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Oregon job growth falls behind nation's The Associated Press PORTLAND -- For the first time since 1985, Oregon job growth is trailing the national average, another sign the Asian economic crisis has hit the state especially hard. The number of jobs grew by 2 percent in Oregon in 1998, compared with a U.S. growth rate of 2.6 percent, according to a report released Tuesday by the Oregon Employment Department. Economists and business executives have been warning about a slowdown for more than a year, through postings of monthly employment data and announcements of industry cutbacks. The annual report provided more evidence. "We knew the vulnerability was there," said John Mitchell, regional economist for U.S. Bancorp. "Now we've seen it translate into reality." Oregon's economy relies more heavily on exports to Japan and other Asian countries than most states. Wood products companies, high-technology manufacturers and agricultural producers are significant elements of Oregon's economy, and all suffered from a dramatic decrease in overseas demand. "Asia's impact was obviously felt more than we initially had thought," said Sara Gates, an economist with the state Office of Economic Analysis. State economists watch national trends closely and generally expect Oregon's economy to follow U.S. patterns of good times and bad. But now the gap is confusing forecasters and prompting them to question this year's growth projections. The state uses the figures to develop a revenue forecast, on which the Legislature bases its budget. "Obviously, we've got conflicting indicators," said Paul Warner, who headed the Office of Economic Analysis before taking a job with the state Legislative Revenue Office this month. A forecast released in late November 1998 by the Office of Economic Analysis pegged job growth for this year at 1.4 percent, the narrowest expansion since the brief recession of 1990-91. Warner would not say whether the just-released employment report would prompt economists to change the 1999 estimate or whether any revisions would show up in an updated forecast due Feb. 26. But Ham Nguyen, a member of a group of economists who help draft the forecasts, said the estimate might go up to about 2 percent and again outpace the nation, which is not expected to do as well. "In the long run, our consensus is that we'll do better than the nation as a whole," Nguyen said. Despite the slowdown, manufacturers added 1,100 jobs during 1998 for a slight annual increase of 0.5 percent. High-tech manufacturers, which had been in the news with announcements of cutbacks and layoffs, actually added 1,500 jobs, up 2.8 percent. The losers among manufacturers were lumber and wood products, which dropped 1,700 jobs for the year, and food processors, which shed 700 jobs. Service-related businesses posted the strongest gains of any industry group, climbing by 14,000 jobs, or 3.5 percent. Construction, retail trade and finance, insurance and real estate were among the businesses that lagged the economy as a whole, recording gains of 1.2 percent, 1.4 percent and 0.4 percent respectively. Today's Business Index Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA