The entrance to the Pine Tavern is viewed on August 9, 2021, in Bend, Oregon. George Rose | Getty Images
What a difference a year makes. Oregon climbed 17 spots to finish at No. 18 in the CNBC America’s Top States for Business rankings for 2022, the biggest improvement of any state. Last year at this time, Oregon’s economy had contracted by 2.8% after the Covid pandemic dealt a body blow with its financial health heavily reliant on international trade and tourism. No state fell further in last year’s rankings as it struggled to rebound. It did rebound, and then some. The state’s economy snapped back to grow 5.8% in 2021 as trade and tourism return. Also rebounding in a big way: the state’s revenue. Payments during tax season this year jumped 70% from an already strong 2021, according to the Oregon Office of Economic Analysis, which now expects the state will have $427 million more in its coffers than it had forecast as recently as March. Economic gains are big, but vulnerable In the Economy category of the CNBC study, Oregon improves to No. 15 from No. 29 last year. But state economists warn this growth is likely fleeting.
“Some of these really strong gains are clearly temporary and will either fall or more likely crash back to earth in the quarters and years ahead,” wrote state economist Josh Lehner in a blog post in late June. “This is not a permanent shift to higher taxes but rather reflects pandemic factors and/or taxpayer behavior.” Lehner cautioned that much of the gain in tax revenue came from nonwage activity such as realizing capital gains. That, he warned, is not sustainable. “With recessionary risks rising, profits and gains could soon turn into losses,” he wrote.
A worker attaches the front clip to the backbone on a three-wheeled electric fun utility vehicle (FUV) at the Arcimoto manufacturing facility in Eugene, Oregon, April 19, 2021. Alisha Jucevic | Bloomberg | Getty Images
In their official forecast, state economists expect Oregon will persevere through the challenges, thanks in part to all the unexpected money in the bank. The forecast calls for solid job growth — 3.8% this year, and 2.3% in 2023 — along with more revenue expansion. The biggest risk, they write, is inflation persisting longer than expected, leading to a sharper response from Federal Reserve policymakers as they seek to rein in prices. “A more severe recession would likely be needed to wring out more entrenched inflationary pressures, whereas a milder recession may be needed if most of today’s inflation is transitory, or temporary,” the forecast notes. Skilled worker help Also helping Oregon in 2022: the competitive landscape is shifting to its strengths. Historic worker shortages have elevated the importance of the Workforce category in CNBC’s study, because the methodology assigns greater weight to the competitive factors that states are pushing the most. Oregon typically does well in the category, and it improves to No. 9 in 2022. The state boasts the eighth-highest concentration of science, technology, engineering and math (STEM) employees, according to the U.S. Bureau of Labor Statistics. Net migration of college-educated workers to the state is also among the highest in the country, according to Census data.
At BEL (Brain Electrophysiology Laboratory) in Eugene, OR Test Engineer Sofia Fluke and Research Laboratory Manager and Test Engineer Shijing Zhou demo the research as Shijing is fitted for a Geodesic Head Web with 280 electrodes that does standard EEG collection. Their research looks at insomnia, Parkinsons, Alzheimer’s and they recently received a grant from the Department of Defense to use their devices to help improve performance in military personnel who have restricted sleep. Leah Nash | The Washington Post | Getty Images