Tuesday, April 8, 2008
The Housing Slump and Oregon's Economy
I was on OPB a couple of months ago talking about the Oregon economy and if our housing market insulates us from the national downturn. My response was that the market for what Oregon makes is national and, especially in timber and wood-products, the national downturn in the housing market could hit Oregon particularly hard. So the fact that locals might not lose their shirts from house prices dropping does not mean we are insulated, though it does help.
Now there is an excellent example of the economic effects of the housing slump on Oregon from the History Channel series "Ax Men" to which I have become quickly addicted. The series profiles and follows four Oregon Logging Crews, filming them doing their business in the coast mountains of NW Oregon. In the last two installments of the show (filmed last fall and winter), the effect of the housing slump hits these crews hard and you can see the immediate impact of the slowdown in housing starts on the Oregon crews. A nice, and painful, lesson in economics. The fact is that there is very little about the state economy that is disconnected from national and international forces.
I highly recommend the series, it is quite fascinating. It is also a good lesson in modern logging, something I got firsthand from a grad school buddy who grew up outside Aberdeen, Washington and whose father ran a logging company. Somehow he decided being an automotive engineer was more for him than being a logger. I don't think his father minded at all.