Portland Metropolitan Area’s Economic Recovery Successes and Ongoing Challenges

May 9, 2022

Entering the third year of the pandemic, the Portland Metropolitan Area is well down the road to a full jobs recovery. To date (March 2022), the region has regained 149,400 jobs, or 83% of pandemic losses. The rebound has been remarkable, broad-based, but not equal.
Steep Losses

Portland and the nation plunged into a deep recession virtually overnight in early 2020. All broad industries contracted between February and April, but some were hit much harder than others:

• Leisure and hospitality bore the brunt of the recession as restaurants, bars, gyms, golf courses, theaters, and other entertainment and recreational businesses shuttered or reduced operations. Half of this sector’s jobs disappeared in just two months.
• The second hardest-hit sector was ‘other services’, which is comprised of many in-person establishments such as hair and nail salons and religious organizations. This sector shrank by 25%.
• Private education (-20%) suffered a double hit from schools suspending in-person learning due to the pandemic and the unrelated closure of Concordia University.
• Retailers (-16%) closed or limited operations. Food and beverage stores was the only major component to avoid job losses in the early months of the pandemic.

Together these four industries, which made up 26% of the economy heading into the pandemic, accounted for well over half (59%) of the region’s total losses.

Remarkable Rebound

Portland metro embarked on its jobs recovery in May 2020. With the exception of December 2020, when the Governor enacted a temporary “freeze period” due to a surge in COVID cases, the region has added jobs every month since. As with the pandemic decline, the recovery has been broad-based yet not equal.

Employment in several industries have fully recovered and are now above pre-pandemic levels:

• Transportation and warehousing emerged barely scathed, experiencing just two months of losses before growth resumed as people increasingly turned to ecommerce.
• Information also experienced a short period of losses (3 months), the vast majority in movie theaters and film production. Those sectors have mostly recovered while others, such as software publishing and data processing and hosting services, barely lost a beat and went on to add hundreds of jobs over the last few years.
• Construction is another industry with relatively mild pandemic losses. Some cranes were already coming down in Portland prior to the pandemic, and a few major projects wrapped up over the following year. This weakness in commercial construction has been offset by strength in residential, and employment is 1,000 jobs above pre-pandemic levels.

Eight industries are a combined 38,700 jobs away from a complete recovery. A few lag more than others: 

• After losing 63,100 jobs, leisure and hospitality is now 15,200 jobs shy of a full recovery; the largest gap of any industry. We haven’t see a full return to in-person activities; COVID is still keeping some residents away from restaurants, gyms, and entertainment venues. In addition, many office workers who commuted into the city of Portland prior to the pandemic are now working from home. Consequently, fewer people are downtown going out to lunch, dropping off dry cleaning, hitting the gym, meeting for drinks after work, and shopping. Also, tourism hasn’t returned to pre-pandemic levels, nor has business travel. Domestic travel at Portland International Airport is down 30% from before the pandemic, and international travel is down 50%. Demand for lodging (rooms) rooms is off by 15%.
• Health care is 3,500 jobs below February 2020. The ambulatory care component (e.g. doctors’ and dentists’ offices, outpatient care) has nearly returned to pre-pandemic employment levels, while hospitals and residential care facilities lag. A significant chunk of the gap is not due to lack of demand, but rather lack of supply. Employers would hire more people if they could find the workers. Health care and social assistance firms were looking to fill 9,000 vacancies in the Portland Tri-County region at any given time in 2021 according to the Oregon Employment Department’s Job Vacancy Survey. Many have turned to health care staffing firms (e.g. traveling nurses) to meet their needs. These jobs are counted in the temp help industry, not in health care.
• Government is 4,900 jobs away from a complete recovery, nearly all in the local education component. Enrollment in the region’s community colleges declined during the pandemic. Although stabilized, it hasn’t returned to levels seen prior to COVID. Enrollment in K-12 is also down, likely for reasons both related to the pandemic (online options and private schools) and unrelated (declining school-age population). On the supply side, as with health care and other industries, schools are struggling to find workers amidst a very tight labor market.

Consider This

No doubt Portland’s (and the nation’s) recovery has been hampered by ongoing issues related to the pandemic such as travel concerns and supply chain disruptions. However, employers are also struggling with a very tight labor market. Job vacancies in the Portland region and Oregon are at all-time highs (2021). There are more job openings locally and nationally than unemployed workers. (For more insight, see Gail Krumenauer’s article on Oregon’s Beveridge Curve). It’s not a stretch to speculate that the metro area, Oregon, and the nation would be further along in their recoveries if not for the current worker shortage.

Outlook

The state Office of Economic Analysis’s March 2022 forecast anticipates Oregon will make a full jobs recovery by the end of this year. All broad industries will add jobs due to a combination of pandemic rebound and underlying economic expansion. The Portland metro area should follow suit. The region has averaged 5,000 new jobs monthly over the past year. If that trend continues, and that’s a big ‘if’ given COVID’s tenacity and unpredictability, the recovery will be complete this fall.