Where the recession took its toll

Published 12:00 am Sunday, December 14, 2014

Joe Kline / The Bulletin Jed and Noelle Teuber, co-owners of Furnish, sit at a combination dining and pool table in their Bend store Thursday. Jed Teuber said carrying unique products, like the table, helped the company survive through the recession.

Jed and Noelle Teuber doubled down in 2008 and moved their furniture store, Furnish, into a space on Arizona Avenue twice as big as the one they had occupied for six years nearby on Industrial Way.

“We were in that mode of feeling like we figured out our niche and how do we expand on it, take advantage of it, just as the recession hit,” Jed Teuber said Wednesday.

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Six years later, the store is still in business, although several other furniture stores, like sailing ships in a hurricane, went down in Bend between 2007 and 2012.

In Deschutes County, 31 furniture stores employed 190 people in 2007, according to the U.S. Census Bureau. That year, those businesses reported a payroll of nearly $6 million. Five years later, nine fewer stores were in business, employing 138 people at an annual payroll of $4.1 million. Seven furniture stores alone closed between mid-2008 and mid-2009.

“The recession was certainly hard on us,” Teuber said. “It was not fun.”

The Great Recession reordered the business landscape in and around Bend and in many sectors. About 12 percent of all county retail businesses — the category that includes furniture stores — in 2007 were gone five years later, according to data released earlier this year. Tourism- and recreation-oriented businesses suffered, along with real estate and financial firms. Construction took the worst hit as the housing market ground to a halt.

Conversely, as Central Oregon continued to draw new residents and changes took place in the health care industry, demand for new clinics and schools ensured steady growth in those sectors. And today, even construction and tourism have regained some of the ground lost in the downturn.

Deschutes County employment in leisure and hospitality peaked at 11,252 in August 2008, according to the Oregon Employment Department. At the peak of tourist season the following August, that sector had shed 1,000 workers, and another 100 in August 2010. Jobs in tourism started a comeback in August 2011 and have climbed each season since, according to state wage and employment data. In August 2013, that sector employed 11,271, the state reported.

“It just recovered a ton in the last 1½, two years,” said Damon Runberg, Central Oregon regional economist for the Employment Department.

Likewise, the construction industry has improved from its low nearly three years ago, according to federal census and state employment data. Construction workers numbered 8,473 in August 2006 but fell to 2,429 in February 2012, according to the Employment Department. In June, they numbered 4,330, the department reported.

“I think we’ve reached what is a good, strong, stable market for us,” said Andy High, vice president for the Central Oregon Builders Association. “It’s going to take a while for labor to pick up. It’s going to take some time to bring them back in.”

According to census data, about 44 percent of construction-related firms in Deschutes County in 2007 were gone by 2012. The number of firms dropped during those five years from 1,462 to 823. Of 447 firms that specialized in residential construction, for example, just 223 remained in 2012.

Oregon Employment Department data showed more than 5,300 plumbers, painters, electricians and other specialty tradesmen and women at work in the county in August 2006. Just 1,553 remained in March 2012, when hiring took hold again. By June of this year, nearly 3,000 tradespeople were working in Deschutes County.

Builders complained this year and last of a labor shortage as homebuilding found its legs again.

“There is still a gap in the trades. A lot of that workforce got retrained and went onto new things in life,” High said Thursday. But, he said, “we’re definitely hearing about people coming back.”

Conversely, the health care industry grew steadily in nearly every category year after year from 2007 to ’12. The number of all health care and social service establishments increased by 13 percent, from 537 to 607, according to census data. The Census Bureau reported nearly 1,400 more people working in those fields five years after the recession got underway.

The number of child day care centers in Deschutes County grew by 12, to 62 total, for example. The number of outpatient care centers increased from eight in 2007 to 15 five years later. Employees in those centers doubled in number to 332, according to 2012 census data.

Three health care providers — St. Charles Health System, Bend Memorial Clinic and Mosaic Medical — leased nearly 72,000 feet for new clinics and support services this year. In March, health care executives in Bend attributed those moves, in part, to increasing demand for services from a greater number of health care recipients due to the expansion of Medicaid and the imposition of the federal Affordable Care Act.

“One of the reasons you see this move to outpatient care is this greater emphasis on preventative care,” Runberg said. “It’s a really big emphasis on preventative health care that allowed this expansion of clinics and took people away from hospitals.”

Other sectors that fared poorly during the recession had links to the housing sector, the collapse of which, in part, caused the recession. Mortgage and real estate brokers and property managers all saw double-digit declines in the number of businesses left standing in 2012. Separately, wholesale trade and manufacturing also took hits.

Teuber, the furniture store owner, said he and his business-partner wife kept their inventory lean during those years and relied on a loyal clientele with the income to afford new purchases. One client furnishing a home could balance the books for the month, he said. Staying small and flexible and offering a unique product also helped Furnish weather the downturn, he said.

“We were definitely seeing what was happening,” Teuber said, referring to the sinking competition. “There’s a level of, ‘I feel bad for them,’ and if we can make it through this, if anything, it opens up more opportunity. Not to revel in anybody’s misfortune.”

— Reporter: 541-617-7815, jditzler@bendbulletin.com

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