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Central Oregon’s economy might feel like the top of a mountain, but that doesn’t mean a downhill ride is right around the corner.

That’s according to Damon Runberg, Central Oregon regional economist for the Oregon Employment Department.

“I don’t see a recession in the near future, and I see opportunities for us to continue to grow,” Runberg said Wednesday morning at the Bend Chamber of Commerce Economic Forecast Breakfast at the Riverhouse on the Deschutes convention center.

Runberg was one of three panelists who made presentations on the broad economy and urban real estate development. Runberg’s outlook was echoed by Mark Zoff, senior economist and lead statistical modeler for PayNet, a Skokie, Illinois, company that provides credit ratings on small businesses.

The default rate on small-business loans in Oregon is 40 percent below levels seen before the financial crisis of 2007, Zoff said. PayNet’s forecast of future defaults shows higher risk across the southern United States.

“Small businesses remain in a low-gear environment,” Zoff said, but hesitancy about new investments isn’t rooted in economic fundamentals. The global and domestic economic outlook is positive, he said.

Future growth in Central Oregon will be more incremental, however, because the region has already staged a “grand recovery,” Runberg said. Deschutes County posted the second-highest job growth out of 350 metro areas last year, he said. The county’s economic output, $8.2 billion, was 22 percent higher than the previous peak. Local GDP also grew faster, 8.1 percent, than all but one other small metro area in the United States.

“This is as good as it gets,” Runberg said.

Runberg and Zoff were joined by Joe Minicozzi, principal of Urban3 LLC, the consulting arm of downtown Asheville, North Carolina, real estate developer Public Interest Projects. Visiting the area for the Building a Better Bend lecture series, Minicozzi spoke Wednesday at Trinity Episcopal Church.

Hired by municipalities across the country, Minicozzi warns that subsidizing suburban-style development will not pay off in terms of future tax revenue. “Your downtown’s your golden goose,” he said. “Feed it, and do your math.”

Property values have risen sharply in Bend since the depth of the Great Recession, creating a shortage of affordable housing and sparking a lot of discussion about land-use and tax policies. A lack of affordable housing and available labor could constrain future growth, Runberg said. One way businesses can overcome those constraints is to focus on retaining and promoting their current workers, who’ve already found a place to live, he said.

Another way to overcome the labor shortage is to raise wages, Runberg said. Central Oregon wages are not keeping up with the West Coast rate of inflation, he said.

“We’ve seen no substantial gains in wages in Deschutes County the last three to four years,” Runberg said.

Central Oregon can also boost its resistance to future recessions by having a broader economic base, Runberg said. That’s already happened since the Great Recession, he said. “We have seen exceptional growth in the lifestyle sector,” he said. “Lifestyle sector” is a term that Runberg applies to a range of professional work, usually done remotely or through travel outside Central Oregon. The category of business with the highest rate of startups is restaurants, he said, but that is followed closely by management, scientific and consulting services.

Deschutes County is no longer a tourism-driven or construction-driven economy, Runberg said. The GDP growth Deschutes County posted in 2016 came from banking, buying and selling real estate, professional services and manufacturing, he said. “We have no boom industry,” he said.

— Reporter: 541-617-7860, kmclaughlin@bendbulletin.com