Portland in Localized Recession
Portland's economy has been in a localized recession since 2023, according to new data. The analysis from EcoNorthwest shows the city ranking near the bottom for consumer sentiment, housing permits, and employment growth. The downturn persists despite recent tax hikes on local businesses.
The region's economic downturn has been characterized by a significant loss of jobs, with the metro area shedding 8,800 positions in 2025, ranking it the fourth worst-performing metro area in the United States. This contrasts with a period of previous growth where the Portland region historically outpaced national job growth during economic expansions. The job losses have been concentrated in high-paying sectors such as manufacturing, professional services, and financial services. A key factor contributing to the challenging business environment is a series of tax increases implemented since 2019. Local taxes on Portland businesses have risen by as much as 32%, creating a substantial financial burden. This includes a city gross receipts tax, an increase in Multnomah County's business income tax, and a Metro regional government income tax. As a result, Portland now has one of the highest combined state and local individual income tax rates in the nation. The economic strain is also evident in the city's real estate market. Portland ranks 80th out of 81 major metropolitan areas for real estate investment attractiveness. The pipeline for multifamily housing has dwindled to its lowest point since 2011, with only 656 new units in the works in 2025. This is a stark decrease from 2,092 units in 2023. Downtown office vacancy rates have also reached concerning levels, further signaling economic distress. The recession is accompanied by a trend of outmigration, particularly of higher-income households. IRS data reveals that between 2020 and 2022, Multnomah County lost approximately $2.2 billion in taxable income. The average income of individuals moving out of the county is significantly higher than those moving in, creating a "doom loop" scenario where a shrinking tax base could lead to reduced public services or further tax increases. In response to these challenges, local and regional bodies have initiated recovery plans. The "Central City Recovery Plan" focuses on improving safety, cleanliness, and vibrancy to attract people back to the downtown core. On a broader scale, the "Greater Portland Economic Recovery Plan" aims to support small businesses, advance economic mobility for individuals, and support families and children in the region. The Portland Metro Chamber has also proposed a six-month action plan to kickstart the economy, which includes funding for a business expansion program and bringing a Major League Baseball franchise to the city.
