NE Ohio Economy Still Growing but at Slower Pace
PITTSBURGH — The economy of northeastern Ohio continues to gain momentum this year, and that momentum will carry through 2016, but at a slower pace, says the Economics Department of PNC Financial Services Group.
In its third-quarter “Northeast Ohio Market Outlook,” released Thursday, PNC sees the recovery continuing with “manufacturing remain[ing] the primary growth driver,” the economists say.
“Consumer finances nationwide are improving and this bodes well for the region’s manufacturers,” PNC writes, although the sector will not be as strong as it has been.
The collapse of energy prices in the first half of this year disrupted the drilling for and extraction of oil and natural gas in the Utica shale and that has hurt the demand for steel pipe, the economists say. Still, they foresee energy rebounding.
“The industry’s long-term prospects are positive,” the report states.
This rebound, however, won’t be enough to offset the loss of jobs in manufacturing but the resultant lower energy prices are boosting people’s real incomes. Lower energy prices have also helped to reduce the unemployment rate, which the PNC economists foresee “declining steadily and dipping below 5% in 2016.”
Also hurting manufacturing in the region is the strong dollar and weaker global economy that hurts exports, the economists note. Hindering the region’s economic growth overall is a stagnant population compared to a higher rate of growth in the United States as a whole.
On the bright side, U.S. auto production should hit 17.2 million this year, ”its strongest level in a decade and this will support production and income in the area,” the economists write.
Health care, finance and professional services will continue to contribute to a healthy regional economy.
In its forecast, the PNC economics department predicts U.S. employment will have grown 2.1% by year-end and another 1.7% by Dec. 31, 2016, while the number of jobs in the region will be 1.3% higher by year-end and 1.4% higher by Dec. 31, 2016.
Both the national and regional unemployment rates should drop to 5.3% by year-end and 4.9% by the end of 2016.
Median household income in 2014 in the United States was $53,100, should be $54,100 this year and $55,300 next year while median regional household income was $49,200 last year, should be $50,100 this year and $51,200 next year.
SOURCE: PNC Financial Services Group.
Copyright 2023 The Business Journal, Youngstown, Ohio.