Oregon’s Economic Outlook for 2024
The most recent economic and revenue predictions
released by the state of Oregon indicates that the state economy will continue to grow steadily but slowly in 2024. Despite the strong recovery from the COVID-19 pandemic, economic growth is predicted to be slow to moderate as the economy moves closer to its full potential.
Early recovery boom industries like manufacturing, construction, transportation, and warehousing are expected to slow down. The unemployment rate in 2024 is projected to be 4.2%, which is low and stable.
This extended period of full employment suggests that, without a more rapid population increase in Oregon, there are limitations to growing the workforce. Businesses may have a challenging time filling open positions moving forward.
This falls short of the 0.7-0.8% growth rates the state had anticipated for the next few years as net migration to Oregon is expected to increase. The birth rate is decreasing so an increase in population will need to be primarily from migration to the state.
The demographic outlook shows that school-age children (5-17) and those (0-4) are expected to decline between 2022 and 2024. In contrast, the senior population, those 65 and older are expected to grow by over 2% annually which will drive demand for healthcare services. Working age adults, 25-64 years old are expected to grow by nearly 10,000 or 0.8% in 2024.
Increased workforce participation among the current population, including groups with historically lower employment rates could help boost workforce availability.
Employment rates for younger Oregonians remain below year 2000 levels while older groups are working more than before. If youth labor force participation rises, the stat’s workforce may increase significantly beyond forecasted gains. This would provide a crucial labor supply for Oregon.
Oregon's economy has been doing better than expected. State revenues exceeded forecasts by more than 2% from 2021 to 2023, meaning that there will likely be around $5.5 billion in kicker rebates going back to taxpayers in 2024. Public education will be the primary recipient of these corporate kicker funds.
Increases in inflation and interest rates are the two primary reasons why Oregon may see a recession in 2024. Long-term inflation could increase state revenues if current trends continue, assuming no changes to tax laws or rates.
IT temporary staffing led growth at 16%, followed by finance and accounting at 12%. Life sciences also saw a sizable 20% jump. Demand is being driven by talent shortages and use of contingent workers. An estimated 14.1 million people did temporary or contract work through staffing firms in 2021.
Looking ahead, the industry is projected to see more moderate single-digit growth after the rapid pandemic recovery period. Revenue is forecast to reach $211.8 billion in 2023, and $216.9 billion in 2024. IT, finance, and engineering roles are expected to remain in high demand.
For staffing firms, areas of opportunity include investing in technology to improve recruiting, being flexible on location, focusing on high-demand roles, and strengthening client and candidate relationships. Energy and life sciences are growing sectors to explore. With proper strategy, the staffing industry still presents a large opportunity for expansion and revenue growth in 2023-2024.
Oregon's tight labor market presents hiring difficulties for local businesses. Talk to our staffing experts today to strategize winning recruiting and staffing plans that secure top talent to drive your continued success.
Employment
By 2024 it is estimated that Oregon will reach 2,010,900 jobs, which is an increase of 19,500, or 1.0% over 2023. This shows a sharp decline from the approximately 4% growth rate in 2022 when the majority of the pandemic's effects subsided. According to the forecast, most industries in Oregon will see only modest growth, with the healthcare, leisure and hospitality sectors expected to increase at a faster pace as they continue to recover from pandemic-related losses.Early recovery boom industries like manufacturing, construction, transportation, and warehousing are expected to slow down. The unemployment rate in 2024 is projected to be 4.2%, which is low and stable.
This extended period of full employment suggests that, without a more rapid population increase in Oregon, there are limitations to growing the workforce. Businesses may have a challenging time filling open positions moving forward.
Demographics and Population
During the pandemic population growth in Oregon stagnated but is expected to see a modest recovery. Oregon is forecasted to see a population increase of 20,500, or 0.5% from 2023, reaching 4.31 million residents.This falls short of the 0.7-0.8% growth rates the state had anticipated for the next few years as net migration to Oregon is expected to increase. The birth rate is decreasing so an increase in population will need to be primarily from migration to the state.
The demographic outlook shows that school-age children (5-17) and those (0-4) are expected to decline between 2022 and 2024. In contrast, the senior population, those 65 and older are expected to grow by over 2% annually which will drive demand for healthcare services. Working age adults, 25-64 years old are expected to grow by nearly 10,000 or 0.8% in 2024.
Labor Force Participation
As of March 2023, Oregon’s labor force participation rate was 62.7%, which was in line with expectations indicating a strong labor market.Increased workforce participation among the current population, including groups with historically lower employment rates could help boost workforce availability.
Employment rates for younger Oregonians remain below year 2000 levels while older groups are working more than before. If youth labor force participation rises, the stat’s workforce may increase significantly beyond forecasted gains. This would provide a crucial labor supply for Oregon.
Revenue and Taxes
Estimated General Fund receipts for 2023-2025 are expected to be $25.4 billion, an 18% decrease from 2021-2023. Income taxes are expected to fall by 18% for individuals and families, while corporate taxes collected are expected to drop by as much as 29%. Consumption-based revenue sources are expected to partially offset these declines.Oregon's economy has been doing better than expected. State revenues exceeded forecasts by more than 2% from 2021 to 2023, meaning that there will likely be around $5.5 billion in kicker rebates going back to taxpayers in 2024. Public education will be the primary recipient of these corporate kicker funds.
Increases in inflation and interest rates are the two primary reasons why Oregon may see a recession in 2024. Long-term inflation could increase state revenues if current trends continue, assuming no changes to tax laws or rates.
Staffing Industry Trends and Projections
The staffing industry is poised for continued growth and opportunity in the US market according to a recent report from PGC Group. The industry reached a record high of $218.8 billion in revenue in 2022, with temporary staffing making up the large majority at $195.5 billion. This represents a 17% increase over 2021, outpacing expectations.IT temporary staffing led growth at 16%, followed by finance and accounting at 12%. Life sciences also saw a sizable 20% jump. Demand is being driven by talent shortages and use of contingent workers. An estimated 14.1 million people did temporary or contract work through staffing firms in 2021.
Looking ahead, the industry is projected to see more moderate single-digit growth after the rapid pandemic recovery period. Revenue is forecast to reach $211.8 billion in 2023, and $216.9 billion in 2024. IT, finance, and engineering roles are expected to remain in high demand.
For staffing firms, areas of opportunity include investing in technology to improve recruiting, being flexible on location, focusing on high-demand roles, and strengthening client and candidate relationships. Energy and life sciences are growing sectors to explore. With proper strategy, the staffing industry still presents a large opportunity for expansion and revenue growth in 2023-2024.
