Our Area Weathered The Storm Fairly Well

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Our Area Weathered The Storm Fairly Well

Now that some of the worst economic news seems to be over, it is instructive to look at how Cincinnati did over the past few years. Our Economics Center looked at indicators critical to the well-being of a region. We selected eight metro areas for comparison: Cincinnati, Cleveland, Pittsburg, Minneapolis, Columbus, Indianapolis, Detroit, Memphis and Salt Lake City. We also compared the Cincinnati metropolitan area to the nation as a whole.

The good news is that for the last four years the population of Cincinnati metropolitan area has grown at a faster rate than the national average. More importantly, our population grew faster in an area that really matters -- those 25 years and older who have a college degree. Only Memphis in our comparison group grew faster in this category. The growth in the number of college educated adults is advantageous because 21st century jobs will require higher level skills. Furthermore, as jobs requirements change quickly, workers with higher levels of education adapt more quickly to these changes. The size and quality of Cincinnati’s workforce will be key determinants in how we will compete over the next decades.

Since 2006 until mid-2009, housing prices decreased in the U.S. by 23 percent, most of which occurred after 2008. Salt Lake City is the notable exception where housing prices increased by 10 percent. In the remainder of our comparison group, Cincinnati’s 18 percent decrease in housing prices was right in the middle. Pittsburgh (-2%), Indianapolis (-10%), and Columbus (-14%) did better than Cincinnati. Minneapolis (-23%), Memphis (-24%), Cleveland (-35%), and Detroit (- 41%) did worse. This story has two sides. Cincinnati avoided some of the strong price decreases in housing prices during the 2006-2009 period, but it didn’t experience the strong price increases from 2002-2005 – the pendulum swing was more moderate.

This relative moderation is due partly to the industrial makeup of our economy. Except for Indianapolis, Cincinnati is more industrially diverse than all of the other eight comparison metros. This seems to protect us from the big downturns and dampens the upturns. However, it hasn’t protected us from some disappointing employment statistics. Nationally, we lost about three percent from 2006 to 2009. Compared to the nation, Cincinnati did worse, losing 3.8 percent of its employment, probably because our region has an above average proportion of its workforce employed in the manufacturing sector. Manufacturing was hit hard during 2006 to 2009 falling by 16 percent nationally, five times more than the decrease in overall employment. Some economists have forecasted an uptick in manufacturing, and our concentration in this industry may be good news for the region in the near future.