Oregon’s economy delivered mixed news over the past fiscal year. While the private sector continued to struggle—particularly in manufacturing—state government emerged as one of the few bright spots.
State Hiring Outpaces Other Sectors
According to recent state data, Oregon’s government workforce grew by 4% during the year ending July 30, 2025. That made it one of the strongest areas of job creation in the state.
The expansion contrasts sharply with broader trends. Manufacturing, once a pillar of Oregon’s economy, fell by 5% during the same period, extending a multiyear slump.
Whether Oregonians welcome the increase in government jobs or view it skeptically, the numbers highlight an important reality: state government has become one of the few steady employers in an uncertain economy.
Manufacturing Struggles Continue
Gail Krumenauer, an economist with the Oregon Employment Department, outlined the scope of the downturn. Job losses cut across industries:
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Construction – down about 900 jobs
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Retail businesses – down 3,900 jobs
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Frozen fruits and vegetables processing – down 1,000 jobs, affecting producers of potatoes, berries, and green beans
The declines follow years of challenges for Oregon manufacturers, including supply chain disruptions, rising costs, and international competition. The sector’s prolonged weakness has left thousands of Oregonians without stable work and struggling to transition to new fields.
Gains in Health Care and Social Assistance
Not all the news was negative. Private health care and social assistance added thousands of positions, providing one of the few areas of sustained growth.
Still, Krumenauer cautioned against seeing these gains as a complete solution. Jobs in health care and social assistance are highly specialized, often requiring certifications or years of training. “When growth comes only in such specialized sectors, it creates a weaker position for the entire labor market,” she said.
That mismatch means displaced manufacturing or wholesale trade workers may not be able to move into available positions quickly, leaving them unemployed or underemployed.
Warning Signs in the Data
Although national employment trends have remained relatively stable, Oregon’s numbers are raising alarms.
“We’re not seeing months and months of sustained job losses happening in the U.S. yet,” Krumenauer said. “But it is a growing concern to see a few months of job losses in a row happen in Oregon.”
Economists say consecutive months of statewide losses could signal deeper structural issues—particularly if manufacturing continues to contract while growth remains concentrated in narrow fields like health care.
What It Means for Oregon
The uneven picture underscores the challenges ahead. State hiring can cushion economic blows, but it cannot replace broad-based private sector growth. Meanwhile, specialized job creation risks leaving many Oregonians behind if training and workforce development do not keep pace.
As the state looks to the next fiscal year, policymakers and employers will face tough questions: Can Oregon revive its manufacturing sector? Will new industries emerge to absorb displaced workers? Or will government continue to be the primary driver of employment growth?
For now, Oregon stands at a crossroads—celebrating modest gains in some areas while grappling with troubling declines in others.
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