Dayton Metropolitan Economy in Context

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Dayton MetropolitanEconomy in Context

• Richard Stock, PhD.
• Business Research Group
• University of Dayton

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State of the Dayton Metro Area(in December Each
Year, 2000-2014)

• Dayton lost 32,400 jobs in the two year period
  from December, 2007 to December, 2009.
• It has recovered 12,900 of those jobs in the last
  five years

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State of the Dayton Metro Area Last 4 Years(in
December Each Year, 2009-2014)

• Growth was steady in the December 2009 to
  December 2012 period.
• Stagnation in 2013 and early 2014 has been
  reversed in last few months

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Total Employment Index Dayton and Cincinnati
Metros compared to Ohio and the United States,
Dec. 2000-2014
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Manufacturing Employment Index Dayton and
Cincinnati Metros compared to Ohio and the U.S.,
Dec. 2000-2014
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Wholesale Employment Index Dayton and Cincinnati
Metros compared to Ohio and the U.S., Dec.
2000-2014
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Retail Employment Index Dayton and Cincinnati
Metros compared to Ohio and the U.S., Dec.
2000-2014
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Transportation and Utilities Employment Index
Dayton and Cincinnati Metros compared to Ohio
and the United States, December 2000-2014
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Information Employment Index Dayton and
Cincinnati Metros compared to Ohio and the United
States, December 2000-2014
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Financial Activities Employment Index Dayton
and Cincinnati Metros compared to Ohio and the
United States, December 2000-2014
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Prof. Bus. Serv. Employment Index Dayton and
Cincinnati Metros compared to Ohio and the United
States, December 2000-2014
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Education Health Services Employment Index
Dayton and Cincinnati Metros compared to Ohio
and the United States, December 2000-2014
13
Health Services Social Assistance Employment
Index Dayton and Cincinnati Metros compared to
Ohio and the United States, December 2000-2014
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Leisure Hospitality Employment Index Dayton
and Cincinnati Metros compared to Ohio and the
United States, December 2000-2014
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Government Employment Index Dayton and
Cincinnati Metros compared to Ohio and the United
States, December 2000-2014
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Federal Govt. Employment Index Dayton and
Cincinnati Metros compared to Ohio and the United
States, December 2000-2014
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Local Govt. Employment Index Dayton and
Cincinnati Metros compared to Ohio and the United
States, December 2000-2014
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The Income Piece
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Average Weekly Earnings in Dayton and Cincinnati
relative to Ohio and U.S., December 2007-2014
(2014 Constant Dollars)
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Relationship to National Economy
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Cyclical factors

• How closely linked is the Dayton Economy to the
  National Economy?
• From January, 2004 to December, 2014, 92 of
  variation in monthly Dayton Metro Area
  unemployment rate can be explained by variation
  in the U.S unemployment rate

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United States, Dayton Metropolitan Area Monthly
Unemployment Rates, January 2004-December 2014
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United States, Dayton Metropolitan Area Monthly
Unemployment Rates, September 2007-December 2014
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Number of Unemployed in Dayton Metropolitan
Areas, 1990-December 2014
From the height of unemployment, 33,949 fewer
people unemployed but 20,129 fewer in work force
than in Jan 2010 and only 13,820 more jobs
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Forecasting the Next 3 years

• Note that the Dayton Metropolitan Areas has
  mirrored the Country as a whole closely in the
  last few years.
• What are the implications of the National
  Economic Forecast?
• Federal Government and Local Employment Declines
  Have Already Taken a Toll. Are we done?

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Survey of Professional Forecasters, Philadelphia
Federal Reserve Bank (1rd Quarter Estimates)
  Unemployment Rate () CPI Inflation Rate () CPI Inflation Rate ()
Real GDP () Unemployment Rate () Headline Core
Quarterly data Quarterly data Quarterly data    
2015Q1 2.7 5.6 -1.4 1.3
2015Q2 3.0 5.5 1.6 1.7
2015Q3 2.8 5.4 1.9 1.8
2015Q4 2.8 5.2 2.0 1.8
2016Q1 2.9 5.2 2.1 1.9

Annual average data Annual average data Annual average data    
2015 3.2 5.4 1.1 1.7
2016 2.9 5.1 2.1 1.9
2017 2.7 5.0 2.3 2.1
2018 2.7 4.9
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Implications of National Forecast for the Dayton
Metropolitan Economy
  United States United States Dayton Metro Dayton Metro
Real GDP () Unemployment Rate Unemployment Rate Number of Unemployed
Quarterly data Quarterly data Quarterly data    
2015Q1 2.7 5.6 4.5 17,700
2015Q2 3.0 5.5 4.5 17,700
2015Q3 2.8 5.4 4.5 17,700
2015Q4 2.8 5.2 4.4 17,100
2016Q1 2.9 5.2 4.4 17,100

Annual average data Annual average data Annual average data    
2015 3.2 5.4 4.5 17,600
2016 2.9 5.1 4.3 16,500
2017 2.7 5.0 4.3 16,500
2018 2.7 4.9 4.2 15,900
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Defense Budget Constraints

• Number of Jobs Linked to Wright Patterson Air
  Force Base Activities 25,000 to 30,000
• Cuts are likely to be program specific for
  particular big ticket items, but there has
  already been an impact locally at Federal
  Government and Professional and Technical Service
  employment level.
• A Republican Congress is NO Guarantee of a
  loosening in Defense Budget constraints.
• Assuming a 10 drop in WPAFB related employment
  over a 3 to 4 year period, that implies 2500 to
  3000 fewer jobs or an annual impact of about a
  1000 jobs.
• It continues to represents a head wind on local
  job growth

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The Good News

• Fuyao Glass 1000, Early 2015
• Prologis PG Distribution Center, 800 Early 2015
• Emerson Climate Technologies Innovation Center
  50 End of 2015

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Summary

• The local economys rebound stalled out over 2013
  and early 2014 due to declines in defense related
  professional and technical services employment
  BUT NOW
• Encouraging trends in Manufacturing,
  Transportation/Utilities, Professional Business
  Services, Health Care and Govt Employment
• The unemployment rate remains below National
  Rates because of continued decline in the
  Civilian Labor Force
• Defense spending cuts will continue to create
  problems for WPAFB associated work.
• Job Growth may accelerate due to maturing
  economic development projects