State’s manufacturing industry has weakened ‘considerably’ since 2021 as it rebounds from the pandemic facing housing shortages, population loss and high taxes.
Oregon’s traditionally strong manufacturing sector faces major challenges that have caused it to lose ground to other states in recent years.
That’s the top line of a recently released report of pro-business association Oregon Business & Industry that describes several distressing trends in the state’s manufacturing sector. Chief among them are a lack of shovel-ready land for companies looking to expand in Oregon, and high taxes and rising housing costs that have diminished the state’s quality-of-life advantage over other states — factors also said to be driving population decline in Oregon.
The state’s downward trend is concerning partly because it occurred during an national upswing in manufacturing. Though manufacturing makes up a larger portion of Oregon’s GDP than West Coast neighbors California and Washington, in recent years the Beaver State has lost ground to Wisconsin, Texas, Illinois and Minnesota.
According to the report, in the post-pandemic years of 2021 to 2023, Oregon’s manufacturing job growth fell behind the national average for the first time in three decades.
“The widespread weakness in Oregon job growth suggests that broader conditions — including housing unaffordability and recent shifts in tax and service policy — could be affecting the economy generally,” the report says.
The report, prepared by Portland consultancy ECOnorthwest, comes three years after a previous version that claimed Oregon’s manufacturing sector punched above its weight in terms of economic activity, worker pay and closing educational and racial/ethnic attainment gaps. In the meantime, the Biden administration and Congress have invested heavily to bring back U.S. manufacturing jobs lost in the pandemic. The administration has announced private companies plan $910 billion in new investments in the future.
Manufacturing is considered important to the state economy because Oregon exports most of its products and therefore pulls dollars in from other states. Much of Oregon’s recent manufacturing investment has occurred in the semiconductor space while little has occurred in clean energy, heavy industry and bio-manufacturing — sectors growing nationwide. The period also saw weak job growth figures in other traditionally powerful industries including construction, professional and business services, and leisure and hospitality. Oregon also lags in investment in growing sectors including electric vehicles, clean energy infrastructure and biomanufacturing.
The industry jobs represent around 11% of total jobs in Oregon, or around 204,000, while the industry contributes $36.3 billion to the state GDP. Manufacturing jobs remain well-paying across Oregon compared to other industries, according to the report. Jobs in the manufacturing industry pay an average median salary of $65,000 compared to $55,700.
The majority — 90% — of manufacturing job growth in Oregon is balanced among four key sectors: food and beverage; wood products; metals and transportation; high-tech/electronics. The report describes several bright spots in the state economy. Oregon’s wood products manufacturing industry continues to rebound from a six-decade low in the late 1990s, fueled in part by the emerging mass timber sector.
The report calls on lawmakers to address problems that have diminished the state’s competitiveness.
Like many pro-business interests, OBI has taken a strong stand against Measure 118, a controversial question on the Nov. 5 ballot that would raise corporate minimum taxes and divide the revenue among Oregon’s four million-plus residents.
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