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However, the construction industry is facing mixed forecasts for coming years.

PMG FILE PHOTO - Despite the complications brought on by the COVID-19 pandemic, construction was still one of Oregons fastest-growing industries.What a difference a year can make. A snapshot of Oregon's construction industry in October 2019 shows a booming market with a record number of jobs, employing an average of 108,000 people during the 12 months leading up to then. The industry had rebounded steadily and rapidly following a prolonged slump from 2009-2012.

Residential building permits for single-family and multi-family homes climbed to 1,700 per month, a near tripling since 2011. According to the Oregon Employment Department, commercial and industrial construction continued surging ahead, with some health and safety adjustments due to the COVID-19 pandemic, well into the middle of this year.

Yet the indications for what lies ahead for the state's construction market look like a mixed bag. The U.S. Bureau of Labor Statistics reports that Oregon had more than 108,000 construction jobs in January, fell to just under 100,000 in April, reached about 107,000 in August, and decreased to 104,700 in September, the most recent figure available and a preliminary one at this point.

In a report released Sept. 23, Oregon's Office of Economic Analysis stated that the industry could get a boost from the economic impacts of 2,000 housing starts over the next 24 months as communities rebuild from the historic wildfires that destroyed more than 4,000 homes across the state.

"These starts support just over 2,100 additional jobs, mostly in construction, on an annualized basis," the report states. "One consideration is the overall capacity of Oregon's construction industry. How large of a net increase in building activity the state sees, versus a reallocation of industry capacity to the impacted regions and away from the less impacted areas, remains to be seen."

The report also notes that construction repairs of homes and other buildings damaged by the wildfires could help the industry gain more jobs and have a larger economic impact. However, the likely potential for rising timber costs due to the loss of forestland could counter those gains.

The most recent Architecture Billings Index (ABI) reported by the American Institute of Architects on Oct. 21 shows a slight improvement in architects' business conditions, which directly impacts the construction industry. A score below 50 indicates a decline in firm billings, and the ABI fell to 40 in August. It rose to 47 in September, which still shows an overall decrease in revenue for architecture firms, but also shows that the pace of decline has slowed significantly.

Inquiries into new projects during September grew for the second time since February, with a score of 57.2 compared to 51.6 in August. According to the ABI, the value of new design contracts moderated to a score of 48.9 in September from 46 the previous month.

"Despite the multifamily residential sector showing signs of improvement, overall business conditions are recovering at a disappointingly slow pace," said AIA Chief Economist Kermit Baker, Hon. AIA, Ph.D. "Other sectors may begin to stabilize in the coming months, but across-the-board improvement shouldn't be expected until the economic impact of the pandemic subsides significantly."

Oregon's Employment Department on Oct. 1 released its projections for the construction industry's job growth through 2029. Noting that construction is the state's third-fastest growing industry, the department said it is expected to add 11,900 jobs and grow by 11 percent over the next decade.

Demand for construction will be driven by population and economic growth, low residential vacancy rates and associated rising prices. Residential building construction is expected to increase by 14 percent, adding 2,600 jobs. Nonresidential building construction should increase by 12 percent, adding 1,400 jobs.

Building equipment contractors are projected to add 3,400 jobs, a gain of 11 percent. This includes contractors for plumbing, heating, air conditioning, electrical and other wiring installations. Building finishing contractors, which includes contractors for drywall and insulation, flooring and finish carpentry, are projected to add 1,300 jobs, an 8 percent increase.

According to the Oregon Employment Department, construction, health care, and professional and business services will account for nearly half of all new jobs in the state over the next decade. It cautioned that its projections are long-term and intended to capture the economy's structural change and not cyclical fluctuations such as the impacts of the COVID-19 recession and its recovery.


Melody Finnemore (This email address is being protected from spambots. You need JavaScript enabled to view it.) is a contract writer who regularly contributes to the Business Tribune.


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