Toledo's leaders need to take measures to ensure the local economy does not slip.
The Editorial Board
Sat, 13 Jul 2019 04:00:00 GMT
The Federal Reserve of Cleveland's latest assessment of metro Toledo's economy shows it is tepid and fragile. To prevent a backslide, government and business leaders must continue efforts to diversify the local economy.
The local picture shows Toledo has bounced back from 2015 when the economy was slipping after a brief recovery from the Great Recession in 2008-2009. But for many factors in the assessment, Toledo has plateaued.
The number of jobs, unemployment rate, output per person, and median personal income in the latest measure are on par with 2015, according to the Fed report, which is updated every six months. Construction activity overall and house values are bright spots.
While the rebound from 2015 is nice, the local economy is not surging ahead as it should. For example, the latest jobless rate is 4.7 percent, about on par with its level the prior two years but much higher than the Ohio and United States rates. Employment has grown in manufacturing, construction, and financial services compared with the state and nation the past year, but it has trailed in other sectors, such as professional and business services.
Output per person, which is a measure of the value of goods and services produced divided by the number of people in the metro area, was flat in 2015, 2016, and 2017, the most recent year for which figures are available. This sour result was attributed by the Fed to the temporary shutdown of part of Fiat Chrysler's Toledo Jeep complex when the Cherokee production moved and before the Gladiator pickup production began.
That same measure increased during those years for Ohio and for the United States, and economists generally contend that a growing economy would show this ingredient expanding each year.
Income per capita locally barely increased in the latest year, well behind the boost shown in Ohio and the nation, the Fed report shows. Fortunately, the amount of debt and credit card-payment delinquencies in Toledo have steadied. Positive factors were housing prices and construction activity, though the former trailed the state and nation increases.
Overall, Toledo continues to have slower economic growth than the Cincinnati, Columbus, and Cleveland metro areas, says a Fed researcher who prepared the report.
That is confirmed by a separate report issued by the Ohio Department of Job and Family Services. It shows metro Toledo is expected to have the slowest employment growth in the next six months of any major Ohio city except Youngstown, where its General Motors plant has been shuttered. Toledo's projected job growth is 0.36 percent compared with 1.08 percent statewide.
Huntington Bank economist George Mokrzan said the Fed report shows metro Toledo is "hanging in there" and doesn't seem headed for a downturn. Smaller metro areas in the state, he says, have shown slower growth than the bigger areas.
The Fed assessment demonstrates how dependent metro Toledo remains on manufacturing, and in particular on the Jeep plant.
Efforts must be increased by local government and business officials, and economic development agencies, to diversify the economy to allow Toledo to grow more robustly and not face the hardship risks it does now from stumbles in a few economic sectors.