What’s Up for 2015?
With 2,952,000 jobs added in 2014, last year posted the largest annual job gains since 1999. The labor market continued to strengthen in December, adding 252,000 jobs and showing upward revisions for the prior two already-strong months. Meanwhile, every major industry posted a net monthly gain for the last month of the year, and the unemployment rate dropped two-tenths of a percent to 5.6 percent.
In addition, the number of part-time workers who would like to be full time, a key metric watched closely by the Fed, continued its descent. All this good news comes from the monthly economic commentary by Mark Pinkowski of Wells Fargo Commercial Banking, who rarely has such a positive message about the economy.
So what’s up? In this issue several local business leaders in various industries have offered their views on the local economy for the coming year.
Roger Lee of EDCO reminds us that the economic events of the past decade tell us that the business cycle, with its four phases of accelerating growth, slowing growth, recession and recovery are real. The question now is whether we are in the accelerating or slowing growth phase.
Look around you and you can see that some sectors are booming – hitting all-time highs for sales and employment (brewing and distilling, health services) while others are in contraction (financial services), while yet others are in recovery (aviation/aerospace). Overall, according to Lee, the positives are clearly outweighing the negatives and as a result, our tri-county economy is adding new jobs, new employers and new residents faster than any region of the state.
From the commercial real estate sector both Brian Fratzke and Andie Edmonds portray a positive outlook. Fratzke noting that we are running out of inventory in all sectors while demand continues to increase. Construction costs have increased and the governmental fees to develop new construction or to redevelop existing structures have increased greatly. And Edmonds offers that although the last few years have been viewed as stable or holding, the last six months have rendered continuing increases in lease and occupancy rates, which leads to an increase in valuation of commercial assets and right into the next phase of the cycle – development.
However, Fratzke sends a friendly warning that Bend’s growth is creating new challenges. He advises that we embrace change, accept that our community is going to grow and we should manage it effectively. Get involved in the process of helping our community leaders work through the process so that we can all enjoy our community and that we can plan to have our children be in a position to be able to afford to move back to town.
One aspect of our economy that we rarely focus on is the economic impact of wilderness areas, which can range from recreation assets, an increased quality of life factor that can attract new residents and businesses, increased property values and other off-site benefits like watershed protection and fish/wildlife habitat protection.
Recent studies of western counties and states have shown that population, income and employment growth increased as the percentage of wilderness increased and the West’s popular national parks, monuments, wilderness areas and other public lands offer its growing high-tech and services industries a competitive advantage. The wilderness areas also play an important role in attracting visitors to our region.
Doug La Placa of Visit Bend would certainly concur with that assessment stating that the overall economic impact of tourism in Central Oregon is estimated to exceed $600 million in 2015. In addition to the direct visitor spending, tourism creates an important long-term economic benefit by serving as the gateway industry to attract new businesses and new residents to Bend. It’s difficult to find a business in Bend that does not benefit from the economic growth created by the tourism industry.
Tech experts, bankers and internet providers suggest that businesses prepare for the numerous technology changes constantly bombarding us. Gary O’Connell of Columbia Bank offers that digital technology will continue to present opportunities and unique challenges to industries of all kinds. As a business owner you must keep the focus on your customer and navigate these trends wisely. The goal is to find the right balance between adapting to modern trends while retaining a model that can stand the test of time.
Shane Ketterman of TDI Tech Solutions reminds us that we are not in a local micro-economy any longer. Your business now competes with businesses around the world. We all love to support local and we definitely should but, he says, when it comes to comparison pricing, customer experience and giving people what they want, you are competing with a global economy and a sea of similar businesses.
In you’re a new, emerging, growing business in Central Oregon there’s lots of help out there from Opportunity Knocks, Economic Development of Central Oregon with numerous industry resources and the Small Business Development Center at Central Oregon Community College that focuses on helping build Oregon’s best businesses. They offer no-cost one-to-one business advising, business planning, educational workshops, market research and assistance in accessing capital for businesses. (You can find all of this information in this issue.)
EDCO reports that it is seeing a proliferation of startups and young companies in our region. Every week Cascade Business News has an entrepreneur drop by our office with a new business idea, a growing company or a start-up. And many of these entrepreneurs are moving here from Portland or other states because Central Oregon has become one of the hottest new places for incubating their ideas and raising their families.
The prediction for 2015 in Central Oregon (from Roger Lee): Now, more than ever, we have the people, capital and critical mass in place to take Central Oregon’s economy to new heights in terms of strength, diversification and ability to produce well-paying employment for its residents.
Here’s to a great new year complete with economic opportunities.
