November 22, 2013
Ohio’s six biggest metropolitan areas are expected to experience slower economic growth this year, when all the numbers are tallied, and will lag the national average, according to a report released this week by the U.S. Conference of Mayors.
Cincinnati’s estimated growth rate of 1.3 percent for 2013 is the best in the state but only 128th out of 363 metro areas in the U.S., according to the report, prepared for the mayors by IHS Global Insight.
Akron was second in the state at 1.2 percent, ranked at 132nd nationally, and Columbus was third at 1.1 percent, coming in at 149th.
Toledo’s economy barely grew this year, coming in fourth in the state and 203rd in the nation.
Cleveland and Dayton, fifth and sixth in the state, are expected to lose ground this year. They were near the bottom of the national rankings at No. 275 and 319, respectively.
Overall, U.S. economic growth is expected to total 1.7 percent this year when adjusted for inflation; economic growth among the 363 metros should be slightly lower at 1.6 percent.
Ohio is not alone in reporting slower growth among its metro areas.
One-third of the nation’s metros will see no growth or will lose ground in 2013 compared with 73 in 2012, according to the report, and 38 percent will have growth of 1 percent or less.
By comparison, 290 metro areas had economic growth in 2012 and 265 in 2011. Nearly all metros should experience economic growth in 2014, the report said.
IHS economist Karl Kuykendall said Ohio’s metros, like much of the country, were hurt this year by cuts in federal spending coupled with the partial shutdown of the government in October.
“Broadly, Ohio isn’t unique in 2013,” he said.
But Bill LaFayette, owner of economic consulting firm Regionomics, thinks the problems go beyond the cuts in government spending.
“What it boils down to is problems with (consumer) confidence,” LaFayette said. That influences consumer spending, which accounts for about two-thirds of gross domestic product.
He said the government cuts will continue to be a factor into next year, but the real key is how the consumer is doing.
“The driver of the economy, ultimately, is the consumer and, to a certain extent, business investment,” he said.
Kuykendall said growth should be stronger next year, assuming there isn’t another government shutdown. He also is expecting the state’s economy to gain steam as exports pick up next year.
“Coming out of the recession, Ohio was growing at or above the national average, which is rare for the state,” he said.
Kenny McDonald, chief economic officer for Columbus 2020, the region’s economic-development arm, acknowledged a slowing of growth in central Ohio.
“We think ’13 was slower than ’11 and ’12 in some ways,” he said. “There was lots of pent-up demand from the recession” and that eased this year.
While growth has been slower this year, the number of business projects — which retain or create jobs — has picked up over the past few weeks, he said.
“We have more projects than we’ve ever had in our pipeline,” he said.
The mayors’ report also shows that the Cincinnati metro economy is gaining ground on Cleveland’s economy. Kuykendall said the Cincinnati economy should overtake Cleveland by the end of 2015 to become the largest metro in the state, and Columbus will pass Cleveland in about 10 years.
Separate federal data released yesterday show that the Columbus economy now has topped $100 billion in terms of the value of goods and services produced each year.