Oregon Office of Economic Analysis

Last week Portland State University’s Population Research Center released their initial estimates for 2021 population in Oregon. The release seems to have flown under the radar a bit, and it really shouldn’t. Our office tried to incorporate it the best we could in our forecast release, but with given the Tuesday data release and Wednesday forecast release, that proved challenging as well. We will continue to explore the numbers and their implications in the months ahead. Big picture, population growth is vital to Oregon’s faster economic growth as it helps provide the labor force needed for local businesses to hire and expand.

The upshot for the new release is there has been no pandemic-related migration boom in Oregon. That runs counter to the conventional wisdom, and certainly counter to many housing market discussions. This has been something Kanhaiya Vaidya, the state demographer in our office, has been on top of since the start of the pandemic. His population forecast called for slower population gains last year and this year, with migration rebounding in 2022 and beyond.

The primary reason for slower gains is that migration is pro-cyclical. As job opportunities dry up in recessions, migration slows and as jobs become more plentiful in expansion, migration accelerates. To the extent there as been any real pandemic-related migration, it has not been large enough to offset these traditional dynamics.

Now, PSU’s estimates are mid-year, or July 1st estimates. Given the economy and labor demand is booming today, expectations are migration is also picking up. This is confirmed by things like more surrendered driver licenses at the DMV in recent months.

The other contributing factor to slower population gains, as discussed before, is that deaths now outnumber births in Oregon for the first time. The state is fully reliant upon net migration for any population gains today, and our office expects this to continue every year into the future as well.

Two notes on pandemic-related migration. First, much of the discussion in the past year or so has been based on anecdotes, or online home search patterns and the like. We have lacked any hard data to really have a discussion. That has changed now.

Second, only 1 in 3 workers can theoretically work from home due to the nature of their jobs. That means 2 in 3 need to physically be somewhere to build homes, give care, cook meals, and so forth. Some basic math shows that it’s really only a small slice of the overall population we are talking about, and even smaller for purely remote work and not a hybrid model of a couple days at home and a couple in the office.

A very important technical note: Portland State released revised 2020 and preliminary 2021 estimates. The next step is to go back to revise the 2011-2019 estimates to make sure they align with the 2010 and 2020 decennial Census data. These so-called intercensal years (2011-19) have not yet been revised at the county level. That process takes time. Thankfully, Kanhaiya has done so for statewide figures, which can be found in our forecast tables. This matters for helping put the 2021 growth rates in perspective. At the local level we cannot really do this quite yet.

Even so, the estimates indicate that 30 out of Oregon’s 36 counties saw population growth in the past year. The fastest growing counties were Morrow (3.4%), Crook (2.5%), Gilliam (2.2%), and Deschutes (2.1%).

At the regional level every region in the state added residents, except the Gorge where slight estimated population declines in both Hood River and Wasco offset the gains elsewhere. Overall the Gorge is estimated to have lost 40 residents, which for all intents and purposes is a stable population, albeit one with a negative sign in front.

Due to the strong gains in Crook, Deschutes, and Jefferson (1.4%), the East Cascades region once again led overall population growth. Now, if there were any pandemic-related migration booms in the state, Central Oregon is the place the data indicate it did occur. Even so, growth rates do not look to have accelerated so much as did not slow down as much like elsewhere across the state. This should come into focus more clearly once the county intercensal estimates are available, so we can get a better handle on the the past handful of years overall.

All three counties in the North Coast Region – Clatsop, Lincoln, Tillamook – grew at above-average rates last year. Given the employment strength seen in both the Rogue and Willamette Valley regions of the state, the slower population gains are somewhat of a surprise. It is likely that lack of in-person schooling impacted Benton (Corvallis) and Lane (Eugene), as both counties saw small population losses. Much of rural eastern and southwestern regions of the state saw population gains that were slightly slower than the statewide average.

Finally, the Portland region grew slightly faster than the rest of the state. These gains were a bit stronger in Clackamas and Washington, while Multnomah’s growth was 0.003% slower than the statewide average. While more people moved into the state, region, and city than moved out, it is here, among the relative patterns that we can monitor any potential shifts in household preferences for urban vs suburban living moving forward.

Bottom Line: Total population is a driver for overall economic activity as more households create local demand for housing, food, entertainment, and the like. More households earn more money, boosting public sector tax collections alongside increasing local business revenue. Working-age population is the key for local economic growth as it provides the labor force from which local businesses can hire and expand. Population growth tends to be pro-cyclical. As we are now in an inflationary economic boom, expectations are migration flows will return in the years ahead.

Happy Thanksgiving everyone!