The coronavirus pandemic brought Oregon a sudden economic catastrophe in March, the sharpest downturn in the state’s history and its highest jobless rate on record, nearly 15%.
Government-mandated shutdowns demolished many Oregon institutions, among them restaurants, hotels and gyms. Scores of small businesses struggled to stay afloat while more than 600,000 Oregonians sought jobless benefits.
That triggered a fiasco at the state employment department, which had put off a desperately needed technology upgrade for more than a decade, and as a result was unable to meet the needs of many newly jobless Oregonians until fall.
After mandating that certain businesses close in March, Gov. Kate Brown announced a two-week freeze in November as coronavirus cases soared, shuttering some businesses for a second time just as they were trying to regain their footing. That led to a spike in new unemployment claims.
Intel, Oregon’s largest corporate employer, suffered an astonishing technology lapse unrelated to the pandemic. The company shocked investors in July when it announced that its Hillsboro research factory is a year behind schedule developing the next generation of its computer chip – the latest in a string of setbacks for the company’s technology.
As Intel slid behind its rivals in the race for the most sophisticated chips, the company said it would consider outsourcing its advanced production to rivals in Asia.
Higher-income Oregonians generally fared OK, though. That helped explain why state tax revenues kept growing in 2020, almost as if the pandemic never happened.
Some industries did more than well – online retailers, home improvement stores and grocers among them. Certain businesses, including bike shops, hardware stores and garden centers, were never forced to close under the state’s health restrictions, which allowed them to capitalize on an increase in demand.
Nike’s stock soared to a record high as the company moved to take ownership of its retail channels, even as the company announced that it would eliminate 700 jobs at its headquarters near Beaverton as part of a broader restructuring.
Here’s a look back at how the pandemic played out economically in Oregon, with a survey of sectors that thrived and others that struggled during the state’s unprecedented downturn.
Thriving
Online shopping and deliveries: The pandemic has been awful for toy shops, boutiques and other places where people love to browse and buy. It’s been terrific for online retailers, especially Amazon. The company has hired 400,000 worldwide this year, and its stock is up 80% since the beginning of March. In Oregon, transportation and warehouse jobs are up 7% in the past year, even as overall Oregon employment has dropped sharply.
Grocers: Consumer spending fell off a cliff in March and April as Oregonians retreated in the face of the coronavirus onslaught. Total spending fell by more than a third. And it has dipped again in recent weeks amid a renewed outbreak. One sector, though, has been thriving all along – grocers. Oregon supermarket sales spiked more than 65% in April, according to Opportunity Insights, a Harvard-based research team. Sales remained up 38% in early December. Since Oregonians cannot go to restaurants, and many other places we like to spend money are similarly unavailable, we’re stocking up on food and cooking more at home.
Exercise equipment companies: Gyms have struggled to stay afloat amid the coronavirus pandemic as public health restrictions have forced them to close or greatly limit capacity, and customers have become wary of exercising indoors, in public spaces. Instead, consumers have turned to home fitness products and bicycles to get their exercise fix. Sales of bikes, equipment and repair services exploded after the start of the coronavirus pandemic and were up more than 60% in June, according to the NPD Group, a market research company. However, local retailers have struggled to get in enough bikes to meet the demand. Home fitness product sellers have seen sales explode as well. After having its worst year in 2019, Vancouver-based Nautilus enjoyed a huge 152% increase in sales in its third quarter.
Home improvement and garden stores: While many retailers were forced to close in March, Gov. Kate Brown allowed garden, hardware and home improvement stores to stay open. Those stores saw an immediate uptick in demand as interest in home improvement projects skyrocketed with more people staying home. Sales at those stores are up 13.4% this year as compared to 2019, according to the Commerce Department. Bret Brantner, owner of Mr. Plywood, a hardware and lumber store in Southeast Portland said in May that his store was as busy as ever, and he often had a line of people waiting outside to get in as the store limited capacity for safety reasons.
Hardest Hit
Aviation: Passenger volumes at Portland International Airport plunged 95% in April, the first full month of the pandemic, as air travel ground to a near complete halt. Planes that did fly were largely empty, devastating the airline industry. Travel picked up steadily as the year went on but remained down two-thirds from a year ago. The fallout extended across industries, with Boeing and Portland-based industrial manufacturer Precision Castparts cutting 40% of its jobs worldwide as orders for new aircraft evaporated.
Restaurants: Oregon’s restaurant sector laid-off two thirds of its workers last spring in the first days of the pandemic, 47,000 people altogether. Many of those jobs returned over the summer as outdoor dining picked up, only to vanish again as the state ordered an end to most dine-in service amid a resurgent coronavirus. Many of Portland’s best-known restaurants, among them Beast, Toro Bravo and Pok Pok, are closed for good. Scores of others closed, too, from beloved neighborhood haunts like the Cheese Bar on Mount Tabor to popular food carts. The city’s renowned dining scene has been profoundly diminished – and it could be years before it rebounds.
Hotels: Hotel demand in Oregon plummeted in the early weeks of the pandemic as occupancy rates fell by 67% in the first week of April as compared to the same week in 2019, according to Travel Oregon. The sharp decline forced some hotels to close temporarily or lay off the majority of their staff. Oregon’s lodging sector has shed 8,600 jobs in the past year, with total employment plummeting by one-third. While demand picked up on the coast and in central Oregon during the summer, Portland’s hotel sector struggled throughout the year. In October, hotel revenue in Portland was down nearly 76% as compared to the same month last year, while hotel revenue in Portland’s central city, where seven hotels still remained closed, was down nearly 84%, according to Travel Portland. The drop in hotel revenue could have serious implications for cities across the state, which derive general fund money from lodging taxes.
Live events: Large venues were forced to shutter in March as large gatherings, including concerts, festivals, sporting events and conventions, were cancelled due to public health restrictions. Roughly 40 events per month take place in a typical year at the Oregon Convention Center alone, but none have occurred since March, which has led to the cancellation of more than 160,000 group room nights in Portland this year, according to Travel Portland. Large events will likely be the last to resume once public health restrictions begin to ease as well. The shutdown has been devasting for the thousands of people who work behind the scenes to help put on live events. In a September survey of nearly 1,000 business owners conducted by the Live Events Industry of Oregon, which advocates for the industry, nearly 70% of respondents said they were worried their business wouldn’t survive past January.
Boutiques/retail: U.S. retail sales plunged a record 16% in April as stay-at-home orders and public health restrictions forced many stores to close and prompted consumers to turn to online shopping, according to the Commerce Department. Retails sales rebounded somewhat in the summer, but rose a disappointing 0.3% in October, the slowest retail sales growth since the spring, leading to concerns that retailers could struggle during the vital holiday shopping season. While some types of retailers have fared better than others, more than half of 60 small businesses surveyed in September by Bricks Need Mortar, which advocates for independent Portland retailers, reported that their sales were down 50% to 90% compared to the same time last year. Downtown Portland retailers have faced unique challenges with a lack of office and tourist traffic and ongoing protests, which have given the city a reputation for upheaval and led to a spike in vandalism and destruction, often committed by a small group of people.
-- Jamie Goldberg | jgoldberg@oregonian.com | @jamiebgoldberg
-- Mike Rogoway | twitter: @rogoway | 503-294-7699