
-20.0%
CA
-30.0%
Jan05
Apr05
Jul05
Oct05
Jan06
Apr06
Jul06
Oct06
Jan07
Apr07
Jul07
Oct07
Jan08
LoanPerformance
Total Non-farm Employment
(Annual Percentage Change)
3.5
Oregon
3.0
U.S.
2.5
Percent change
2.0
1.5
1.0
0.5
0.0
2000 2001
2002
2003 2004
2005
2006 2007
2008 2009
2010
2011 2012
2013
2014 2015
-0.5
-1.0
-1.5
-2.0
Year
Office of Economic Analysis
Population: Oregon & U.S.
(Annual Percentage Change)
2.5
Oregon
Percent change
2.0
1.5
U. S.
1.0
0.5
0.0
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
Year
Office of Economic Analysis
Personal Income: Oregon & U.S.
(Annual Percentage Change)
9.0
Oregon
8.0
Percent change
7.0
U. S.
6.0
5.0
4.0
3.0
2.0
1.0
0.0
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
Year
Office of Economic Analysis
Oregon June 2008 Forecast Comparison:
Alternative scenarios (draft)
(Percent change)
Employment
2008
2009
2010
0.6
0.7
1.7
-0.3
-0.3
1.4
1.2
1.8
1.8
2008
2009
2010
Baseline
5.3
4.4
5.6
Pessimistic
3.9
3.3
5.4
Optimistic
6.2
5.4
5.5
Baseline
Pessimistic
Optimistic
Personal Income
Oregon Economic Assessment Going
Forward …
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Wood Products is in terrible shape, slight help from exports, but
very depressed.
Exports a sign of relief for agriculture, manufacturing, and service
sectors with overseas business.
Housing starts will continue to drop this year, correction and mild
growth in 2009.
House price appreciation may go negative (state-wide) but
adjustment should be quick. The drop in home prices will not be
as dramatice as other “hot” markets. Expect bottom fishing of
positive and negative price changes into 2009.
Job losses are possible in 2008, but may look more like 1990-91
rather than 2001.
Strong Federal Reserve cuts in rates and Fiscal Stimulus
Package likely out in May will lessen the downturn.
De c
2 00 7
Actual Revenues
Ma y
2 00 7
De c
2 00 6
Jun 2
0 06
De c
2 00 5
Jun 2
0 05
De c
2 00 4
Jun 2
0 04
De c
2 00 3
Jun 2
0 03
De c
2 00 2
Jun 2
0 02
Progression of 2007-09 Forecasts ($Bil.)
$15.0
Excluding Kicker
$14.5
$14.0
$13.5
$13.0
$12.5
$12.0
For more information…
Office of Economic Analysis
155 Cottage Street NE, U20
Salem, OR 97301-3966
(503) 378-3405
email: [email protected]
http://www.oea.das.state.or.us
Office of Economic Analysis