While the Portland region will be entering its ninth consecutive year of economic expansion and jobs growth in the coming year, the overall pace of growth in Oregon’s biggest metropolitan region is finally slowing. This forecast of future economic conditions was published in a report released today by Portland State University’s Northwest Economic Research Center.
“When a community reaches full employment like ours has here in Portland, our ability to continue to grow fast is limited by resources like construction labor and land available to continue fuel that growth,” said Tom Potiowsky, director of the PSU center and a former state economist.
The report, titled Portland MSA Economic & Population Outlook, predicts that Portland’s red-hot metro housing market will continue to cool. One factor slowing growth in the Portland region is the lack of affordable housing. Rising rents not only slow down the migration of newcomers to Portland but also drive current city dwellers looking to buy or get more space further and further out of the city.
“What we’re starting to see is a movement outside the core metro area for housing,” Potiowsky said. “Close in Portland apartments are just too expensive for many lower income workers. As they move further and further from the metro core, their commute times and potential transportation headaches rise.”
At a conference held in Portland today where the group’s Portland Economic & Population Outlook report was unveiled, Potiowsky and his collaborators also published two articles in the report highlighting features of the region’s economic health.
- Millennials: Beyond the Headlines explores the millennial generation and how this demographic’s personal and social values may influence their spending, and, therefore, the shape of our economy.
- Windfall from Tax Cuts: What’s a Business to Do? looks at the actions businesses may take in response to the recently passed Tax Cut and Jobs Act of 2017.
While Potiowsky and his colleagues forecast slower growth across the board in jobs, housing and population, they don’t see a recession on the horizon for 2018. One welcome addition to the economic expansion is wages, which are expected to rise.
“In some ways the housing affordability issue may be helped by wage growth,” said Potiowsky. “With wages going up, some Portlanders will be able to hold on to their apartments a bit longer and not be forced out of the urban core because of rising rents.”
Northwest Economic Research Center (NERC) focuses on economic research that supports private and public policy decision-making and relates to issues important to the Pacific Northwest and the Portland Metropolitan Area. NERC serves the public, nonprofit and private sector community with high quality, unbiased and credible economic analysis.