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Thin diet weakens Oregon economy From staff and wire reports Oregon's economy, which grew plump on a diet of high-tech expansion, is getting thinner fast as the sector lays off workers by the hundreds. That may not change soon. Economists say the state is feeling the downturn more severely than many other parts of the nation. Job counts in the Rogue Valley and statewide in recent months have been consistently down from a year earlier, the first time the state has experienced job contractions since a brief dip in 1991. The July unemployment rate was 6 percent, the highest in four years. Jackson County's jobless rate in July was 6.3 percent, up from 5.3 percent the previous year. But the Rogue Valley economy has been buoyed somewhat by the influx of new residents boosting service and retail employment, according to recent comments by Guy Tauer, a labor market analyst for the Oregon Employment Department in Medford. Oregon's economy has long been more volatile than that of the nation as a whole, said Randy Pozdena, managing director at the Portland office of ECONorthwest, an economics consulting firm. "The (national) economy hiccups and we belch," Pozdena said. But state economist Tom Potiowsky on Friday said he isn't ready to formally declare the state in a recession, instead saying "our slowdown has been somewhat more severe" than the nation's. Whether Oregon is technically in a recession - formally defined as at least six months of contraction in economic output - is difficult to say because Oregon doesn't collect economic output data. The best data Oregon has to go by is employment, and there the outlook has quickly turned from rosy to bleak. From the second quarter of 2000 to the second quarter of this year, Oregon's non-farm employment tally dropped 0.4 percent. For the second quarter of this year, job contraction is at an annualized 3.5 percent, Potiowsky said. Portland economist Bill Conerly said he's confident that by any measure Oregon is in a recession. "Oregon is different in that Oregon is clearly in a recession," Conerly said. "We're seeing the downturn spread outside of manufacturing into other sectors of the economy wholesale and retail trade, services." Concrete proof of this spread isn't yet evident in the Rogue Valley, but may show in August's jobless statistics due in a couple of weeks. How quickly worldwide consumption of high-tech equipment will resume and how quickly Oregon high-tech firms will start posting "Help Wanted" signs is hard to predict, economists said. Pozdena said he expects a "nice bounce" in the national economy by the middle or end of next year. "Once the nation turns around, that's going to jump-start the (computer) chip business and home building, and Oregon's not far behind that process," Pozdena said. Potiowsky said Oregon's manufacturing sector should start to improve next year after losing 2.6 percent of its jobs this year. But even by 2003, the number of manufacturing jobs in the state will be below the average number this year, he cautioned. The state's economic weakness is as evident in Lane County as it is anywhere. The county's jobless rate in July rose to 6.4 percent, compared to 5.2 percent a year earlier. In July, the county had 22,500 manufacturing jobs, down 1,300 from a year earlier. Those numbers are likely to worsen in coming months as recent local layoffs are figured into the data. Rosen Products last week laid off 50 workers at its west Eugene flat-panel screen factory. Hynix earlier this summer idled its west Eugene computer chip plant for a retooling, laying off 600 of its 850 workers; Vivendi this summer shut its Dynamix software studio in Eugene, idling all 97 workers; and earlier this year, Komag Inc. shut its Eugene hard-drive disk factory, laying off all 350 workers. The local losses haven't been confined to high tech. This summer, Weyerhaeuser Co. laid off 120 at its Springfield linerboard mill, citing sluggish nationwide demand for paper products. Potiowsky said several factors are in place to help the state and nation recover: this year's federal tax rebate checks and cuts in federal tax rates, continued interest rate cuts by the Federal Reserve, and lower-than-expected electricity rate hikes. However, should the stock market plummet, energy prices shoot skyward or consumers and businesses hunker down and refuse to spend money, the economy could plunge into a deep recession, he warned. Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.