Along with the rest of the nation, the Oregon economy took a roller-coaster ride through 1980, and 1981 may see some extra loops. The state's economy started the new year on a wobbly note. The decline in national housing starts is dragging Oregon's major industry, lumber and wood products, back to recession levels, says Dr. Kevin Kelly, vice-president in the economics department of U.S. Bancorp.
"Many of Oregon's other industries may face a better year, but the gains through June will be so modest as to be overwhelmed by our lumber and wood products and construction problems," Dr. Kelly predicts.
There's considerably more hope for the second half of 1981, though. With slightly better mortgage rates and more confident consumers, all sectors of the economy should rise, he says. "While the recovery should be more universal, a still high interest rate environment will keep it slower than previous comebacks."
Longer term, Oregon's economic growth will "dramatically" exceed that of the nation through the year 2000, Dr. Kelly notes, citing latest US Department of Commerce forecasts. Among the states, Oregon is ranked eighth in personal income growth and sixth in employment growth.
Helping to strengthen the state's economy is the rapid growth of international trade, showing a potential expected to accelerate. Dr. Kelly says major trading partners should play a larger international role in the not-too-distant future.
"The growth of our trading partners will tend to produce a 'straightforward' projection of our international growth," he says.
Foremost among them are China and coal. Oregon products, especially agricultural goods, should be primary beneficiaries of the opening of China. "The long-term potential of Chinese trade is difficult to assess, but exports of wheat offer an immediate, concrete effect," Dr. Kelly says.
Last month, the Rong Cheng called at the Port of Portland to unload a variety of Chinese products and left with Pacific Northwest wheat. The China Ocean Shipping Company picked the Port of Portland as its first American port of call since restoration of relations between the United States and China.
Dr. Kelly points out the next 20 years should produce a big increase in US coal exports. There are large coal reserves in the Far West, and the Columbia River Gorge is an ideal trade route through the Cascade Mountains. "All Northwest ports will likely participate in this newfound trade," he says.
The market for Oregon forest products is shifting toward the Western states and toward export. "These Western states are forecast to outpace the nation, so the market for Oregon lumber and wood products should hold up fairly well," Dr. Kelly says.
The supply side is more difficult to predict, but President Reagan's call for improved utilization of America's resources holds the promise of more liberalized timber cutting policies. The economist calls that a necessity to improve Oregon's competitive position vis-a-vis Southern US and Canadian producers.
He says the export market for Oregon forest products will encourage the long-term growth and stability of that major industry. As China modernizes and industrializes its economy, more and more products will be produced, packaged, and transported. And a developing Chinese economy will draw on Pacific Northwest pulp an d paper producers, among others.