Northwest Oregon has had its share of economic challenges in 2021 as businesses have struggled to find customers or staff, or both, but the construction industry has been a bright spot for the region.
In St. Helens, you can spot a number of building projects that are adding to the employment levels and to the city's overall economic growth.
By the numbers
Construction employment in Clatsop, Columbia, Lincoln, and Tillamook counties climbed to around 3,100 jobs during the summer of 2021 and seemed to be having just a small seasonal drop as the industry headed into winter. The last time employment was this high was during the housing boom of 2006 to 2008. This time the growth looks much more sustainable.
From about 2005 through 2015 the construction industry experienced a classic boom and bust fueled by speculative investment followed by financial collapse. Since then the industry has seen solid but not explosive growth in employment.
House prices themselves may be increasing faster than they can sustain in the long run, but construction employment growth has been more moderate. Over the last 20 years from November 2001 to November 2021 construction employment increased 54% in Clatsop County, 88% in Columbia County, 23% in Lincoln County, and 45% in Tillamook County. (Comparable figures are not available for Benton County because the construction industry is combined with mining and logging.)
This growth in construction employment has been faster than comparable overall employment growth and faster than population growth. Overall growth in nonfarm payroll employment was 21% in Clatsop County, 18% in Columbia County, 3% in Lincoln County, and 17% in Tillamook County. Population growth from 2001 through 2021 was 16% in Clatsop County, 19% in Columbia County, 13% in Lincoln County, and 13% in Tillamook County.
Does this mean the construction industry is heading for another boom and bust? Probably not, at least in the foreseeable future. Not only are lending standards more strict than during the boom of the mid-2000s, but the construction industry’s share of total employment in the four counties is pretty typical.
Statewide the construction industry comprises 5.9% of total nonfarm payroll employment. It has the same share in Clatsop and Columbia counties and is below this share in Lincoln County (4.6%) and Tillamook County (4.7%). Additionally, these shares have grown only slowly over the past 20 years.
In summary, the construction industry does not make up an unsustainable share of the economy in Northwest Oregon. Instead, the industry is growing moderately in response to a real and sustained increase in housing demand.
Erik Knoder is a regional economist with the Oregon Employment Department. He may be reached at 541-351-5595.