Restaurant sector goes on a hiring spree

PORTLAND — Oregon's job growth in recent years has been propelled by home builders, goods makers and health care providers.

Now, it's being driven by an industry that builds menus, mixes drinks and cures the blues.

Oregon's unemployment rate dropped from 5.3 percent to 5.2 percent in March, and the state's employers added 2,000 seasonally adjusted jobs, the Oregon Employment Department said.

The figures indicate the state's economy grew during the first quarter of 2007 at a slow but steady pace, improving on its relatively flat performance during the second half of 2006, economists said.

But unlike last year, when construction and manufacturing fueled growth, the state's leisure and hospitality industry led the way in year-over-year employment growth, adding 7,000 seasonally adjusted jobs over the past 12 months, a 4.3 percent growth rate.

By comparison, over the same period, the state's nonfarm payroll grew by 23,900 jobs, or 1.4 percent.

The leisure and hospitality sector — which includes hotels, casinos, restaurants and bars — now accounts for nearly one in 10 nonfarm jobs in Oregon, reflecting a gradual increase over several decades. Nearly all of its growth over the past year has taken place in eating and drinking establishments, which have added 7,300 jobs since March 2006.

Industry officials and economists say population growth, personal-income growth and a shift in how consumers choose to spend their money are driving the hiring spree. Consumers spent 44 percent of their food budget eating out in 2005, up from 40 percent in 1997, according to the latest data available from the U.S. Bureau of Labor Statistics.

"What we're finding is that with people working so much, they're not spending their dollars in grocery stores as much anymore," said Chris Handford, who in February opened District, a bar and restaurant in Portland's Pearl District. The restaurant, with 10 employees, caters to working professionals with a menu made up of drink and food items costing $8 apiece.

Portland's reputation as a city with good eats draws people out as well. Cable TV's Food Network recently named Portland its "Delicious Destination of the Year." The National Restaurant Association projects a 6.1 percent sales growth for the state's $5 billion full-service restaurant industry in 2007 — higher than its projected 5.1 percent growth nationwide.

"The fact is, eating-out dollars continue to go up and not down," said Evan Evans, vice president of field marketing for Papa Murphy's International, based in Vancouver.

The 976-store pizza chain plans to open 160 to 170 new stores this year nationwide, Evans said. The chain targets the busy dual-income earning family with pre-made pizzas that can be finished quickly at home.

A good economy helps, too, industry officials say, and the state's latest employment report suggests its economy might be resuming its slow expansion. Last month's nonfarm job growth in Oregon followed a revised gain of 3,500 jobs in February. State officials revised the February number downward from a previous estimated gain of 7,000.

Oregon's trade, transportation, and utilities industry drove the growth in March with an addition of 2,400 jobs. Manufacturers ended six consecutive months of seasonally adjusted losses by posting a 500-job gain.

The construction sector, which grew by 10 percent in both 2005 and 2006, added 300 jobs in March and has added only 1,700 over 12 months.

Still, economists are seeing signs that could spell trouble for other employers, even restaurants.

"There's some weakness in construction and manufacturing, and that could take awhile to filter out into the rest of the economy," said Art Ayre, an employment economist with the state. He noted recent numbers do not take into account 750 layoffs at Portland truck maker Freightliner, which took place March 30.