Economic Data

Outmigration has continued to slow in Multnomah and Washington counties. Among the four metro-area counties, Washington County has the most notable natural population increase. Population increases from all four counties are most heavily dependent on net international migration which will be uniquely challenging given federal policies. See Figure 1.

Natural population change (births minus deaths) in the Portland metro region peaked in 2007 and has declined steadily over the past 25 years. Today, natural change accounts for just 0.1% of population growth, down from 0.7% in 2001. While birth rates are declining nationwide, the trend is especially pronounced in the Portland region. In recent years, Multnomah County has averaged only about 500 more births than deaths, while Clackamas County now experiences more deaths than births. Washington and Clark counties continue to have positive natural change, but both have declined since the early 2000s, with 1,872 and 1,258 more births than deaths in 2024, respectively. See Figure 2.

In past business cycles, the Portland region has typically experienced faster-than-average job growth during periods of economic expansion, alongside sharper employment declines during downturns. Recent data suggest a break from that historical pattern. In 2025, employment in the Portland region continued to contract, based on estimates from both the Oregon Employment Department and the Bureau of Labor Statistics, even as national employment levels increased. See Figure 3.

Employment growth across the region has been uneven since 2020. Clark County continues to stand out, with 114% of employment levels when compared to 2020. Clackamas County has also posted net gains over the period, though at a more moderate pace. In Washington County, job growth accelerated earlier in the recovery but has begun to level off in recent years. Multnomah County remains the clear outlier, with employment still below 2020 levels and trailing the rest of the region. See Figure 4.

Employment declines over the past year were broad-based across the Portland region, with job losses occurring in nearly every major sector. The most pronounced reductions were in professional services,  manufacturing, construction, and information. By contrast, employment gains were concentrated in health care, education, and government, all sectors largely oriented toward local demand. See Figure 5. Traded-sector industries, taken together, continued to contract. Overall, the region lost 8,800 jobs over the past year which is more than any other metro in the US, with the exception of Milwaukee; Virginia Beach, VA; and Washington, D.C.

Portland continues to rank near the bottom of national real estate market outlooks, placing second from last for the second year in a row and ahead of only Hartford, Connecticut. See Figure 6. This marks a substantial shift from Portland’s position in 2017, when the region ranked among the top markets nationally. In less than a decade, Portland has fallen from third place to eightieth in overall real estate prospects.

In 2025, multi-family housing permitting remained subdued, reflecting the continued effects of high interest rates and constrained capital markets. Through the end of December, only 656 new multi-family units were issued, with most still under inspection. This represents a significant decline from 2,092 units in 2023 and a further drop from 868 units in 2024. See Figure 7. Because permits are a leading indicator of future construction activity, the sustained slowdown points to ongoing weakness in the housing pipeline and growing challenges to meeting Portland’s current and future housing needs.

Apartment construction in both Portland and the four-metro region declined sharply between 2023 and 2025. Units under construction fell to roughly 300 in Portland and about 2,000 regionwide, down from peaks of approximately 8,000 units in the city in 2018 and 13,500 units across the region in 2022. See Figure 8.

The City of Portland historically led the region in multifamily housing production, but that position has switched entirely to Clark County. In the years immediately following the pandemic, Portland and Clark County accounted for similar shares of regional multifamily permitting. By 2024 and into 2025, however, the gap widened substantially: Clark County represents 57% of regional multifamily permits, compared to 29% in Portland. This marks a significant shift in where multifamily development is occurring in the region. See Figure 9.

Housing affordability challenges are widespread across the Portland metropolitan area. Even households earning the regional median income of $124,100 and able to make a 20 percent down payment would generally need mortgage interest rates below 5 percent to afford a median-priced home in much of the region. Current rates, which are closer to 6 percent, exceed that threshold. Only in more limited areas, such as parts of Vancouver and East Portland/Gresham, do median-income households appear able to afford homeownership at today’s interest rates. As a result, most of the region remains unaffordable to typical families under current market conditions. See Figure 10.

Housing affordability and job growth go hand in hand. Many fast-growing metros, such as Charlotte, Atlanta, Phoenix, Houston, and Dallas, have added jobs while keeping housing relatively affordable. In fact, 62 percent of job growth across the top 100 metros has occurred in regions with moderate affordability. Portland, by contrast, has seen slower job growth alongside rising housing costs, putting the region at a disadvantage. When wages and job opportunities do not keep pace with housing costs, it becomes harder for people to move to or remain in the region. See Figure 11.

Peer Regions

This report marks the third year of benchmarking Portland against a consistent cohort of peer cities: Denver, Milwaukee, Minneapolis, Sacramento, and Seattle. While Seattle is not a direct competitor, it continues to be a frequent point of comparison for Portlanders interested in understanding how the region stacks up across the Pacific Northwest. Including Seattle alongside cities with more similar characteristics, such as population size, per capita income, cost burdens, gross domestic product, and other key economic indicators, provides helpful context. Taken together, this peer set allows Portland to look beyond its immediate experience and assess economic performance and trends within a broader and more informative frame of reference.

Across Portland’s peer regions, employment fell sharply during the pandemic and then recovered gradually in the years that followed. In most cases, job growth has since slowed, leaving regions clustered near their pre-pandemic employment levels. Sacramento and Denver are notable exceptions, having moved more clearly beyond their 2020 benchmarks. Within this context, Portland posted modest employment gains in mid-2025, but those gains eroded by year end, leaving employment just below 2020 levels. See Figure 12.

Similar to the Portland region, population growth across peer regions is increasingly driven by international migration. Natural increase, defined as births exceeding deaths, represents a relatively small and declining share of population change across all peers. Portland and Seattle also share a distinct pattern, with net domestic outmigration exceeding inflows in recent years. See Figure 13.

Portland’s GDP per capita is moderate relative to its peers but remains well behind Seattle’s higher-output economy. Portland also underperforms the top-50 metro median of $88,900, indicating weaker productivity and income generation than leading regions. See Figure 14.

Exports in the Portland metro area have declined for four consecutive quarters since peaking at $10.0 billion in Q4 2024, falling to $6.4 billion. Among 40 selected U.S. metropolitan areas, Portland experienced the largest percentage decline in export value in 2025. This contraction reflects the region’s high exposure to international trade, particularly along the Pacific Rim, where export-oriented industries have been affected by tariffs, trade policy uncertainty, and reduced trade flows with China. See Figure 15.

Economic Growth

Nearly all states carry unfunded pension liabilities, with only two reporting none. To allow for more meaningful comparisons across states, these liabilities are measured as a share of personal income. By that metric, Oregon ranks in the top 20 percent of states with the highest unfunded pension burdens, with liabilities exceeding 9 percent of statewide personal income. Reducing this burden relative to income depends largely on growth in the income base. Absent structural changes, stronger income growth, driven in part by population growth, is one of the primary ways these liabilities decline as a share of personal income. See Figure 16.

Since 2000, household formation and population growth have increasingly diverged, a pattern that is even more pronounced in 2025 and beyond. Household formation has grown and is projected to continue growing faster than population. This dynamic increases demand for housing units even when population growth is modest or flat. It also places upward pressure on infrastructure and public service costs, as roads, utilities, and services must support more households without a proportional increase in population, raising per-resident costs. See Figure 17.

Renters continue to drive the overall household growth in 2024, which is illustrated when comparing population and household formation growth between owners and renters. While population and household formation are similar in growth amongst owners in both the Portland and Seattle region, household growth is significantly higher for renters. See Figure 18.

From 2012 to 2019, incomes in the Portland metro area rose relative to the U.S. metro average. Since then, incomes have declined across all income groups, with the largest losses among lower-income households. See Figure 19.

The pattern is more pronounced in Multnomah County, where income distribution has fallen more sharply over the past five years, particularly at the lower end. In effect, households in Multnomah County are earning less, relative to peers nationwide, across the income spectrum than they were five years ago. See Figure 20.

Conclusion

The trends outlined in this year’s State of the Economy report point to a region with economic indicators flashing clear warnings. Slower population growth, job recovery concentrated in SW Washington, declining competitiveness in traded-sector industries, and a sharply constrained housing pipeline together represent more than a cyclical slowdown; they signal structural challenges that will shape Portland’s trajectory for years to come. At the same time, these pressures underscore what is at stake: the region’s ability to attract and retain talent, support broad-based prosperity, and sustain the public investments that underpin long-term economic vitality. Portland’s next chapter will depend on whether leaders can respond with the urgency, coordination, and clarity needed to restore confidence, expand housing and employment opportunities, and reposition the region for durable growth.