Oregon — Manufacturing in Oregon, long a cornerstone of the state’s economy, continues to experience sustained job losses in 2025. While the sector has gone through cycles of expansion and contraction over the past two decades, its share of total employment has gradually declined, and recent trends point to renewed pressure.
Manufacturing employment fell steadily through the third quarter of 2025. Although there was a brief increase in manufacturing hours worked during the second quarter—coinciding with initial tariff increase announcements—the improvement proved short-lived. The combination of declining hours worked per week and ongoing job losses raises concerns about the sector’s near-term outlook.
Oregon’s exposure to manufacturing volatility is amplified by its higher reliance on the sector compared to the nation as a whole. Over the past 12 months, manufacturing accounted for 9.1% of Oregon’s total nonfarm employment, compared with 8.0% nationally. This larger footprint makes the state more sensitive to changes in trade policy and global market conditions, which may help explain why manufacturing hours worked have declined in Oregon while remaining relatively steady nationwide.
National indicators offer mixed signals. The Institute for Supply Management’s Manufacturing Purchasing Managers’ Index (PMI), which tracks new orders, production, employment, supplier deliveries, and inventories, averaged 48.8 in the third quarter, up slightly from 48.5 in the second quarter. While readings below 50 indicate contraction, the increase suggests that U.S. manufacturing activity is not worsening and remains well above levels typically seen during recessions.
Semiconductors and other electronic components remain a critical, though challenged, segment of Oregon manufacturing. Employment in the industry has declined since peaking in 2022, with losses continuing through the first half of 2025. A modest uptick in early summer hinted at possible stabilization, but layoffs reported later in the year are expected to push employment lower again.
Industry structure is also shifting. The number of semiconductor manufacturing establishments reached a recent high in late 2024 but stalled in early 2025, when Oregon lost several facilities. Employment trends are not tightly tied to establishment counts, suggesting job losses may reflect changing production methods, automation, or broader industry realignment rather than a wholesale collapse of the sector.
Market-based indicators present a more optimistic contrast. The Philadelphia Semiconductor Index, which tracks major semiconductor and equipment manufacturers, fell sharply early in 2025 amid trade uncertainty but rebounded strongly beginning in late spring. The index continued climbing through the third quarter, reaching new highs by October, potentially signaling improving confidence and a more stable trade environment.
Overall, Oregon’s manufacturing sector remains under strain in 2025, but the data suggest a period of adjustment rather than a deep contraction, with stabilization possible if trade conditions and broader economic trends continue to improve.
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