Economic Data

Outmigration remains concerning, though it has slowed in Multnomah and Washington counties. Among the four metro-area counties, Washington County is the only one with a noteworthy natural population increase (i.e., births outnumbering deaths). Clackamas County has experienced almost no growth in recent years, while Clark County continues to lead the region in population growth. Multnomah County relies heavily on international migration, indicating that its near-term population growth depends on attracting people from abroad. See Figure 1.

Until about a decade ago, the region could count on natural population growth (i.e., births outnumbering deaths) adding more than 10,000 residents per year. The annual change began falling in 2008 and accelerated after 2016. It’s a national phenomenon driven by an aging population and declining fertility rates. Looking ahead, the Portland region will increasingly rely on in-migration to grow. See Figure 2.

Historically, the Portland region has outpaced the nation in job growth during economic expansions but has also shed jobs more quickly during recessions. Recently, this trend has reversed. In 2023, the region trailed national job growth, and by 2024, it was either losing jobs (according to the Bureau of Labor Statistics) or showing negligible growth (per the Oregon Employment Department), while the rest of the country continued to expand. Regardless of the data source, this is a troubling shift that demands closer scrutiny and a renewed sense of urgency. See Figure 3.

Job growth across the region mirrors population trends. Clark County leads in adding jobs, while Clackamas and Washington counties remain near their pre-pandemic levels. Multnomah County lags behind, still falling short of its pre-pandemic job numbers and experiencing decline compared to 2023. See Figure 4.

Over the past year, local sector employment grew while traded sector employment declined—a critical shift with economic implications. Traded sector jobs, which sell goods and services outside the region, bring in new money, while local sector jobs, typically lower-paying, recirculate money within the local economy. The information sector and financial activities sector saw the steepest declines in 2024, dropping 4.9% and 3.7% respectively between December 2023 and December 2024. This contrasts with the modest 0.1% decline in the financial services sector from the previous year. Private education and health services led job growth, adding 15,200 positions—a 7.7% increase that surpassed the 4.9% growth seen from 2022 to 2023. Most of these gains came from health services. Government employment, which had grown by 5.1% in the 2022–2023 period, slowed to a modest 2.2% increase in 2024. See Figure 5.

The flow of people in and out of communities reveals shifts in income dynamics and buying power. In Multnomah County, higher-income individuals are either staying or leaving, while lower-income individuals are moving in. Washington County shows a similar pattern, though less pronounced.

In contrast, Clackamas and Clark counties are attracting higher-income residents. These individuals are either staying put or moving into these areas, bringing their buying power with them. While Multnomah and Washington counties face a net loss of higher-income residents, Clackamas and Clark counties are gaining both people and purchasing power. This trend became more pronounced in Multnomah County starting in 2018 and accelerated further during the pandemic. See Figure 6.

United States IRS reported income flows–in and out of counties–show winners and losers within our metro region. Multnomah and Washington counties are losing income through migration, while Clackamas and Clark counties are gaining. The trends are most acute in Multnomah County, which saw similarly sized net outflows to the rest of the region, Clark County, and Oregon. Washington County is losing income primarily to the rest of Oregon. Clackamas and Clark counties are seeing net inflows from other parts of the metro area. See Figure 7.

Portland’s appeal in the national real estate market hit a two-decade low, ranking 80 out of 81 in the Urban Land Institute’s latest survey. This survey asks real estate sector leaders to measure the attractiveness of a city for outside investment. Despite some improvement in 2024, this is the city’s worst performance since the rankings began, with only Hartford, Connecticut, scoring lower. However, a silver lining emerges: local respondents rank Portland much higher, suggesting a more optimistic outlook among the region’s industry leaders. See Figure 8.

In 2024, multi-family housing permits declined sharply—a trend anticipated due to high interest rates and constrained capital markets. Since permits typically signal future construction activity, this drop points to further softening in the housing sector ahead. By year’s end, only 821 units were under inspection, marking a steep drop to less than half the number seen in 2023. This slowdown highlights the mounting challenges facing Portland’s housing pipeline to meet current and future needs. See Figure 9.

Apartment construction across the region and city continued to decline sharply in 2023 and 2024, following a late 2022 peak. In Portland, housing units under construction dropped to 1,607 in the fourth quarter of 2024 and are expected to fall further in 2025—marking the lowest levels since 2011. See Figure 10.

The housing affordability crisis is prevalent across the entire Portland metro area. Households with less than $85,000 annual income, a 20% down payment and an assume 6.5% interest rate, have virtually no affordable options between Wilsonville, OR to the south and La Center, WA to the north. Those with somewhat high incomes–up to $110,000–can find affordable options in outer suburbs (e.g., East Portland, Gresham, Aloha, and parts of Vancouver); however, those locations often come with longer work commutes and higher transportation costs. Much of the region is affordable only to households with income of $160,000 or higher. See Figure 11.

Peer Regions

This report marks the second year of benchmarking Portland against the following cohort of peer cities: Denver, Milwaukee, Minneapolis, Sacramento, and Seattle. While Seattle isn’t a direct competitor, it remains a point of interest for Portlanders. Despite different dynamics, Seattle is included in the cohort to satisfy curiosity and offer a Pacific Northwest context alongside cities with more comparable profiles in population, per capita income, cost burden, gross domestic product, and other economic metrics. This broader perspective helps Portland step outside its bubble and evaluate economic indicators and trends in a meaningful way. See Figure 12.

Portland’s peer regions experienced sharp job losses during the pandemic, followed by a steady rebound. However most, including Portland, have struggled to move significantly beyond their pre-pandemic employment peaks, with only Sacramento and Denver making notable gains. Among its peers, Portland’s trend has been middling and showed a decline compared to the previous year. See Figure 13.

Portland and its peers face slower population growth compared to the past two decades, with no domestic in-migration. Growth now relies on natural increases (more births than deaths) and international immigration. For the Portland region, population remained virtually flat in 2022–2023, as domestic out-migration offset modest gains from natural and international migration. See Figure 14.

Portland’s gross domestic product (GDP) per capita remains middling compared to peer cities and is significantly lagging Seattle. While all cities saw GDP growth in 2023, Portland’s economy is uniquely volatile due to its heavy reliance on the semiconductor industry. Recent announcements of federal funding favoring other markets raise concerns that the region’s GDP could decline in the near future. See Figure 15.

Why This Matters

The U.S. has entered an era of slow population growth that places Portland into a stiffer competition for households and talent than in the past. A high cost of living is a population repellent and, until the region can implement policies and programs that bring costs down, Portland metro should expect to underperform its economic performance of more dynamic decades (e.g., 1990s, 2010s) when Portland was a magnet for talent. Furthermore, seven in ten voters feel their taxes are too high, according to DHM Research. People are voting with their feet and choosing to live in communities with lower costs and more abundant job opportunities.

None of Portland metro’s regional peers are fully meeting their economic goals. Four regions, including Portland, have yet to regain their pre-pandemic job levels. All are experiencing flat or declining domestic migration.

The takeaway: Portland and its peer cities are grappling with both the short-term disruptions of the pandemic and the longer-term challenges of an aging, low-fertility society.

The Portland region’s leaders must consider their attitude on growth because the path to a thriving economy must be driven by an intentional growth strategy to attract talent and jobs for a more stable revenue base.

Civic leaders have proven they could identify problems and deliver results. They tackled an ambitious list of challenges and made measurable progress. Now, a new set of challenges awaits their focus. Our region’s leaders must turn their attention to make our economy competitive or face the daunting realities that other region’s have faced before – an urban doom loop.