More Slow Growth Ahead for Cincinnati

A panel of local economists claim that there will be more slow growth ahead for Greater Cincinnati in the coming year. The areas that will improve include employment and economic activity. There is a five member panel that presented this information at the annual Cincinnati USA Partnership for Economic Development and the Northern Kentucky Chamber of Commerce ’s 2012 Regional Economic Outlook.

The group of experts that met expect that the Greater Cincinnati area will experience a 2.4 percent increase in local economic activity. If that is the case, it will be up from the 1.7 percent that was expected for this year in Greater Cincinnati and would be on par with the national estimated growth rate. Employment is also expected to improve by 1.4 percent next year, up from 1.1 percent this year, which would mean the creation of 13,900 jobs in the city. The manufacturing industry is expected to generate roughly 3,000 of those new jobs.

The Greater Cincinnati jobless rate is expected to fall from 9.1 percent this year to 8.7 percent next year but the report said the following:

“That is still quite high compared to the average unemployment rate of 4.4 percent during the decade prior to the recession.”

The construction industry in Greater Cincinnati will also improve, but will remain a far cry from what it was back in the early 2000’s. Experts are estimating that the construction of housing units will rise from 4,000 this year to 5,000 next year. At the very peak of the housing boom in Greater Cincinnati, the numbers were closer to 13,000.

“The issue is clear that unless the rate of population growth rises from its current historical average of 0.8 percent a year, the region cannot support building an additional 13,000 housing units annually,” the report said.

There were 80 local businesses surveyed, of which they claim that workers’ compensation, health care, and tax uncertainty along with the lack of access to qualified and skilled workers creates barriers in hiring processes.

“We have to recognize that these barriers may not be quickly overcome,” the committee wrote in its report. “As a result, uncertainty continues to loom large over the economy.”

The experts claim that the slow growth in the housing market and the employment realm will hold back the national economy’s growth rate in the coming year. They do however feel that the national unemployment rate will fall from 9.1 percent this year to 8.7 percent in 2012. They also believe that total employment should rise by 1.4 percent in 2012.

“There are several outcomes that could dramatically improve the results,” the economic advisory committee wrote in its report. “Key support could come from a reduction in uncertainty around oil and gasoline prices, health care costs and the tax structure. In addition, a reduction in overall level of government regulations would be beneficial. Unemployment will remain relatively high into 2012 with improvement in late 2012.”