Regional Competitive Industry Analysis

Regional Competitive Industry Analysis Clackamas, Multnomah, and Washington Counties July 2017 Washington Multnomah Clackamas Michael Meyers, Economist (503) 229-6179 michael.meyers@oregon.gov Jill Cuyler, Research Analyst (503) 229-5484 jill.cuyler@oregon.gov Equity, Strategy, & Communications Division One World Trade Center 121 SW Salmon Street, Suite 205 Portland, OR 97204

Table of Contents EXECUTIVE SUMMARY... 3 INTRODUCTION... 4 SECTION 1: SOURCES AND METHODOLOGY... 4 Regional Indicators... 5 Competitive Industry Indicators... 5 Employment Growth Projections... 6 Caveats and Limitations... 6 SECTION 2: OVERVIEW OF THE REGIONAL ECONOMY... 7 Employment, Total Payroll and Average Wage per Job... 7 Employment Growth... 7 Manufacturing Employment and Wages... 8 Unemployment Rate... 10 SECTION 3: REGIONAL COMPETITIVE INDUSTRIES... 10 Location Quotient Analysis... 10 Shift-Share Analysis... 12 Regional Employment Projections by Industry... 16 Page 2 of 18

Regional Competitive Industry Analysis Clackamas, Multnomah, and Washington Counties Executive Summary The three counties in this region comprise the majority of the Portland Metropolitan Statistical Area in terms of population and jobs. 53 percent of total private sector employment in Oregon is found here. Situated around the City of Portland and the mouth of the Willamette River, this region is the historic and current epicenter of Oregon s economy. The region s economy is diverse with competitive industries in high technology, metals and machinery, professional and technical services, and outdoor gear and apparel, but high technology has an overweight impact on economic output. The private sector average wage in the region is 18 percent higher than the statewide average. The region was the 2 nd fastest growing in Oregon between 2005 and 2015, and grew faster than the statewide average over that time. This growth has not been evenly distributed throughout the region, though. Washington County, with more employment than Clackamas County, but less than Multnomah County, grew faster than the other two counties over the past 10 years. Washington County employment grew by 17 percent between 2005 and 2015, compared to 7 and 12 percent for Clackamas and Multnomah counties. Manufacturing was 13 percent of the region s private sector employment in 2015, slightly higher than the statewide average of 12 percent. With a location quotient of 1.21, manufacturing is very important to the region s economy and competitive advantages. Computer and electronic product manufacturing is the largest manufacturing subsector in the region with over 33,000 jobs. Fabricated metal products and food manufacturing are the next largest manufacturing subsectors in the region. The Greater Portland region has a growing, dynamic economy with a diverse array of competitive and emerging industries. Several competitive traded sector industries experienced significant competitive share gains in the region between 2005 and 2015, including company management in apparel and footwear, food and beverages, upstream metals and machinery, professional and technical services, and semiconductors and electronics. Educational support services, computer and peripheral equipment manufacturing, greenhouse, nursery, and floriculture production, and activities related to credit intermediation in financial services were competitive traded sector industries that experienced large competitive share percentage Page 3 of 18

losses. E-commerce and aerospace manufacturing were amongst several emerging traded sector industries to experience significant competitive share gains between 2005 and 2015. Total private sector payroll employment in the region is projected to grow by 16 percent between 2014 and 2024, identical to the statewide rate. Software, professional and technical services, and management of companies are some of the industries expected to grow the fastest between 2014 and 2024. Manufacturing is projected to grow by 8 percent, less than the statewide rate of 12 percent. Introduction The purpose of this report is to present a competitive industry analysis of the regional economy consisting of Clackamas, Multnomah, and Washington counties. Regional trends in employment and wages are analyzed and compared to trends in Oregon and the U.S. This report provides data and analysis to help economic development practitioners, policy makers, and businesses identify strengths, weaknesses, opportunities, and threats that pertain to their regional economy. The information in this report can be used to help guide strategic economic development efforts in the region. This report is composed of four sections. Section one outlines the data sources and methodology behind the creation of this report. The second section provides an overview of the regional economy by analyzing employment and wage trends over time. Section three supplies a framework to identify industries in the region that may have a competitive advantage in developing or expanding regional industry specialization. Section four analyzes ten year employment projections of the region s main industries and identifies industries with above average growth potential. Section 1: Sources and Methodology This report is based on analysis of statistical data from the U.S. Bureau of Labor Statistics (BLS), Oregon Employment Department (OED), and U.S. Census Bureau. The majority of data is presented for traded sector industries only. However, non-traded sector employment data is provided as part of OED s projections (Table 9). The methodology for this report uses a series of indicators to provide a framework for evaluating the competitive strengths and growth opportunities of the regional economy. The following indicators are used for this report. Page 4 of 18

Regional Indicators Section two begins with a comparative analysis of the regional economy focusing on private sector business establishments, employment, total payroll, and average wages to show the geographic distribution and characteristics of employment in each region. Recent employment and wage trends are also analyzed and compared to the state. This is followed by an analysis of manufacturing employment and wages. Employment and average annual wages of leading manufacturing subsectors are presented, along with their location quotients. A location quotient measures the employment concentration of a given industry in a region compared to that industry s employment concentration in the nation as a whole. Location quotients above 1.0 indicate that an industry s share of employment in the region is greater than its share of employment nationwide. For example, an industry with a location quotient of 2.0 has twice as much employment locally as the national average for that industry. Location quotients are a simple way to help identify industries in the region that have a competitive advantage as demonstrated by a greater than average employment concentration. An analysis of manufacturing establishments by size class follows, which shows the distribution of manufacturers in the region amongst four different size classes. This analysis shows how much a region may be dependent on small, medium, or large-size manufacturers. The unemployment rate analysis reveals how well the region has done at creating and retaining jobs for its working-age population. The analysis compares the regional unemployment rate to rates from Oregon and the U.S., which shows whether the region has performed better or worse than average. This comparative analysis also provides insight into how autonomous the region s economy is from Oregon and the U.S. Competitive Industry Indicators Section three begins with two detailed analyses that attempt to identify industries that have a competitive advantage in the region. A detailed location quotient analysis by four digit NAICS codes shows industries in the region that appear to have a competitive advantage based on high location quotients. This analysis includes all traded sectors of the economy, not just manufacturing. Industries with high location quotients and higher than average wages are highlighted. Following the location quotient analysis is a shift-share analysis. Shift-share analysis, like location quotient analysis, is useful in identifying industries with a competitive advantage in the region. Unlike a location quotient analysis that is a point-in-time analysis, shiftshare analysis looks at industry performance over time to measure how employment in an industry changed in relation to national and industrial trends. If a region s industry consistently outperforms its peers nationwide over a period of time this indicates a growing competitive advantage for that industry. The shift-share analysis examines the ten-year growth rates for regional and nationwide industry employment. Employment Page 5 of 18

change over the past ten years for each industry is broken out by change due to national total employment trends, change due to national industry employment trends, and change due to competitive advantage. Tables 6, 7, and 8 present competitive share percent changes and competitive share job gains and losses for industries in the region that had the largest gains and losses in competitive advantage. Employment Growth Projections Section four examines employment growth projections for the major industries in each region. Current projections cover the period from 2014 to 2024. Caveats and Limitations Employment and wage data throughout the report comes from Quarterly Census of Employment and Wages (QCEW) data from the BLS and OED. Data was also used from the U.S. Census Bureau s Local Employment Dynamics (LED) program, which is also based on QCEW data. All of these sources are limited to employment and wages covered under unemployment insurance. The final table in this report (Table 9) is not limited to covered employment and includes total non-farm employment. A substantial amount of industry employment and wage data for Oregon counties is confidential and not published by BLS or OED. Estimates were created for confidential three and four digit NAICS industries by county. The primary method used to create estimates was wage share calculations from LED data. Unlike BLS and OED employment and wage data, LED data includes wages for many industries for which employment is confidential. As a result, one can produce employment estimates for industries with confidential employment by calculating the share of wages in a particular industry compared to other confidential industries under the same parent industry and applying that ratio to the amount of unpublished confidential employment amongst those industries. Estimates were done for industries with at least $3 million in annual payroll. Local knowledge and analyst judgment were used to vet the reliability of final employment data. In just in few cases, more reliable employment figures from other sources such as Hoovers (Dun & Bradstreet), newspapers, or company websites were substituted for wage share employment estimates. In these instances, the wage column reads N/A in relevant tables. The manufacturing establishments by size data in Table 3 is a combination of two data sets. The total number of manufacturing establishments comes from QCEW data from the Bureau of Labor Statistics. The percent of manufacturing establishments by employment size-class data comes from County Business Patterns (CBP) data from the U.S. Census Bureau. The two data sets are combined in this table because the QCEW data is more accurate in its total count of establishments, but it does not include size class data for counties. The CBP data does have size class data for counties, but its overall number of Page 6 of 18

establishments by county is not as accurate as the QCEW. Combined, one can estimate the number of establishments by employment-size class. Tables 6, 7, and 8 include ten year employment change analyses by industry. Due to the administrative nature of QCEW data, changes in industry employment can occur that are not the result of actual economic changes within the industry. Some, but not all, of these so-called non-economic changes were identified in the ten year analyses and industry employment adjustments were made so that industry employment trends could be more accurately captured. Section 2: Overview of the Regional Economy Employment, Total Payroll, and Average Wage per Job Private sector employment in this region accounted for 53 percent of Oregon s total private sector employment in 2015. The 2015 private sector average annual wage in the region was $56,321, 18 percent higher than the statewide average. Multnomah County accounts for half of total private sector employment in the region. Washington County had the highest average annual wage in the region, $67,003. Table 1: Employment, Total Wages, and Average Wage per Job, Private Sector, 2015 Area Employment Total Payroll Average Wage % of Region Employment % of Statewide Ave. Wage Clackamas 134,659 6,608,524,193 $49,076 17.0% 102.7% Multnomah 406,242 21,161,966,229 $52,092 51.2% 109.0% Washington 252,185 16,897,050,728 $67,003 31.8% 140.2% Region 793,086 $44,667,541,150 $56,321 100.0% 117.9% Oregon 1,508,680 $72,079,481,599 $47,777 N/A 100.0% Source: US Bureau of Labor Statistics, Quarterly Census of Employment and Wages, 2015. Employment Growth The region s ten year private sector employment growth ranked 2 nd in the state. Private sector employment growth in the region was 43 percent higher than Oregon s over the past ten years. Page 7 of 18

Private sector employment in Washington County grew twice as fast as the statewide average. Multnomah County grew at a slower rate but still higher than the state. Clackamas County grew at a slower rate than the statewide average. Table 2: Change in Private Sector Employment, 2005-2015 Area 2005 Employment 2015 Employment Employment Change Employment Change Rank Clackamas 126,468 134,659 6.5% 15 Multnomah 361,973 406,242 12.2% 10 Washington 215,797 252,185 16.9% 5 Region 704,238 793,086 12.6% 2 Oregon 1,386,917 1,508,680 8.8% N/A Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment & Wages. Manufacturing Employment and Wages Manufacturing was 13 percent of the region s private sector employment in 2015. With a location quotient of 1.21, manufacturing is very important to the region s economy and competitive advantages. Computer and electronic product manufacturing is the largest manufacturing subsector in the region, accounting for one-third of manufacturing employment. The region has fewer small manufacturers than the statewide average, and slightly higher percentages of medium and large establishments. Page 8 of 18

Table 3: Manufacturing Employment and Wages, 2015 NAICS Industry Employment Location Quotient Average Wage 31-33 Manufacturing 99,905 1.21 $81,584 334 Computer and Electronic Product Manufacturing 33,380 4.74 $132,790 332 Fabricated Metal Product Manufacturing 10,574 1.09 $53,666 311 Food Manufacturing 10,125 1.00 $45,206 336 Transportation Equipment Manufacturing 7,262 0.67 $67,153 333 Machinery Manufacturing 7,090 0.95 $75,469 331 Primary Metal Manufacturing 5,579 2.12 $68,886 339 Miscellaneous Manufacturing 3,907 0.99 $48,702 323 Printing and Related Support Activities 3,721 1.24 $48,649 326 Plastics and Rubber Products Manufacturing 3,083 0.67 $49,357 327 Nonmetallic Mineral Product Manufacturing 2,655 1.00 $50,667 337 Furniture and Related Product Manufacturing 2,218 0.87 $45,293 321 Wood Product Manufacturing 2,200 0.86 $44,931 335 Electrical Equipment, Appliance, and Component Mfg. 1,945 0.76 $61,191 322 Paper Manufacturing 1,941 0.78 $57,611 325 Chemical Manufacturing 1,295 0.24 $57,356 312 Beverage and Tobacco Product Manufacturing 1,170 0.78 $36,273 314 Textile Product Mills 497 0.64 $31,009 315 Apparel Manufacturing 475 0.52 $38,224 324 Petroleum and Coal Products Manufacturing 393 0.53 $78,832 316 Leather and Allied Product Manufacturing 364 1.88 $44,616 Source: Business Oregon with data from U.S. Bureau of Labor Statistics, Oregon Employment Department, and U.S. Census Bureau (2014-2015). Table 4: Manufacturing Establishments by Size, 2015 Percent of Manufacturing Establishments by Employment-Size Class Area Total Manufacturing Establishments 1-19 20-99 100-249 250 or More Clackamas 596 74.5% 18.3% 4.7% 2.5% Multnomah 1,270 75.7% 18.0% 4.3% 1.9% Washington 799 66.9% 24.9% 4.6% 3.6% Region 2,665 72.8% 20.1% 4.5% 2.6% Oregon 5,850 74.3% 19.0% 4.4% 2.3% Source: Total establishments from U.S. Bureau of Labor Statistics, Quarterly Census of Employment & Wages; employment-size class data from U.S. Census Bureau, County Business Patterns, 2014. Page 9 of 18

Unemployment Rate The region s unemployment rate was consistently lower than the state s between 2005 and 2015. The region reached its highest unemployment rate over the ten year period, 10.2 percent, in 2009 and has since declined at a rate faster than the state and nation. The lowest unemployment rate over the ten year period, 4.6 percent, occurred in 2007. 12% Chart 1: Average Annual Unemployment Rate 2005-2015 10% Unemployment Rate 8% 6% 4% 2% Region Oregon U.S. 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: US Bureau of Labor Statistics, Local Area Unemployment Statistics. Section 3: Regional Competitive Industries Location Quotient Analysis Most of the state s Target Industry Groups are concentrated in the region, including Advanced Manufacturing, Business Services, Food & Beverages, High Technology, and Outdoor Gear & Apparel. Semiconductor and other electronic component manufacturing has, by far, the highest employment concentration in the region. It also pays the highest wages. Other major industries with high location quotients include foundries, greenhouse, nursery, and floriculture production, software, and management of companies and enterprises. Page 10 of 18

Table 5: Industries with Highest Location Quotients Private Sector, 2015, U.S. Base Area, Industries with Employment Greater than 200 and Location Quotient 1.2 or Greater, Industries with Average Wage above Region Average Shaded NAICS Industry Employment Location Quotient Average Wage 3344 Semiconductor and Other Electronic Component Mfg. 26,898 10.92 $142,534 3322 Cutlery and Handtool Manufacturing 1,956 7.60 $63,133 3365 Railroad Rolling Stock Manufacturing 1,071 5.29 $79,987 3315 Foundries 4,183 5.03 $69,897 1114 Greenhouse, Nursery, and Floriculture Production 3,948 4.01 $30,613 3332 Industrial Machinery Manufacturing 2,601 3.45 $95,098 5112 Software Publishers 7,294 3.28 $107,648 3162 Footwear Manufacturing 285 3.18 $57,288 3343 Audio and Video Equipment Manufacturing 403 3.01 $69,039 5511 Management of Companies and Enterprises 33,819 2.30 $132,859 3119 Other Food Manufacturing 2,967 2.26 $34,334 5414 Specialized Design Services 1,932 2.16 $60,096 1153 Support Activities for Forestry 211 2.06 $51,906 3272 Glass and Glass Product Manufacturing 1,047 1.88 $49,981 3118 Bakeries and Tortilla Manufacturing 3,648 1.84 $50,385 7224 Drinking Places (Alcoholic Beverages) 4,375 1.76 $18,295 3341 Computer and Peripheral Equipment Manufacturing 1,802 1.67 $84,010 3271 Clay Product and Refractory Manufacturing 436 1.65 $47,530 4233 Lumber and Other Construction Materials Wholesalers 2,251 1.60 $78,052 3333 Commercial and Service Industry Machinery Mfg. 953 1.60 $65,471 4248 Beer, Wine, and Distilled Alcoholic Beverage Wholesalers 1,998 1.58 $54,224 3345 Navigational, Measuring, Electromedical Mfg. 4,205 1.57 $99,304 4244 Grocery and Related Product Merchant Wholesalers 7,707 1.55 $55,202 5418 Advertising, Public Relations, and Related Services 4,812 1.50 $71,129 3372 Office Furniture (including Fixtures) Manufacturing 1,052 1.50 $53,176 4243 Apparel, Piece Goods, and Notions Merchant Wholesalers 1,456 1.45 $98,101 7111 Performing Arts Companies 1,127 1.43 $30,435 4231 Motor Vehicle and Motor Vehicle Parts and Supplies Wholesalers 3,167 1.43 $56,208 5182 Data Processing, Hosting, and Related Services 2,816 1.42 $89,488 4251 Wholesale Electronic Markets and Agents and Brokers 8,408 1.38 $86,888 5419 Other Professional, Scientific, and Technical Services 6,065 1.38 $48,911 3359 Other Electrical Equipment and Component Manufacturing 1,171 1.35 $63,567 3311 Iron and Steel Mills and Ferroalloy Manufacturing 774 1.31 $76,383 3326 Spring and Wire Product Manufacturing 379 1.31 $54,279 3114 Fruit and Vegetable Preserving and Specialty Food Mfg. 1,430 1.25 $44,334 3231 Printing and Related Support Activities 3,721 1.24 $48,649 5614 Business Support Services 7,395 1.24 $41,436 5121 Motion Picture and Video Industries 3,217 1.24 $35,415 4235 Metal and Mineral (except Petroleum) Merchant Wholesalers 1,049 1.23 $63,280 3328 Coating, Engraving, Heat Treating, and Allied Activities 1,125 1.21 $45,526 Source: Business Oregon with data from U.S. Bureau of Labor Statistics, Oregon Employment Department, U.S. Census Bureau (2014-2015), and other public documents. Page 11 of 18

Shift-Share Analysis Several industries amongst Oregon s Target Industry Groups experienced significant competitive share gains in the region between 2005 and 2015, including company management in apparel and footwear, food and beverages, upstream metals and machinery, professional and technical services, and semiconductors and electronics. Motion picture and video industries and performing arts companies were arts industries in the region that also gained significant competitive share between 2005 and 2015. Amongst competitive traded sector industries in the region, educational support services, computer and peripheral equipment manufacturing, greenhouse, nursery, and floriculture production, and activities related to credit intermediation in financial services experienced the largest competitive share percentage losses between 2005 and 2015. Software, a growing competitive traded sector industry in the region, saw a decline in competitive advantage between 2005 and 2015. Emerging traded sector industries in the region that experienced the highest competitive share gains between 2005 and 2015 were other crop farming, support activities for crop production, ship and boat building, and drugs and druggists sundries merchant wholesale trade. E-commerce and aerospace manufacturing were additional large, emerging traded sector industries in the region to experience significant competitive share gains between 2005 and 2015. Page 12 of 18

Table 6: Competitive Industries with Highest Competitive Advantage Percent Gains, 2005-2015 Shift-Share Analysis, Private Sector, U.S. Base Area, Industries with LQ Greater than 1.2 and Employment Greater than 200 Employment Location NAICS Industry 2015 Quotient Competitive Share Percent Competitive Share Jobs 4243 Apparel, Piece Goods, and Notions Merchant Wholesalers 1,456 1.45 277.0% 1,062 5121 Motion Picture and Video Industries 3,217 1.24 112.1% 1,621 3114 Fruit and Vegetable Preserving and Specialty Food Manufacturin 1,430 1.25 80.7% 651 3372 Office Furniture (including Fixtures) Manufacturing 1,052 1.50 72.8% 504 7224 Drinking Places (Alcoholic Beverages) 4,375 1.76 70.1% 1,774 3311 Iron and Steel Mills and Ferroalloy Manufacturing 774 1.31 66.4% 322 3119 Other Food Manufacturing 2,967 2.26 60.3% 974 5414 Specialized Design Services 1,932 2.16 58.8% 701 2361 Residential Building Construction 5,753 1.24 50.5% 2,378 6213 Offices of Other Health Practitioners 7,649 1.40 48.4% 1,887 4251 Wholesale Electronic Markets and Agents and Brokers 8,408 1.38 45.8% 2,284 3343 Audio and Video Equipment Manufacturing 403 3.01 43.6% 168 6243 Vocational Rehabilitation Services 3,219 1.46 37.6% 837 3162 Footwear Manufacturing 285 3.18 37.1% 95 6116 Other Schools and Instruction 3,864 1.51 36.3% 737 3272 Glass and Glass Product Manufacturing 1,047 1.88 34.7% 326 7111 Performing Arts Companies 1,127 1.43 33.2% 275 5418 Advertising, Public Relations, and Related Services 4,812 1.50 31.9% 1,095 3333 Commercial and Service Industry Machinery Manufacturing 953 1.60 30.6% 263 3344 Semiconductor and Other Electronic Component Manufacturing 26,898 10.92 30.4% 7,259 3315 Foundries 4,183 5.03 28.5% 1,153 4248 Beer, Wine, and Distilled Alcoholic Beverage Merchant Wholesal 1,998 1.58 25.4% 327 3118 Bakeries and Tortilla Manufacturing 3,648 1.84 22.3% 637 3271 Clay Product and Refractory Manufacturing 436 1.65 21.8% 111 5619 Other Support Services 3,112 1.53 21.3% 530 3326 Spring and Wire Product Manufacturing 379 1.31 18.8% 78 3332 Industrial Machinery Manufacturing 2,601 3.45 18.0% 426 2383 Building Finishing Contractors 6,950 1.41 17.3% 1,302 6232 Residential Intellectual and Developmental Disability, Mental H 5,260 1.29 15.9% 604 6233 Continuing Care Retirement Communities and Assisted Living F 10,141 1.74 15.4% 987 5323 General Rental Centers 326 1.25 11.9% 52 4244 Grocery and Related Product Merchant Wholesalers 7,707 1.55 11.7% 762 3322 Cutlery and Handtool Manufacturing 1,956 7.60 10.1% 249 4921 Couriers and Express Delivery Services 4,703 1.28 9.5% 386 6242 Community Food and Housing, and Emergency and Other Relief 1,723 1.65 9.3% 123 4512 Book Stores and News Dealers 775 1.29 6.1% 93 5614 Business Support Services 7,395 1.24 4.6% 281 3359 Other Electrical Equipment and Component Manufacturing 1,171 1.35 4.2% 49 4233 Lumber and Other Construction Materials Merchant Wholesaler 2,251 1.60 4.2% 108 4885 Freight Transportation Arrangement 1,695 1.23 3.8% 53 3231 Printing and Related Support Activities 3,721 1.24 2.5% 131 3328 Coating, Engraving, Heat Treating, and Allied Activities 1,125 1.21 2.2% 25 Source: Business Oregon; data from Bureau of Labor Statistics, Oregon Employment Department, and U.S. Census Bureau. Page 13 of 18

Table 7: Competitive Industries with Highest Competitive Advantage Percent Losses, 2005-2015 Shift-Share Analysis, Private Sector, U.S. Base Area, Industries with LQ Greater than 1.2 and Employment Greater than 200 Employment Location NAICS Industry 2015 Quotient Competitive Share Percent Competitive Share Jobs 6117 Educational Support Services 1,110 1.25-55.4% -521 6214 Outpatient Care Centers 6,624 1.33-33.1% -1,757 3341 Computer and Peripheral Equipment Manufacturing 1,802 1.67-26.2% -889 6115 Technical and Trade Schools 1,359 1.75-25.4% -398 4851 Urban Transit Systems 474 1.57-19.0% -83 1114 Greenhouse, Nursery, and Floriculture Production 3,948 4.01-18.1% -1,082 5223 Activities Related to Credit Intermediation 2,528 1.28-18.1% -643 4884 Support Activities for Road Transportation 927 1.44-15.5% -136 5511 Management of Companies and Enterprises 33,819 2.30-14.3% -4,335 5621 Waste Collection 1,412 1.29-13.3% -158 4883 Support Activities for Water Transportation 972 1.51-13.2% -146 3365 Railroad Rolling Stock Manufacturing 1,071 5.29-10.1% -108 5182 Data Processing, Hosting, and Related Services 2,816 1.42-9.0% -247 5112 Software Publishers 7,294 3.28-8.7% -483 4511 Sporting Goods, Hobby, and Musical Instrument Stores 4,504 1.24-6.2% -243 4235 Metal and Mineral (except Petroleum) Merchant Wholesalers 1,049 1.23-4.9% -52 5419 Other Professional, Scientific, and Technical Services 6,065 1.38-4.1% -204 5313 Activities Related to Real Estate 6,394 1.48-3.9% -202 1153 Support Activities for Forestry 211 2.06-3.3% -7 4422 Home Furnishings Stores 2,012 1.21-1.8% -42 3345 Navigational, Measuring, Electromedical, and Control Instrumen 4,205 1.57-1.4% -65 4231 Motor Vehicle and Motor Vehicle Parts and Supplies Merchant W 3,167 1.43-0.7% -24 Source: Business Oregon; data from Bureau of Labor Statistics, Oregon Employment Department, and U.S. Census Bureau. Page 14 of 18

Table 8: Emerging Industries with Highest Competitive Advantage Percent Gains, 2005-2015 Shift-Share Analysis, Private Sector, U.S. Base Area, Industries with LQ Less than 1.2 and Employment Greater than 200 NAICS Industry Employment 2015 Location Quotient Competitive Share Percent Competitive Share Jobs 1119 Other Crop Farming 355 0.83 154.9% 235 1151 Support Activities for Crop Production 1,061 0.49 124.0% 549 3366 Ship and Boat Building 1,056 1.14 122.9% 608 4242 Drugs and Druggists' Sundries Merchant Wholesalers 918 0.68 104.6% 484 3116 Animal Slaughtering and Processing 591 0.18 95.7% 294 6223 Specialty (except Psychiatric and Substance Abuse) Hospitals 711 0.48 94.9% 285 5416 Management, Scientific, and Technical Consulting Services 9,260 1.08 87.9% 3,421 7131 Amusement Parks and Arcades 334 0.25 87.6% 134 3353 Electrical Equipment Manufacturing 448 0.47 83.8% 210 4541 Electronic Shopping and Mail-Order Houses 2,456 1.08 80.9% 876 3251 Basic Chemical Manufacturing 296 0.30 73.7% 127 4453 Beer, Wine, and Liquor Stores 674 0.66 60.5% 237 3279 Other Nonmetallic Mineral Product Manufacturing 422 0.85 56.4% 154 7115 Independent Artists, Writers, and Performers 287 0.82 55.2% 91 3112 Grain and Oilseed Milling 316 0.79 50.8% 108 3369 Other Transportation Equipment Manufacturing 252 1.13 43.6% 86 5612 Facilities Support Services 322 0.35 43.1% 86 6239 Other Residential Care Facilities 982 0.90 42.4% 295 3364 Aerospace Product and Parts Manufacturing 2,532 0.77 42.1% 710 2372 Land Subdivision 264 0.95 40.1% 124 7112 Spectator Sports 986 1.06 39.1% 261 3152 Cut and Sew Apparel Manufacturing 429 0.58 35.3% 167 3334 Ventilation, Heating, Air-Conditioning, and Commercial Refriger 659 0.77 34.3% 191 3212 Veneer, Plywood, and Engineered Wood Product Manufacturing 404 0.82 33.3% 143 4452 Specialty Food Stores 1,783 1.16 32.7% 453 4539 Other Miscellaneous Store Retailers 2,212 1.05 31.1% 502 6215 Medical and Diagnostic Laboratories 1,767 1.02 30.5% 331 6244 Child Day Care Services 5,945 1.08 30.0% 1,257 4421 Furniture Stores 1,508 1.03 27.8% 413 4882 Support Activities for Rail Transportation 218 0.96 25.3% 30 6211 Offices of Physicians 13,752 0.81 25.1% 2,369 7223 Special Food Services 4,229 0.98 23.9% 701 3351 Electric Lighting Equipment Manufacturing 248 0.78 23.4% 57 5321 Automotive Equipment Rental and Leasing 1,375 1.02 23.1% 255 1133 Logging 289 0.83 22.2% 63 4451 Grocery Stores 16,770 0.93 18.9% 2,453 3222 Converted Paper Product Manufacturing 1,715 0.95 17.9% 319 5616 Investigation and Security Services 4,695 0.80 17.1% 589 5239 Other Financial Investment Activities 2,115 0.70 16.2% 201 3256 Soap, Cleaning Compound, and Toilet Preparation Manufacturing 215 0.31 15.1% 30 3327 Machine Shops; Turned Product; and Screw, Nut, and Bolt Manu 2,555 1.04 15.0% 312 6114 Business Schools and Computer and Management Training 425 0.92 14.7% 61 4442 Lawn and Garden Equipment and Supplies Stores 1,008 1.00 14.1% 121 1123 Poultry and Egg Production 219 0.79 13.1% 25 Source: Business Oregon; data from Bureau of Labor Statistics, Oregon Employment Department, and U.S. Census Bureau. Page 15 of 18

Employment Projections by Industry Total private sector payroll employment is projected to grow by 126,900 jobs between 2014 and 2024, a 16 percent increase which is identical to the statewide projection. Software, residential building construction, professional and technical services, and management of companies are the industries expected to experience the greatest percentage increases in employment between 2014 and 2024. Health care, professional and technical services, and accommodation and food services are projected to experience the greatest absolute increase in jobs. Manufacturing is projected to grow by 8 percent, less than the statewide rate of 12 percent. Page 16 of 18

Table 9: Regional Industry Employment Forecast, 2014-2024 Clackamas, Multnomah, and Washington Counties 2014 2024 Change % Change Total employment 943,800 1,084,600 140,800 15% Total payroll employment 890,500 1,023,500 133,000 15% Total private 777,500 904,400 126,900 16% Natural resources and mining 10,000 10,600 600 6% Mining and logging 600 700 100 17% Construction 43,000 53,100 10,100 23% Construction of buildings 10,800 13,500 2,700 25% Residential building construction 5,400 6,900 1,500 28% Nonresidential building construction 5,400 6,600 1,200 22% Heavy and civil engineering construction 3,400 3,800 400 12% Specialty trade contractors 28,800 35,800 7,000 24% Manufacturing 96,400 103,900 7,500 8% Durable goods 74,100 79,400 5,300 7% Wood product manufacturing 2,200 2,400 200 9% Primary metal manufacturing 5,600 5,300-300 -5% Fabricated metal product manufacturing 10,300 10,800 500 5% Machinery manufacturing 6,900 8,000 1,100 16% Computer and electronic product manufacturing 32,300 33,400 1,100 3% Semiconductor and electronic component mfg. 25,700 27,300 1,600 6% Electronic instrument manufacturing 4,300 4,100-200 -5% Transportation equipment manufacturing 6,600 7,700 1,100 17% Nondurable goods 22,300 24,500 2,200 10% Food manufacturing 9,700 12,000 2,300 24% Paper manufacturing 1,900 1,700-200 -11% Trade, transportation, and utilities 165,100 186,700 21,600 13% Wholesale trade 45,200 50,900 5,700 13% Merchant wholesalers, durable goods 21,700 23,400 1,700 8% Merchant wholesalers, nondurable goods 15,300 17,600 2,300 15% Electronic markets and agents and brokers 8,200 9,900 1,700 21% Retail trade 90,000 102,500 12,500 14% Motor vehicle and parts dealers 10,200 11,700 1,500 15% Building material and garden supply stores 6,200 7,400 1,200 19% Food and beverage stores 18,600 21,600 3,000 16% Clothing and clothing accessories stores 9,600 10,500 900 9% Sporting goods, hobby, book and music stores 5,200 5,900 700 13% General merchandise stores 17,600 19,800 2,200 13% Transportation, warehousing, and utilities 29,900 33,300 3,400 11% Transportation and warehousing 27,900 31,100 3,200 11% Truck transportation 8,600 9,500 900 10% Couriers and messengers 4,700 5,200 500 11% Warehousing and storage 3,100 3,800 700 23% Information 19,800 22,200 2,400 12% Publishing industries, except Internet 8,500 10,300 1,800 21% Software publishers 6,700 8,900 2,200 33% Telecommunications 3,700 3,300-400 -11% Financial activities 55,300 59,100 3,800 7% Finance and insurance 35,600 38,400 2,800 8% Credit intermediation and related activities 15,900 16,600 700 4% Insurance carriers and related activities 16,000 17,500 1,500 9% Real estate and rental and leasing 19,700 20,700 1,000 5% Real estate 16,700 17,700 1,000 6% Page 17 of 18

Table 9: Regional Industry Employment Forecast, 2014-2024 (continued) Clackamas, Multnomah, and Washington Counties 2014 2024 Change % Change Professional and business services 140,900 175,600 34,700 25% Professional and technical services 56,600 72,200 15,600 28% Legal services 7,400 8,000 600 8% Architectural and engineering services 9,500 11,700 2,200 23% Computer systems design and related services 10,900 15,700 4,800 44% Management of companies and enterprises 31,200 39,900 8,700 28% Administrative and waste services 53,100 63,600 10,500 20% Administrative and support services 50,900 60,900 10,000 20% Employment services 22,500 28,000 5,500 24% Business support services 7,800 8,700 900 12% Services to buildings and dwellings 11,300 13,400 2,100 19% Private educational and health services 122,800 147,100 24,300 20% Private educational services 22,200 25,900 3,700 17% Health care and social assistance 100,500 121,200 20,700 21% Ambulatory health care services 39,200 49,500 10,300 26% Hospitals 23,400 25,500 2,100 9% Nursing and residential care facilities 20,300 25,100 4,800 24% Social assistance 17,500 21,100 3,600 21% Leisure and hospitality 89,600 107,100 17,500 20% Arts, entertainment, and recreation 12,200 14,100 1,900 16% Amusement, gambling, and recreation 8,600 10,100 1,500 17% Accommodation and food services 77,400 93,000 15,600 20% Accommodation 7,800 8,500 700 9% Food services and drinking places 69,500 84,400 14,900 21% Restaurants and other eating places 61,500 74,800 13,300 22% Other services and private households 34,600 39,000 4,400 13% Membership associations and organizations 13,700 14,800 1,100 8% Government 113,000 119,100 6,100 5% Federal government 14,000 13,500-500 -4% Federal post office 3,600 3,300-300 -8% State government 19,100 20,000 900 5% State education 5,900 6,100 200 3% Local government 79,900 85,600 5,700 7% Local education 47,700 52,100 4,400 9% Self-employment 53,300 61,100 7,900 15% Source: Oregon Employment Department Page 18 of 18