FRIDAY, NOVEMBER 29, 2019
THE OBSERVER — 5A
LOCAL
ECONOMY
Continued from Page 1A
Eastern Oregon, it’s pretty
much the same.” He said
he expects a good year for
merchants.
“All in all, consumers are
fairly optimistic,” said Bailey.
“They’re feeling good about
their own fi nancial situa-
tion.”
Pat O’Connor, regional
economist at the state Em-
ployment Department, said
that while Oregon tends to
have a tougher time during
recessions, its economy tends
to outpace the rest of the
country during expansions.
But he said that the high
growth that Oregon and
the rest of the country have
experienced in recent years
is starting to slow.
Earlier this year, the
economy showed signs it
was teetering on a recession.
While fears of a recession
didn’t materialize, the
economy is still showing
signs of slowing. Businesses
are investing less, and hiring
has slowed.
“Growth has slowed in 2019
and downside risks remain
elevated,” wrote Josh Lehner,
an economist with the Oregon
Offi ce of Economic Analysis,
in a summary of the state’s
most recent economic forecast.
“However, a recession is not
yet seen in the data.”
O’Connor said that
business investment is
down, possibly because of
decreased demand or un-
easiness over the trade wars.
The slowdown isn’t surpris-
ing, he said. He attributed
the tight labor market to
employers running out of
people to hire.
“I think that’s the biggest
change over the past years,”
said O’Connor. “But if you
have to have some slow
growth, it’s good to have it at
record low unemployment.”
He said that the economy
has been propped up by
consumers with more money
to spend. Earlier this month,
economic research fi rm
Moody’s Analytics noted that
“the consumer is shouldering
all the burden in preventing
the slowing from turning
into something worse.”
RUNNING OUT OF GAS
Private economists don’t
paint quite as rosy a picture
as the state’s analysts.
Both Tapogna and fellow
ECONorthwest economist
Bob Whelan warn there are
a few signals that the U.S.
is headed for a recession.
They’re warning consumers
and business owners alike to
Photo by Stephanie Basalyga/Business Tribune
Hannah Johnson, an assistant store manager with Tender Loving Empire, readies a
display for holiday shoppers at the retailer’s fl agship store at SW 10th Ave. in
downtown Portland.
tread lightly.
“Retail sales are surpris-
ingly weak. To me it looks
like the economy is running
out of gas,” Whelan said. “If I
were a retailer, hotelier, res-
taurateur; I’d be cautious.”
When assessing the
economy’s strength, Whelan
looks at indicators including
consumer spending, debt,
manufacturing and agricul-
tural production, population
growth, employment and
housing development. He
believes consumer spend-
ing is particularly illustra-
tive of the economic health
because it accounts for about
two-thirds of the economy,
the other third being made
up of mostly government
spending.
According to Whelan,
reports from national retail-
ers provide some insight into
how Oregon retailers might
be faring and what they can
expect in the coming months.
Kohl’s is one company that
provides a good snapshot of
how much average con-
sumers are spending at a
point in time, Whelan said,
because the retailer serves
a decidedly middle-class
demographic.
Kohl’s could serve as a red
fl ag for Oregon’s retailers.
Two weeks ago, the stock fell
nearly 25 % in one day after
reporting poor performance
in the third quarter and
projecting a bad outlook for
the holidays.
Whelan also warned that
consumer spending has
relied on credit, particularly
in the mortgage and auto
industries. Defaults on car
loans are at a 20-year high,
meaning that consumers are
Staff photo by Phil Wright
The Liberty Theatre Foundation recently received a
$225,000 grant from the Ford Family Foundation.
LIBERTY
Continued from Page 1A
fabricator Wyatt Williams
made the frame, which
provides a foundation for a
future canopy that will look
almost identical to the one
the building had about a
century ago.
This summer, restoration
workers fi nished install-
ing about 1,500 old bricks
at the theater’s facade. The
bricks resemble the ones the
theater had before it closed
six decades ago, when its
facade, entrance and lobby
were remodeled to accommo-
date retail businesses. The
presuming too much about
the future economy and us-
ing credit terms that outlive
their cars. These are signs
that a recession could be on
the horizon, he said.
“Don’t borrow a lot of
money and cut back (on
spending),” Whelan said.
“That’s what I would tell
consumers and business
owners right now.”
According to Lance Rudge,
Portland market leader for
U.S. Bank, Americans will
be wary of how political
shakeups at the state and
national level in 2020 might
affect both their businesses
and their pocketbooks.
“The economy and job
market are strong, but
we are seeing that small
businesses are hesitant to
take on more debt with the
consequences from 2008 still
in mind,” Rudge said.
For now, Rudge said, “We
expect a good holiday shop-
ping season.”
RISING PRICES
The Trump administra-
tion’s trade wars pose a
particular threat to Oregon,
which relies heavily on
exports. The state’s economic
forecast identifi ed slower
growth in construction,
hospitality, business services
and durable goods. It also
found that employers are
posting fewer help wanted
ads and that business invest-
ment is down.
Whelan and Tapogna
indicate tariffs have actu-
ally hurt Oregon worse
than what’s previously been
reported, particularly in the
areas of manufacturing and
agriculture.
Overall, manufacturing
old Liberty also lost its sign
when the movie house closed
in 1959.
The centerpiece of the
facade now is the Liberty
Theatre’s blade sign, a rep-
lica of its original, which was
installed and switched on in
late 2015. The approximately
10-foot sign has served as a
beacon of illumination ever
since.
The Liberty Theatre
opened in 1911. It was fi rst
known as the Orpheum The-
ater and later the Arcade. It
was extensively remodeled
in 1923 and a few years later
was renamed the Liberty
Theatre.
The Liberty Theatre
Foundation earlier this year
received another hefty grant
— $100,000 from the Oregon
Main Street Project. The
foundation plans to continue
to write grants and solicit
community support, accord-
ing to the news release, “so
that the Liberty Theatre will
once again be center stage
and serve as La Grande’s
living room.”
To celebrate the Ford
Family Foundation grant
award and progress made in
renovation work, the Liberty
Theatre Foundation will hold
an open house the evening of
Dec. 13 in the theater’s lobby.
The foundation also reported
more details of that event
will be forthcoming.
employment in Oregon is
declining, and increased taxes
on products like hazelnuts,
timber and microprocessors
have caused headaches for
farmers, loggers and tech
giants alike. Outside of those
industries Oregon has fared
well, according to Tapogna,
but prices for certain im-
ported products continue to
rise and put the burden on
consumers.
“Oregon is sort of in the
middle of the pack of all
states. We’re not as adverse-
ly affected as some of the
state’s in the middle of the
country by the export aspect
of trying to sell things into
China, but on the other side,
in terms of tariffs for things
coming into the country, it’s
putting upward pressure on
prices,” Tapogna said.
HOLIDAY SALES
Oregon business owners,
however, are feeling confi -
dent in the state’s economy
heading into the holidays
and the sales season ahead.
“I’m anticipating it will be
exceptional,” said Bob Neher,
owner of Clay in Motion, a
pottery shop in Milton-
Freewater, outside of Pendle-
ton. “Everyone is upbeat.”
Randy Smith, co-owner of
Smitty’s Ace Hardware and
Smitty’s Outpost in Herm-
iston, said he mostly sells
things people need more
than want, a protection that
insulates his business from
seeing as many highs and
lows as other retailers.
Smith is expecting a
strong holiday shopping
season, but he said that
circumstances feel different
for retailers now than it did
three to fi ve years ago. He
said that Black Friday deals
now span a month.
“Truthfully they kind of
ruined Black Friday,” he
said. “It’s not a huge peak.
You don’t have the same
excitement.”
Mark Bigej, owner of Al’s
Garden and Home in Wil-
sonville, confi rmed Smith’s
sentiment. He’s noticed that
consumers are ready to shop
for the holidays sooner and
sooner each year rather than
waiting for Thanksgiving
weekend.
“We’re a little bit anxious
about the fact that Thanks-
giving is a week later and
there’s a compressed shop-
ping time between Thanks-
giving and Christmas,” Bigej
said. “That’s worrisome
when we lose a solid week.
Right now, consumers seem
to be ready for Christmas
and are shopping early.
We’re seeing more consumer
spending this year than last
year, and we’re hoping that
continues.”
Going into the holidays,
local retailers face challenges
from online retail giants
like Amazon, as well as
what could be a particularly
snowy winter for the state.
Retailers seem confi dent
that local consumers will
continue to spend if they
cater to their needs and
inclement weather doesn’t
ruin shopping days.
In Baker City, Betty’s
Books receives freight three
times a week to try to rival
the convenience many seek
by online shopping and
continues to have shopper
year-round. “We have one
day (shipping) sometimes,”
said Carolyn Kulog, owner
of Betty’s Books, which has
been open 40 years.
In La Grande, Blue
Mountain Outfi tters owner
Jim Whitbeck has shifted
marketing away from tour-
ism to a larger focus on the
local scene at his outdoor
equipment store. Whitbeck
said people are surprised a
business like his, which sells
medium- to high-end outdoor
products, can compete with
retail giants.
“The one thing I have to
say is I never knew a world
without Amazon,” Whitbeck
said.
Marie LeRud, owner of
Lake Oswego’s Lucky Me
Boutique, has turned to
creativity to bring more
customers into her brick-
and-mortar store in the age
of online shopping. She offers
free gift wrapping during the
holiday season, something
that sets her apart in the
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minds of customers deciding
where to buy.
“I’m a big-themed kind of
person. You don’t get that on-
line. You have to be creative
in the way of getting your
customers wanting to come
into the store,” LeRud said.
Some business own-
ers aren’t looking to the
economy as a barometer for
sales, they’re looking to the
skies as forecasts predict
snowy weather for the state.
The confi dence in Oregon’s
economy seems to diminish
at the prospect of snow.
Will Peters, manager of
Annie Bloom’s Books in
Multnomah Village, said
snow or ice in the Portland
area hits retailers hard.
That’s particularly trouble-
some during a season that
can make or break a small
business’ annual revenue.
“Weather, that’s always
the unpredictable thing.
(But) we’ve had people come
in on cross country skis,” he
said. “It’s a shorter season,
and we’re planning for that.
But overall, I think it will be
solid.”
Jared Mees, co-owner of
indie record label Tender
Loving Empire, said the
unique niche of his busi-
ness means it doesn’t have
to compete with online
retailers. The label oper-
ates a handful of stores in
the Portland area offering
records, apparel, housewares
and other unique items.
Although Mees doesn’t
worry about losing sales
to the internet, he’s been
anxiously tracking weather
forecasts that predict at least
one or two snowstorms dur-
ing the next couple of weeks.
For Tender Loving Empire,
inclement weather can turn
a $5,000 day for sales into
one with just $300 or $500 in
the register at closing time.
“If there’s a ‘snowpo-
calypse,’ it can deter (shop-
pers), and you don’t get those
days back. It’s like every
retailer … this is your time
to profi t. Once Dec. 24 hits,
it’s over,” Mees said.
Contributing to this report
were Joseph Gallivan, Portland
Tribune; Jade McDowell,
East Oregonian; Phil Wright,
La Grande Observer; Jayson
Jacoby, Baker City Herald;
Stephanie Basalyga, Business
Tribune; Clara Howell,
Lake Oswego Review; Corey
Buchanan, Wilsonville
Spokesman.
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