Oregon Construction Employment at Record HighsDecember 15, 2022
Oregon’s construction industry reached another record high number of jobs in recent months, employing 121,200 on a seasonally adjusted basis in November. The industry bounced back quickly from the COVID recession in which it dropped to about 100,000 jobs in April 2020. It has risen rapidly in 2022, as one of Oregon’s strongest industries this year. Prior to that, the industry added jobs steadily and rapidly during 2013 through 2019, following a prolonged slump in 2009 through 2012, when employment remained near 70,000 for several years after the 2008-09 recession.
Looking back more than 30 years, clearly the industry has been highly cyclical – experiencing booms and busts over the course of multi-year expansions that were followed by briefer, but potentially precipitous contractions.
In the late 1990s the industry hovered close to 80,000 jobs for several years, dropped some jobs in a mild recession and then resumed its climb. Just before the 2008 recession, Oregon’s construction industry was slightly below today’s employment total, at about 104,000 jobs.
Oregon’s economy and population have been on a generally expansionary trend since the late 1980s. Population typically grew about 1% per year, primarily due to net in-migration – more people moving into Oregon compared with the number moving out.
Because the population has been steadily expanding, it can be helpful to look at the construction industry’s total jobs relative to overall employment. Over the past 30 years, construction has employed between 4% and 6% of Oregon’s total nonfarm payroll employment. The lowest share during this period occurred in 1992, when 4% were employed in construction. Not far behind was the period from 2010 through 2012 when about 4.2% of payroll jobs were found in construction.
The housing-price boom leading up to the 2008-09 recession coincided with one of the largest shares of construction jobs, as construction employed 6% of all nonfarm payroll jobs during much of 2006 and 2007. Currently, Oregon’s construction industry is once again as concentrated as that period, with an average of 6% of nonfarm jobs in the industry during the most recent 36 months.
Leading up to the past two national recessions, Oregon’s construction employment has either flat lined, as was the case in 1997 through 2000, or abruptly tanked, as occurred just prior to, and certainly during, the 2008-09 recession. The good news is that construction employment in Oregon bounced back quickly following the COVID recession and is now charting new record highs.
One of the reasons that the economic expansion between 2013 and 2019 – both in Oregon and at the national level – was so long and persistent was due to the pattern of housing starts. In the several years immediately following the 2008-09 recession, building permits and housing starts were very low by historic standards. The low level of residential construction activity and spending was a limiting factor for economic growth, given that new-home building is a major component of change in the overall dollar value of economic activity for a region. In Oregon, residential building permits (single-family and multi-family combined) stagnated near an average monthly rate of 600 during 2009 through 2011, but have since climbed to the current rate averaging close to 1,600 per month over the past six plus years. Despite the near-tripling of monthly housing permits in the timespan, we’re still well below peak levels seen during several periods during the 1990s and mid-2000s, not to mention the house-building boom in the late 1970s, when building permit activity was double the current level.
Construction activity includes more than just building homes and apartments. There is road construction and commercial construction, as well as remodeling and other forms of construction employment. This brief article looked at the trends over time in residential building permits, as they are a key measurement that is readily available to assess Oregon’s construction industry.
Overall, Oregon’s construction employment trends indicate that over the past two years we have been experiencing high-demand times in the industry. Oregon has gone through several cycles in the construction industry over the past several decades. Currently, the sector is at a record high in terms of overall construction jobs. And, at 6% of total nonfarm payroll jobs, is essentially tied with the record highs in 2006 and 2007 as a share of total jobs when measured relative to the state’s ever-growing population.