Portland-area residents and businesses are facing mounting economic challenges, according to the latest annual “State of the Economy” report from the Portland Metro Chamber in partnership with ECOnorthwest. Released on February 12, 2026, the report paints a sobering picture: nearly 9,000 jobs were lost across the region in 2025—among the worst declines nationwide—and multifamily housing construction has plummeted to its lowest level in over a decade. This downturn signals deeper, structural issues that threaten Portland’s long-term vitality.

The Portland metro area shed approximately 8,800 to 9,000 jobs in 2025, a decline ranking fourth worst among major U.S. metro regions ([opb.org](https://www.opb.org/article/2026/02/12/portland-economy-high-housing-costs/?utm_source=openai)). At the same time, population growth has stalled. While births still outpace deaths, the natural increase is shrinking, and without robust international in‑migration—which now faces political headwinds—the region’s growth outlook is precarious ([opb.org](https://www.opb.org/article/2026/02/12/portland-economy-high-housing-costs/?utm_source=openai)).

Housing indicators are equally dire. Only 656 multifamily housing units were in the development pipeline in 2025—a stark drop from roughly 850 units in 2024 and more than 2,000 in 2023 ([opb.org](https://www.opb.org/article/2026/02/12/portland-economy-high-housing-costs/?utm_source=openai)). Other analyses suggest Portland’s multifamily permitting activity may be even lower, with projections pointing to roughly 648 units—a collapse tied to permit delays, high development fees, and regulatory inefficiencies ([christensen-cre.com](https://www.christensen-cre.com/research/building-permit-costs-and-timelines-impact-on-portlands-multifamily-development?utm_source=openai)). This decline has severe implications for housing availability and affordability, especially as job losses deepen socioeconomic strains.

Downtown Portland shows mixed signs. Foot traffic rebounded during the summer—among the strongest levels since before the pandemic—but office vacancy remains at historic highs, with as much as 10.2 million square feet of vacant space Downtown ([kxl.com](https://www.kxl.com/portland-metro-chamber-warns-region-in-economic-emergency-cites-job-losses-and-high-tax-burden/?utm_source=openai)). These trends reflect a sustained shift in work patterns and weakened central city commercial demand.

Portland also grapples with a competitive disadvantage in business taxation: Multnomah County now ranks highest in the nation for business taxes and second-highest for personal income tax, just behind New York City ([kxl.com](https://www.kxl.com/portland-metro-chamber-warns-region-in-economic-emergency-cites-job-losses-and-high-tax-burden/?utm_source=openai)). As Portland contributes a disproportionate share of state economic output—and tax revenue—legislative and policy reforms may be vital to preserve its role in supporting statewide services ([portlandmetrochamber.com](https://portlandmetrochamber.com/resources/2026-state-legislative-action-plan/?utm_source=openai)).

Why this matters
For communities like Longview, Kelso, and broader Cowlitz County, economic health in Portland matters. As regional economic engines falter, ripple effects come in the form of weakened labor markets, rising housing costs, and strained state and local funding for public services. If Portland’s economic decline continues, the strain will stretch across southwest Washington via shared labor pools, housing demand, and state-supported infrastructure. Strengthening Portland’s resilience is thus not just metropolitan necessity—it is regional imperative.

Outlook and local relevance
Despite grim indicators, the report urges coordinated action: policy reforms to reduce permitting delays, lower development fees, and tax competitiveness; strategic alignment between public and private sectors to spur job creation and attract investment; and expanded affordable housing production. While Portland may offer more tools and resources for addressing these challenges, local jurisdictions should remain alert. Encouraging housing development, streamlining local processes, and planning for shifting economic patterns will boost community resilience even amid regional disruption.

In a region where economies overlap and communities are interlinked, Portland’s structural economic trajectory becomes everyone’s concern.