Technology investments, building boom aid ailing Oregon.

Byline: Christian Wihtol The Register-Guard

What's good for the high-tech industry is good for the Oregon economy, and Thursday's U.S. Commerce Department report on the gross domestic product offers some promising signs, economists said.

Especially encouraging was the 15.4 percent annual growth rate in spending by businesses on equipment and software in the third quarter, the largest rise since the first quarter of 2000, economists said.

"That's good for a lot of the stuff we do in Oregon," said John Mitchell, an economist at US Bank in Portland.

Oregon and Lane County are home to a slew of tech firms. Locally, big tech employers are computer chip maker Hynix in west Eugene and software maker Symantec in Springfield.

The brisk rate of housing construction - spurred by record-low interest rates - also helps the state, Mitchell said. Residential housing construction rose at an annual rate of 20.4 percent in the quarter, pushing up lumber and plywood prices. That rate's not sustainable, but it may help Oregon's wood products industry avoid further job cuts, economists said.

Oregon's jobless rate of 8 percent is among the highest in the nation, and assuming a national recovery is taking hold, it will still be a while before Oregon begins adding jobs, economists said.

"Strong growth in demand for capital spending - computer hardware, software - will begin to show up in the Oregon economy in the next six to 18 months," said Jeff Thredgold, an economics consultant who monitors the Western states from his office in Salt Lake City.

Mitchell said he expects Oregon to return to positive job growth in the next 12 months.

As of September, Oregon had 1.569 million nonfarm jobs, down 16,600 jobs from a year earlier. In the tech-led bust that has gripped Oregon for the past three years, Lane County has fared slightly better than the state overall. The county jobless rate was 7.3 percent in September. The county had 140,900 nonfarm workers in September, up a slim 0.5 percent, or 700 jobs, from a year earlier.

Mitchell noted that even though the state has fewer jobs now than it did 12 months ago, the state in August and September registered month-to-month total job gains.

"If you look at the last couple of months, we seem to have bottomed out and are rising," Mitchell said.

Thredgold warned that corporate tech spending remains cautious. "We're not seeing a big explosion in spending," he said. But companies, after spending heavily four years ago to prepare for Y2K, are now saddled with equipment that is "ancient" by fast-evolving tech standards, Thredgold said.

"We're finally seeing companies with a higher level of business confidence being willing to step up" and spend, he said.

Mitchell warned that Thursday's rosy numbers might later be revised downward. But any big change seems unlikely, he said. "This time, the numbers are very consistent with what else is happening nationally," he said.