Oregon’s economy is trailing behind national averages in job creation, manufacturing output, and overall economic performance. Key structural challenges such as underperforming public education, soaring housing prices, and a shrinking population are contributing to a troubling outlook. Economist John Tapogna from ECONorthwest emphasized that the state now confronts a pivotal decision: pursue intentional, moderate growth or risk prolonged economic stagnation.
Speaking at the Eugene Chamber of Commerce’s economic summit on November 13, Tapogna highlighted that Oregon’s nonfarm payroll growth since the Great Recession has consistently fallen short of the U.S. average—a deviation from the state’s historical pattern of strong recovery after downturns. Manufacturing activity also lags behind national trends, signaling a broader economic slowdown across multiple sectors.
Among the obstacles are declining K-12 educational outcomes, rising housing costs that outpace income growth, and high personal tax rates that reduce disposable income. Demographic trends are equally concerning: while the U.S. is projected to reach a point where deaths exceed births by 2032, Oregon crossed that threshold in 2020. Projections from 2019 estimated 4.7 million residents by 2028, but updated forecasts from May 2025 now suggest only 4.4 million, a drop of 300,000 people.
Tapogna likened this population decline to forfeiting potential innovation, stating that each person lost represents a missed opportunity for future breakthroughs. He warned that shrinking populations can trigger cycles of depressed growth—marked by reduced migration, labor shortages, stagnant tax revenues, and declining public services. Portland exemplifies this trend, where a recent ballot measure sought a 75% increase in park funding just to maintain existing service levels, with no improvements proposed.
Despite these challenges, Tapogna pointed to strengths that could support revitalization. Oregon’s natural environment, legacy of innovation—including Eugene as the birthplace of Nike—and growing clean energy resources offer a foundation for deliberate development. He stressed that the choice is not whether to grow, but whether to adapt proactively. “The question,” he said, “is not whether we can afford to change, but whether we can afford not to.”
Local leaders like Eugene Mayor Kaarin Knudson and University of Oregon President Karl Scholz expressed optimism, emphasizing collaboration between city and university to drive progress. Initiatives such as adding 1,000 new downtown housing units within five years and fostering a culture of innovation reflect a commitment to intentional advancement. Scholz cautioned against complacency, urging the region to aim higher even when current conditions seem acceptable.
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Will Oregon stagnate or grow with intention? Economist issues bleak forecast
Oregon’s economy is lagging behind the rest of the U.S. in job growth, manufacturing, and other key benchmarks. n nThe state faces several challenges, including poor K-12 school performance, high housing costs, and a declining population. n nEconomist John Tapogna warns that Oregon’s choice is between pursuing modest growth or facing economic stagnation. n nEconomist John Tapogna focused on Oregon’s choice: Grow modestly or don’t grow at all. In the room of around 200 business professionals, the options elicited the uneasy creaks of chairs. n nNobody has a crystal ball, but data trends used to give analysts a glimpse into Oregon’s economic future aren’t indicating positive outcomes on the horizon. n nTapogna, a senior policy advisor at ECONorthwest, focuses on economic development, housing, workforce, education and social policy. Tapogna said Oregon has fallen off pace with benchmarks used in the U.S. to determine how the economy is faring. n nTapogna presented a keynote at the Eugene Chamber of Commerce’s economic summit Nov. 13, giving insights into the state’s economic outlook. n nOregon’s economy is dragging n nTapogna said total nonfarm payroll in the state since the Great Recession hasn’t kept up with the rest of the nation, a trend he called unusual for Eugene and Oregon as a whole. n n“Typically, our pattern has been we fall harder in recessions and we make it up in expansions and that hasn’t happened this time and that is unusual,” Tapogna said, adding manufacturing rates in Oregon are also not tracking with the rest of the United States. “Across all of our domains, we are falling off the U.S. pace.” n nTapogna shared a list of headwinds the state faces in its pursuit of robust economic growth. Nonfarm payroll rates are off pace with the rest of the nation. Oregon’s K-12 schools are some of the poorest performing in the U.S. Housing costs rise but household incomes aren’t keeping up and high personal income taxes drain wallets. Tapogna said while the U.S. as a whole is trending to have deaths outpace births by 2032, Oregon crossed that threshold in 2020. n n“Some commentators are looking out at the Trump administration’s actions on immigration this year and saying, ‘You know what? We may actually go negative this year,’’’ Tapogna said. “They are going to potentially move so many people out of the country this year that the U.S. population could fall for the first time in history this year.” n nStatewide population outlooks from December 2019 predicted that by 2028, there would be around 4.7 million Oregonians. More recent projections from May 2025 indicate about 4.4 million people will reside in Oregon by 2028. Tapogna said he knows some people look at the population reduction and applaud, but to him, the projection feels like giving up. n n“I would argue that we have given up on 300,000 lottery tickets and that you don’t know who’s going to come in and invent the next cool thing that’s going to go global,” Tapogna said. “You have given up on a lot of talent.” n nPopulation decline can push communities toward cycles of depressed growth. Tapogna said natural population growth brings positive net migration, making economies vibrant, bringing impactful public investment and improving community well-being. Depressed growth cycles see slowing birth rates, negative net migration, labor market challenges and revenue stagnation, reducing community well-being. He said to see a depressed growth cycle in action, look no further than Portland. n n“At this last election, the City of Portland came forward with a ballot measure to fund the parks and increase the parks levy by 75% and they offered nothing new. They simply said, ‘We have to increase this levy by 75% simply to give you what you already have,’” Tapogna said. “That is a cycle of depressed growth and if Portland continues to do that process, sort of budget cycle after budget cycle, eventually, services will decline because people aren’t voting for more money to simply get what they have been used to.” n nWhat seemed like interminable growth in the state decades ago is no longer and Tapogna said the anti-sprawl era has come to an end. n n“Now, the choice facing Oregon is stark: pursue modest, deliberate economic growth or accept the cost of standing still,” Tapogna said. “In today’s slow-growing U.S., unmanaged rapid growth is no longer our threat. Stagnation is.” n nHow Eugene and the University of Oregon support Eugene’s growth n nKaarin Knudson, mayor of Eugene, and Karl Scholz, president of the University of Oregon, discussed their shared vision for local growth. n nKnudson said her role lends itself toward interacting with the unique DNA of Eugene in all the conversations she has as mayor. n n“There is a pattern and a belief and a habit all across our community, that presents itself in ways large and small, that simply comes back to a desire to do things different and better and honestly, just like a certainty that we will,” Knudson said. n nShe said she and Scholz were both athletes. Knudson is a two-time NCAA All-American runner and Scholz, a former basketball player. She said athletes are well-suited for seeing space, accelerating into it and seizing opportunities. Architects, Knudson said, referencing her profession, are also skilled at observing situations, interpreting elements and intervening meaningfully with limited time and resources. n nKnudson said these talents make the City and UO skilled collaborators. To complete projects, like the goal to add 1,000 new housing units in Eugene’s downtown in the next 5 years, Knudson said, partners have to show up and perform their best. Tools available to the city, like financial incentives, make her feel positively about Eugene’s outlook. n n“Certainly, I am optimistic and not in the passive sense,” Knudson said. “Optimism is a muscular type of hope. It is a way of engaging with the day very intentionally and with people very intentionally.” n nScholz said the University’s ability to attract top talent is a positive, but the efforts to improve can’t stop there. He said one challenge is how the “attitude that it’s good enough,” is keeping the region from reaching its full potential. Scholz encouraged continuing to strive for greatness even when what exists now is acceptable. n n“It’s a spectacular place. It’s not good enough. We can be better,” Scholz said. “Trying to overcome the, ‘It’s good enough,’ and thinking about what the potential is and then being willing to take some sensible but big swings to advance what we all want to see.” n nStrengths to lean into for a strong future n nWhile Tapogna’s economic outlook was bleak, he said Oregon’s strengths can support a more vibrant economy in the coming years. n nTapogna said Oregon’s natural beauty grows talent that should be able to find good jobs wherever they want to live in their home state. He said the region has the capacity for greater urban growth without fear of California-esque sprawl. Oregon’s legacy of innovation and Eugene’s title as the birthplace of Nike lay a foundation for building what’s next and clean energy resources provide opportunities for a low-carbon economy. n nAll these strengths offer space for deliberate and moderate growth, Tapogna said. n n“The future has never looked less like the past than it does right now. If we fail to adapt, we risk locking ourselves into a future of stagnation, scarcity and decline, but this is still a choice,” Tapogna said. “We can choose to modernize, grow deliberately and build a state that remains vibrant and full of possibility. The question shouldn’t be whether we can afford to change, but whether we can afford not to.”