Survey finds low confidence in northern Ohio economyPublished: 11/21/13 @ 12:00
By tom mcparland
A recent economic survey by Huntington Bank shows consumer confidence in the northern Ohio economy has suffered over the past year, while the real-estate market has picked up steam.
George Mokrzan, the bank’s director of economics, said consumers are responding to an overall slowdown in the region’s manufacturing sector after a ramp-up in the early recovery from the Great Recession.
“Coming off those big numbers, even a moderation [in production] is going to have an impact,” he said.
Mokrzan said a troubled world economy and a natural leveling off of production had a weakening effect on the economy in northern Ohio, which includes Canton, Akron, Youngstown, Cleveland and Toledo.
In the survey, just 43 percent of consumers expected the local economy to improve in the coming year, down from 50 percent last year. On par with last year, 40 percent of respondents thought their economy was better than a year ago.
Both figures were below the overall average for the Midwest states surveyed.
While still below the overall average, 53 percent of northern Ohio respondents said the real-estate market had improved, up 15 percentage points from last year. That jump exceeded a similar spike in the overall results.
But consumers in the region still plan to spend less on home improvements than residents in other Midwest regions.
“It’s a weaker economy compared to other areas in the last year,” Mokrzan said.
Northern Ohio consumers also plan to spend less on vacations and holiday gifts than their counterparts in many of the surrounding regions, the survey found.
George Zeller, a Cleveland-based economist, said a slow recovery from the recession could also have an eroding effect on consumer confidence in northern Ohio, citing bleak job growth, low wages and cuts to government spending.
“We need to start robust job growth, and it just isn’t there,” he said.
Unlike the rest of the state, however, the Mahoning Valley and surrounding counties of Trumbull and Columbiana are benefiting from a post-recession shift in manufacturing that has favored the auto and energy sectors here.
The end of old manufacturing and weak competition from abroad have made way for high-technology auto production with low labor costs, Mokrzan said. Raw production of energy has also increased, resulting in spillover to other supporting industries, he added.
“The actual competitive environment is very different from what it was before the recession,” Mokrzan said.
That has helped with employment in the Mahoning Valley, Zeller said, adding that layoffs have “not been nearly as severe as in the rest of the state.”
Still, as the region tries to regain jobs lost in the recession and before, economic recovery remains tied to manufacturing success.
“That is the main driver of the recovery,” Zeller said.
For northern Ohio, Mokrzan doesn’t expect slow manufacturing rates to continue in the long term, adding that he expects manufacturing to pick up.