Transportation and the Economy 2015 Transportation Seminar Willamette University January 14, 2015 Dr. Tom Potiowsky Director, Northwest Economic Research Center

TRANSPORT & INVESTMENT

Transport and Infrastructure Investment American Society of Civil Engineers Report Source: ASCE http://www.asce.org/failure_to_act_economic_studies/ Source: American Society of Civil Engineers Reporthttp://www.asce.org/failure_to_act_economic_studies/

Transport and Infrastructure Investment American Society of Civil Engineers Report ASCE finds that with an additional investment of $157 billion a year between now and 2020, the U.S. can eliminate this drag on economic growth and protect: $3.1 trillion in GDP, almost the equivalent of Germany’s entire GDP $1.1 trillion in U.S. trade value, equivalent to Mexico’s GDP   3.5 million jobs, more than the jobs created in the U.S. over the previous 22 months $2.4 trillion in consumer spending, comparable to Brazil’s GDP $3,100 in annual personal disposable income Source: ASCE http://www.asce.org/failure_to_act_economic_studies/ Source: American Society of Civil Engineers Report http://www.asce.org/failure_to_act_economic_studies/

The Circular Flow of the Economy Source: http://jfvambrosio.files.wordpress.com/2013/10/circular-flow.jpg

A few Important Facts and Trends From Oregon Transportation Plan 2006 Oregon Department of Transportation Goal: “To promote the expansion and diversification of Oregon’s economy through the efficient and effective movement of people, goods, services and information in a safe, energy efficient and environmentally sound manner.” “Oregon’s transportation system is part of a broader Northwest and West Coast regional, national and international transportation system.” “The Portland metropolitan area is the economic hub of the state with a wide diversity of businesses and key transportation facilities, Oregon’s economy is dependent on products and services from all parts of the state.” Source: Oregon Transportation Plan 2006. (pag. 53, 54) I:\Research\Shares\nerc\PROJECTS\Presentations\Future Presentations\2015-1-14 ODOT Source: Oregon Transportation Plan 2006, Transportation Development Division

Oregon Commodity Flow Forecast According to ODOT’s Commodity Flow Forecast from 2009: Truck flows dominate with shares of roughly 72-78% All flows remain relatively stable Air remains less than .1% in tonnage, but 6-11% of flows in terms of value It should also be noted that Air freighting moves high-value products (such as pharmaceuticals and legal documents) Source: ODOT, Commodity Flow Forecast, 2009 http://www.oregon.gov/ODOT/RAIL/docs/rail_study/appendix_e_oregon_commodity_flow_forecast.pdf Excerpt: As shown in Exhibit 2, truck flows dominate throughout the Oregon CFF, with a share of roughly 72 to 78%. All modes retain a stable share over the forecast period. Air remains less than 0.1% in terms of overall tonnage, but represents six to 11% of flows in terms of value of all state freight movements. The Oregon CFF numbers obscure the importance of air in the state freight system as the ability to ship products by air is critical to seamless delivery of high-value products for business, industry, and personal uses. Such key commodities moved by air range from pharmaceuticals (e.g., blood and organs) to other time-sensitive deliveries (e.g., legal documents, auto parts). Source: Exhibit 2, Commodity Flow Forecast, ODOT 2009

Oregon Commodity Flow Forecast Source: ODOT, Commodity Flow Forecast, 2009 http://www.oregon.gov/ODOT/RAIL/docs/rail_study/appendix_e_oregon_commodity_flow_forecast.pdf Excerpt: The Oregon CFF tonnage is summarized by Oregon region in Exhibit 4 and excludes pipeline flows. Overall the growth rates are relatively consistent, with Portland growing at the highest rate due to the fact that it provides a gateway, and thus an origin or destination for many state flows, resulting in compounding of flows that cause it to grow at a faster rate. Non-Portland regions are growing slightly faster than OEA population growth rate of 1.3%). Source: Exhibit 4, Commodity Flow Forecast, ODOT 2009

Source: Oregon Ports Presentation Location: I:\Research\samba\nerc\Completed Projects\Ports\Draft Report and Slides -Peter Source: Economic Benefits of Oregon Public Ports

Port of Portland: global & domestic trading hub Columbia River Ports: agriculture, food/beverage processing, energy, advanced technology Agricultural Products & Outdoor Recreation Business & Trade Inputs Coastal Ports: seafood, wood products, tourism Source: Oregon Ports Presentation Location: I:\Research\samba\nerc\Completed Projects\Ports\Draft Report and Slides Forest Products & Outdoor Recreation Source: Economic Benefits of Oregon Public Ports

Port of Portland, Portland Harbor & Port of Vancouver Economic Benefits Oregon Ports provide the link between producers (i.e., agriculture, forest and seafood products) and manufacturing products (i.e., electronics, food and energy products) with global and domestic markets. 1 in 6 jobs in Oregon are port-related. [Oregon Ports Strategic Plan] Jobs related to exports pay 20-40% more than average. [Brookings Institute, 2010 Value of Jobs study] Portland Region ranks 4th in U.S. in export value (as share of Metro output in 2012). [Brookings Institute, 2013] Source: Oregon Ports Presentation Location: I:\Research\samba\nerc\Completed Projects\Ports\Draft Report and Slides

Port of Portland, Portland Harbor & Port of Vancouver Economic Benefits. Regional analysis (includes Oregon and Washington) 75,800 total jobs (direct, indirect/induced) Output of $7.3 billion Labor income of $3.8 billion Annual local/state tax payments of $346 million Annual federal tax payments of $246 million $1 in port tax generates $6 in added local tax payments Source: Oregon Ports Presentation Location: I:\Research\samba\nerc\Completed Projects\Ports\Draft Report and Slides http://www.portofportland.com/PDFPOP/Trade_Trans_Studies_Ecnmc_Impact_2011.pdf Source: Port of Portland

EMPLOYMENT IN TRANSPORT & OTHER SECTORS

Oregon Industries Return to Pre-Recession Level Percent Change in Employment Since Jan 2008 through Nov 2014 Spreadsheet: Location: I:\Research\Shares\nerc\PROJECTS\Presentations\Slides Library and Supporting Data\Spreadsheets\Labor\Oregon & Calif Industrial Employment- Winners & Losers through Nov 2014 Source: Bureau of Labor Statistics -Marisol Source: Bureau of Labor Statistics

Oregon Industries Yet to Fully Recover Percent Change in Employment Since Jan 2008 through Nov 2014 Spreadsheet: Oregon & Calif Industrial Employment- Winners & Losers through Oct 2014 Bureau of Labor Statistics Location: I:\Research\Shares\nerc\PROJECTS\Presentations\Slides Library and Supporting Data\Spreadsheets\Labor -Marisol Source: Bureau of Labor Statistics

Estimated Employment Transportation, Oregon Employed (January 1990 - Oct 2014) Source: Employment and Wages by Industry (QCEW), Oregon Employment Department QualityInfo.org and NERC Sheet: Trans & Wareh Location: I:\Research\Shares\nerc\PROJECTS\Presentations\Slides Library and Supporting Data\Spreadsheets\Transportation\Oregon Transportation Source: Oregon Employment Department, Employment and Wages by Industry (QCEW), NERC

Employment by Industry, Oregon Employed (January 2001 - June 2014) Source: Employment and Wages by Industry (QCEW), Oregon Employment Department QualityInfo.org Sheet: QCEW Location: I:\Research\Shares\nerc\PROJECTS\Presentations\Slides Library and Supporting Data\Spreadsheets\Transportation Oregon\Oregon Transportation Source: Oregon Employment Department, Employment and Wages by Industry (QCEW)

Employment by Industry, Oregon All Employees (January 2001 - June 2014) Source: Employment and Wages by Industry (QCEW), Oregon Employment Department QualityInfo.org Sheet: QCEW Location: I:\Research\Shares\nerc\PROJECTS\Presentations\Slides Library and Supporting Data\Spreadsheets\Transportation Oregon\Oregon Transportation Source: Oregon Employment Department, Employment and Wages by Industry (QCEW)

EXPORTS OREGON

-Marisol Josh Lehner (graph send by email). “This is something I’ve been meaning to dig into a bit more for years: the commodity flow survey by Census. What I’m trying to show is that a lot of focus is on exports, but the flow of commodities within the US, from Oregon to other states, is much much much bigger. The value of shipments that start in Oregon and go out of state is equivalent to nearly half of state GDP while exports are not quite 10% of state GDP.   I think that our relative drop in ranking across states has a lot to do with Intel’s expansion, with its exponential contribution to state GDP. Our exports are pushed around by Intel shipping stuff to their Asian plants as well. It’s back on the upswing in 2014, so our relative position among state is improving, while 2012 is something of a low point here.”

Notes: Maybe you find this interesting (from Josh Lehner OEA blog) For a graph explanation: http://oregoneconomicanalysis.com/2014/07/09/oregon-exports-2014q1/ On net, the increased exports over the past year are entirely due to high-technology products, largely destined for Asian ports (63% of the gain) or Costa Rica (17%). Of course this masks over the changes in other industries. Strong gains in machinery, transportation equipment and food products were offset by declines in agricultural, chemicals and waste products. Source: Oregon Office of Economic Analysis

Questions and Discussion