Portland metro finds ‘new normal’ economy, slower job growth in 2024 report
PORTLAND, Ore. (KOIN) – The Portland Metro Chamber and Downtown Portland Clean & Safe released their 2024 State of the Economy report on Thursday — detailing the need to focus on attracting residents and visitors amid slowing job growth.
The report analyzed the economic outlook for the Portland metro area over 2023 and looked at the impact of population loss in the state.
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Researchers highlighted four key takeaways: a decline in Portland job growth, a re-evaluation of peer cities, a better outlook for Central City foot traffic, and a need to efficiently spend tax dollars.
Job growth wanes
As far as jobs, the report says the region can declare pandemic recovery is complete and should look ahead to post-2023 growth.
Even though the region is past pandemic recovery, the report says the Portland metro area saw below-average job growth compared to the rest of the United States, with 1.3% growth in 2023.
Among the jobs report, researchers found three out of the four metro counties, excluding Multnomah County, exceeded their 2019 job totals.
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The metro area saw a 4.1% increase in the leisure and hospitality sector — a sluggish increase compared to 2022, which saw a 10.4% increase in the sector, according to the report.
The region’s job market also experienced losses, including 11,000 jobs lost in the professional services, manufacturing, and information sectors.
There was also a drop in leased office space at 290,000 average square feet of leased office space, down from 660,000 square feet, officials said.
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Re-evaluating peer cities
The report re-evaluated peer regions to measure the Portland metro area’s progress — previously including Austin, Nashville, Indianapolis, Salt Lake City, and Seattle, which have all left Portland behind, officials said.
The new peer cities in the 2024 report include Denver, Milwaukee, Minneapolis, and Sacramento. These cities were selected based on similar population, per capita income, cost burdens, and Gross Domestic Product.
These cities also experienced declining migration, and similar foot traffic trends as Portland’s Central City.
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According to the report, Portland had a strong recovery in 2023, adding, “We have now reached a stabilized “‘new normal.'”
Portland’s Central City
Portland’s Central City had a strong recovery in 2023, only trailing Seattle and Minneapolis, the report says.
The report points out that the pandemic changed the role of downtowns across the United States, with more reliance on residents and visitors compared to years past.
Researchers said this represents the “new normal” and ongoing recovery efforts should look beyond attracting office workers as the Central City needs more residents, and visitors, including tourists.
Amid concerns for decreased foot traffic in downtown Portland, the report found a 14% increase in Central City foot traffic compared to 2022.
The report also found an 8% premium to live in Portland when adjusting for median household income, which was mostly driven by high housing costs.
Taxes
According to the report, Portland lawmakers need to find more efficient ways to spend tax dollars.
The city saw a 26% increase in taxes, which was partially driven by voter-approved measures, officials said.
The report found that Portland spends more money per capita than its peers.
Areas for concern include the lack of affordable housing, livability, and taxes – particularly for basic services such as safety and the 911 system.
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”Whatever economic energy that could be captured through the cessation of public health restrictions or other pandemic era headwinds has concluded. Starting January 1, 2024, we must acknowledge that this is the new Portland regional economy baseline, and our new peer regions,” said Andrew Hoan, President and CEO of the Portland Metro Chamber.
Hoan added “Our collective focus needs to be on reversing the decline in population and inclusive economic development, with urgency. Our region is beginning to head in the right direction but we must continue to support policies and big investments that allow us to effectively out-compete our peers around the country.”
“The 2024 State of the Economy report illustrates the importance of government, business and community leaders continuing to collaborate to confront the serious challenges our community faces,“ said Roger Hinshaw, Bank of America president for Oregon and SW Washington. “While much work has been done over the past 18 months to secure the vitality of our region, this report underscores the need to continue to be laser-focused on creating a community that is thriving for local families and businesses.”
The report was made in partnership with ECONorthwest and presented by Bank of America.
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