Oregon Insight: No signs of recovery in state manufacturing
Here’s The Oregonian’s weekly look at the numbers behind the state’s economy. See previous installments here.
Oregon hotels are reopening, restaurants are serving meals again, and employees are starting to return to the office as vaccines proliferate and the COVID-19 pandemic begins to subside.
State factories, however, may have suffered permanent damage.
Overall, Oregon has recovered 59% of jobs lost during the pandemic, and the state’s unemployment rate fell from 13.2% in April 2020 – the highest point on record – to 6.0 % last month. These advances reflect the easing of health restrictions and billions of dollars in federal money that helped support the private sector during the pandemic.
The manufacturing sector is not showing a similar rebound. Oregon has only recovered one-fifth of the factory jobs lost a year ago, and recent numbers point in the wrong direction.
As Oregon Employment Department economist David Cooke noted earlier this month, the number of hours spent by workers in Oregon’s manufacturing industry at work had declined even before the pandemic. Before anyone said the words “COVID-19,” economists warned the state was facing a “manufacturing recession” as former President Donald Trump’s trade war disrupted global supply chains and economies were slowing in Europe and China.
And while Oregon has never closed private factories with coronavirus health guidelines, some of the markets served by those factories have been severely affected by the pandemic.
Metal component maker Precision Castparts laid off 40% of its employees globally last year as demand for planes dried up and Boeing halted production of its struggling 737 MAX. Railcar maker Gunderson cut jobs the month before the pandemic hit, and more in the months since. Steelmaker Evraz has cut its Portland workforce by about half.
While many other sectors expanded this spring, Oregon’s manufacturing sector lost 700 more workers in April, according to the latest state data.
Factory workers work an average of about 38 hours a week, an hour less than before the pandemic. Economists view these hourly figures as a key indicator of the health of the manufacturing sector.
A shortage of computer chips has hampered manufacturing across the country, stalling everything from gadgets to automobiles, while factories wait for key components to become available. And factories in Oregon and across the country face a tight labor market as companies rush to reopen and rehire.
Oregon remains one of the most manufacturing dependent states in the country. And jobs in state factories are relatively well paying, with average incomes of around $ 75,000 a year, compared to $ 59,000 across all industries.
Manufacturing is a notoriously cyclical industry, with great fluctuations in a changing economy. But Oregon’s factories have been in steady decline for decades, and recent recessions have produced only partial recoveries – and lasting damage.