Can a Small Center Do Big Forecasts? Northwest Economic Research Center College of Urban and Public Affairs Oregon Vocational Rehabilitation Services (VR) assists youth and adults with disabilities to obtain, maintain, or advance employment. VR provides personalized services to program participants through its network of field offices, and partners with local businesses and organizations to create opportunities. The Northwest Economic Research Center (NERC) was asked to study the effect of program participation, and calculate the long-term return on investment of VR funding. Ron Barcikowske and David Ritacco. Can a Small Center Do Big Forecasts?

Our History Officially opened in September 2011. The concept for NERC has been in the works for over 15 years. Modeled on centers of the Association for University Business and Economic Research (AUBER) Half time Director, Quarter time Assistant Director, 2 Full-time Senior Economists, 2 to 3 Graduate Students at 0.15 FTE for 9 months and 0.50 FTE for summer. Budget Assistance from Econ Dept Manager. Occasional assistance from faculty – sometimes good, sometimes bad.

Poor Man’s Forecasting State and MSA Coincident and Leading Economic Indicators already exist. Except for IHS Global Insight and Moody’s Analytics, no other economic forecasts for Portland MSA are as extensive.

Can NERC Produce a Better Forecast Compared to National Firms? NO…But we can come close. Approach: Build a structural/causal econometric model that is granular in jobs, income, housing. Do not reinvent the wheel. Use methodology from Oregon state forecasting model.

What if I Have No Money? Get Money and Keep Costs Down How to get money Find Angel investors – one’s that have both need and money Utilities (IRP: Integrated Resource Planning), Ports, Counties, Cities, Banks, Regional Govts (METRO), Transportation,… Keep Costs Down Smart Graduate Students desperate for experience Cheap to free data inputs into the forecast model IRP: Integrated Resource Planning

Proposals to Angel Investors Show them what you will deliver (forecasts outputs on later slides) Besides the general forecast, set up side deals that are unique to their needs (e.g., general forecast on population, side deal on forecast headship rates) Money to build the model and sponsor/subscribers to keep it going: IRP: Integrated Resource Planning

Keep Costs Down The Oregon state model uses IHS Global Insight data as inputs. We will use the Oregon state data as inputs into the Portland MSA economic forecast model. Public agency, they have to give us the data. Population Research Center (PRC) at PSU has historical data on counties and MSA. State office of economic analysis does county and MSA forecasts but last done in 2012. By June 2017, PRC will do forecasts updated every year. Near term, NERC adjusts 2012 forecast with recent data. Purchases: DataZoa for data portal, Moody’s for long term economic forecast (future plan to build CGE or DSGE model for long run)

Geographic Area The Population Forecast will cover the seven county region of the Portland-Vancouver-Hillsboro OR-WA Metropolitan Statistical Area. The Forecasted sub-regions will be the MSA as a whole and each of the seven counties.   The Economic Forecast will also include the seven county region of the Portland-Vancouver-Hillsboro OR-WA Metropolitan Statistical Area. The geographic sub-regions will be the MSA as a whole and each of the seven counties. Future Plans (Pipe Dream?) Beyond the high level forecasts for each sub-region, NERC will produce forecasts at the neighborhood level within sub-regions as data availability permits.

Time Period The Population Forecast will cover 50 years in five (5) year increments and an annual forecast for the first five (5) years out.   The Economic Forecast will cover 40 years, with a quarterly forecast for the first ten 10 years, annual forecasts for the first 20 years, and five (5) year increments for the last 20 years of the forecast period.

Forecast Outputs The Population Forecast will be produced by gender and age.   Key outputs of the Economic Forecast will be employment by industry (see below), personal income and its components, and a regional overall price index of goods and services. Total Private Public Construction Manufacturing Durable Manufacturing Wood Products Metals and Machinery Computer and Electronics Transportation Equipment Other Durables Nondurable Manufacturing Food Manufacturing Other Nondurables

Forecast Outputs Trade, Transportation, and Utilities Retail Trade Wholesale Trade Transportation, Warehousing, and Utilities Information Financial Activities Professional and Business Services Educational Services Health Care and Social Services Leisure and Hospitality Other Services Government Federal State (breakout education) Local (breakout education) Some of these employment categories will be further broken down at the county level according to the North American Industrial Classification System (NAICS) categories, but some categories may be too small to be useful for forecasting purposes.

NERC offers superior value to its clients by combining the latest in analytical techniques from the academic world with practical, immediately-implementable recommendations that can be understood by policymakers of all types.

Northwest Economic Research Center College of Urban and Public Affairs Contact Info Northwest Economic Research Center http://www.pdx.edu/nerc/ nerc@pdx.edu Phone: 503-725-8167 Fax: 503-725-5199 Mailing address: Northwest Economic Research Center College of Urban and Public Affairs Portland State University PO Box 751 Portland, OR 97207-0751 Street address: 530A Urban Center 506 SW Mill St. Portland, OR 97201 17