Writing an Economic outlook at the start of a new Presidential administration brings an interesting challenge. There are so many unknowns. The first few weeks of the second Trump Administration included a flurry of new executive orders, some of which will be challenged in court. The total impact of the EOs is yet to be determined but so far, we can reliably predict some chaos. Before getting into a local outlook though, let me reshare my background.
I have a degree in Industrial Engineering, which is a fancy title for continuous improvement at the intersection of business, people and policy. I took additional economics courses and went on to study business strategy online at Harvard. Professionally, I have spent seven years in the people ops space helping companies create their hiring strategies, recruit and retain their key players, and watching the trends that will shape the employment landscape. Boiling it down, my day job is talking to people about their careers and connecting people into the right seats. With that, let’s get into a Central Oregon 2025 Economic Outlook.
Employment in Central Oregon has largely stayed flat for the past two years with Crook County having the largest growth in unemployment. The positive growth we did see in 2024 came in medical, government, professional services, and hospitality. We’re hopeful to see job growth in 2025 in financial services, nonprofits, construction, engineering services, medical services and manufacturing. With possible changes to federal contracts though, there are some unknowns within any industry taking public funding. Additional large topics we anticipate conversations on:
Mergers and acquisitions could make a comeback in ’25 and 26. Historically, Central Oregon has seen our home-grown companies become targets of acquisition. G5, Navis, Zamp, BASX, Hydroflask, Humm, Apricity, the Biotechs and even Les Schwab have been acquired by outside capital in recent years. In 2025, it’s likely we’ll see more home-grown businesses take on outside capital. Will Mt. Bachelor be the first acquisition of the year?
Californians and those seeking specific access to medical care will continue moving to Bend and Central Oregon, keeping real estate prices steady despite high interest rates. The devastating wildfires in Southern California paired with challenges to rebuild could mean families seeking a faster path to stability will move to Bend. Families living in states that have made medical care more challenging to access will also choose places like Central Oregon to call home.
Remote employees will continue to be shocked by local pay rates. We all know the story; someone from Nike, Amazon, a Federal Agency or other large businesses moved to Bend in 2020-21 during the Pandemic with their remote job. Then, in 2024 the rules changed and companies started demanding time in the office, forcing people to choose between their role or staying put in Central Oregon. We talk to people every week who are in that boat and looking for a way to replace their income to stay here. Unfortunately, the local pay scales do not always match that of outside companies. The office vs remote work debate will continue to take place in 2025 with compensation and benefits roped in as well.
If interest rates drop more in 2025, the housing market here will pick back up again, and we’ll see companies make needed capital investments. If interest rates stay high, debt-financed businesses could be forced to sell. Homeowners looking to refinance in 2025 could have a hard time if interest rates don’t fall. Current indicators point to no interest rate drops in 2025, which could mean more need for affordable housing programs. The impact of this will be felt by those buying cars, homes, or even inputs for your business. If you sell a high-ticket item, sales growth may be flat in 2025. The possible impact from tariffs is yet to be seen, but our network of local companies has been stocking up in inventory just in case.
Manufacturing companies and businesses that need a large real estate footprint are moving to Redmond and Prineville which will create more demand for housing in those areas. Over time, it will create needs for schools, medical access, and retail businesses as well. The landscape is shifting so that professional services are largely going to be based in Bend, and anything that requires a large footprint is likely moving to Redmond or Prineville.
A rise in private consulting companies with a focus on winning government contracts is a possibility in 2025. If the Federal agencies are being brought back into an office or asked to resign, there could be a large number of experienced government employees looking for a new career path. Specifically, that will look like consulting practices spinning up to partner with private companies that are bidding on government work.
The final big topic that will continue to make waves is AI. What is it being used for, who is using it, what liabilities will users have, etc. In the employment market, job seekers are using AI to write resumes and cover letters and mass apply to jobs. In hiring, AI is being used to streamline appointment setting and identify people to recruit. The liability in using a biased AI program (either knowingly or unknowingly) is so high that smart companies are not using AI to screen candidates. Software workers have seen a notable drop off in relevant job openings given what AI can do to write code in minutes, though this is not a large part of the local workforce and the impact locally has been minimal.
From our perspective, the first half of 2025 will be a lot of watching to see what happens. The number of unknowns is sky high. The second half of 2025 and into 2026 will likely bring changes across policy and regulation. In Central Oregon, we’ll continue to see tourism, semi-disruptive road projects, more housing demand and 1-2% job growth across the tri-county MSA. The diversity of our economy will keep us moving forward, despite some chaos in early 2025 at the national level.
