BOARDMAN Valley's recovery will lag behind U.S., economist predicts
The Valley lost about 4,000 jobs in the past year, nearly all of them in manufacturing.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
BOARDMAN -- Expect the national economy to "come screaming back" to prosperity by early summer, with the Mahoning Valley chugging along a few months behind because of its heavy dependence on manufacturing.
That's what a Federal Reserve Bank of Cleveland economist and a local economic expert told business leaders attending the Youngstown/Warren Regional Chamber of Commerce 2001 Economic Forecast Breakfast today.
Speakers were Michael Bryan, who heads the Applied Microeconomics and Business Analysis divisions at the Cleveland bank, and Reid Dulberger, executive vice president of the Chamber.
Bryan used charts and graphs to illustrate some of the factors that led the National Bureau of Economic Research to declare Monday that the economic slowdown is a recession -- climbing unemployment, declining industrial production, plummeting consumer confidence.
When terrorists attacked New York City and Washington, D.C., in September, things got worse. "A bad scenario became a truly frightening one," he said.
Philosophy: Bryan argued, however, that the national economy has grown 300 percent since 1960 with occasional declines and recessions. He seemed to advocate what he calls the "gardener philosophy" -- the economy will work through the problems and emerge stronger, as it has in the past.
The Federal Reserve, with its attempts to halt the economic decline by dropping interest rates, has been following what Bryan calls the engineer philosophy -- "they want to get in and cause the economy to move more quickly."
While Bryan said he likes to avoid economic forecasting, he said it's likely that the nation's economic doldrums will continue, at least through the first quarter of 2002. "In the spring we'll see a little growth, and by early summer most economists think the economy will come screaming back and even exceed past performances," he said.
The recovery may be more drawn out for economies heavily dependent upon industry like the Mahoning Valley, he said, estimating that the manufacturing sector might be on the rise by fall.
Performance: Dulberger, reporting on the Valley's 2001 performance, said the region has seen its job totals drop by more than 4,000, about 2 percent, with nearly 100 percent of that drop resulting from cutbacks in manufacturing.
He said the region's business start-up totals for the past year were "terrible," and the number of local business bankruptcy filings is very high.
On the upside, however, Dulberger said new construction is continuing to grow the Valley, fueled lately by a number of new public school building projects under way.
The technology sector is growing, he said. The chamber lists 513 technology related companies in operation locally, with 5,436 employees, more than double the number of tech companies and workers the Valley had in 1993.
The chamber has 23 development projects under way this year, expected to create 776 jobs. The bad news, Dulberger noted, is that the number of projects and jobs are both lower than in recent years.
The good news, he noted, is that the $184.4 million which is being invested in those projects is well above the project totals for the past several years.