Salem economy strong heading into the holidays, despite recent shakeup

People shop in downtown Salem. (File/Caleb Wolfe/Special to Salem Reporter)

Oregon’s economy is strong heading into the holiday season, and Salem is no exception.

Unemployment is at historic lows, wages are growing, and people have money to spend, a reversal from the recession a decade ago.

These trends are carrying into holidays, where local stores are waiting to see how holiday sales shake out.

Erik Andersson, president of the Strategic Economic Development Corp. in Salem, said the economy has been in record shape for a while, but “it’s just hard to celebrate the strong economy when you’ve got a major employer that’s announced a closure.”

Andersson said the NORPAC closures, which will see the loss of nearly 1,000 workers, will have a domino effect on the farmers who rely on the processing plant to buy their vegetables. He said the impacts are yet to be seen.

READ: Salem’s economy takes a jolt as 1,000 jobs disappear with NORPAC collapse

“We’re tempering our enthusiasm for the economy with concerns of the farm families that are impacted by the NORPAC closure,” he said.

While the loss of nearly 1,000 jobs in the county has cast a cloud over an otherwise favorable outcast, Andersson said there’s good news to be had.

Andersson’s group works with industries in the traded sector, like manufacturing, and he said there’s been quite a bit of energy in the community around job creation and investment.

“As far as I know, there’s investment being made,” he said. “Contractors are busy. In that respect there’s quite a bit of activity.”

Andersson said one indicator of a strong local economy is a major retailer choosing to expand.

“When you do look at the growth of Amazon not just in Salem but internationally and nationally those jobs reflect increased purchasing happening,” Andersson said.

Amazon recently hired 1,000 workers for its fulfillment center in the Mill Creek Industrial area.

State labor economist Pat O’Connor said there’s no question the overall retail market has been growing very strong.

O’Connor said despite NORPAC’s closing, Salem is still on track with the rest of the state.

“By and large we’ve really kind of been following Oregon’s trend. Our industry matches the statewide mix,” he said. “We were certainly outpacing the U.S. in terms of job growth by a 4-year period.”

For the past three years unemployment has been at historic lows of 4% to 4.4%.

 “A lot of the data points are coming together to make sense why employers are struggling to find workers,” he said. “If we’re not at full employment we’re pretty darn close.”

But job growth has been slowing. The Office of Economic Analysis is predicting continued growth moving into 2020, though less than 2018.

O’Connor said the state isn’t forecasting a recession on the horizon, but there are some indicators that a mild one could be coming, like increased turnover rates.

“It makes sense the turnover has gone up now as there’s more competition for workers,” he said.

Historically, O’Connor said the Salem area sees 600 additional jobs through the holiday season.

Local retailers are hoping the increasing spending will reach them.

Jacqueline Hogle opened Revival Clothiers in downtown Salem in March. She’s waiting to see what the holiday weekend will bring for sales.

“A lot of us retailers are on pins and needles wondering what this weekend is going to be like,” she said.

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News tip? Contact reporter Saphara Harrell: [email protected] or 503-549-6250.