OBI Releases 2024 State of Oregon Manufacturing Report

The OBI Research & Education Foundation has released a 2024 analysis of Oregon’s critical manufacturing sector. Prepared by ECOnorthwest, the report describes a number of worrisome trends that have developed since the publication of OBI’s previous manufacturing report in 2021.

Three years ago, ECOnorthwest found that Oregon’s manufacturing sector punched above its weight compared to other industry sectors in Oregon and to manufacturing in other states. In Oregon, the average wage earned by manufacturing employees significantly exceeded wages earned by employees in other sectors. Over the long term, meanwhile, Oregon had gained manufacturing jobs even as those jobs declined in the rest of the country.

Manufacturing is a particularly important sector, as it brings dollars into the state through the production of exports. As noted on OBI’s Economic Competitiveness website, the per-capita value of Oregon’s exports was the nation’s third highest in 2022, and the total value of the state’s exports was the nation’s 17th highest.

Unfortunately, Oregon’s manufacturing sector has weakened significantly compared to the rest of the country since 2021. Worrisome trends include:

• From 2021-2023, Oregon’s manufacturing growth fell behind the national average during an economic upswing.
• Between June 2023 and June 2024, Oregon ranked 45th nationally in manufacturing growth.
• Oregon’s economic problems extend beyond manufacturing. Oregon ranks among the bottom 10 states for job growth in several sectors, including construction and professional and business services.

Despite such problems, ECOnorthwest found, Oregon’s manufacturing sector is experiencing some positive trends and remains strong in many areas, including:

• Oregon’s wood products industries faced a six-decade low in the 1990s but are rebounding thanks to mass timber.
• Workers in Oregon’s high-tech/electronics and wood products industries are among the nation’s most productive.
• Manufacturing jobs in Oregon continue to carry a significant wage premium.

The importance of Oregon’s manufacturing sector and its recent struggles should be a wake-up call for state policymakers, who must address several problems that have eroded Oregon’s competitiveness. These include the scarcity of developable land, the state’s tax environment and the expense of living here. The need to address such problems was identified by the Oregon Semiconductor Competitiveness Task Force in 2022 and, more recently, by the Oregon Clean Technology Task Force. OBI will look for ways to strengthen its manufacturing sector and restore Oregon’s competitiveness as it develops its agenda for the 2025 legislative session.

Strengthening Oregon’s manufacturing sector would generate big dividends. A 10% increase in Oregon’s manufacturing output would add $7 billion to the state’s gross domestic product, support nearly 51,000 new jobs and generate an additional $4.2 billion in personal income. This would produce more than $850 million in new state and local revenue.