According to a Dayton Business Journal survey of local business executives, the local economy improved in 2011. Meanwhile, a local research firm and trends point to a challenging 2012.
Since economic conditions usually affect politics, it is worth our while to look at Dayton’s economy in 2011, trends leading up to the present, and the future.
As for the survey, the Dayton Business Journal polled area executives. Fifty-three percent of those surveyed said 2011 was a better year for their businesses than 2010. Sixteen percent indicated no appreciable change while 31% said 2011 was worse for their companies.
The Journal concluded, “Such sentiments reflect the unclear state of our economy.”
However, James Investment Research—an investment research firm based in Beavercreek—sees a probable economic downturn in 2012 due in large part to current domestic economic conditions and the souring conditions in Europe.
While the local unemployment rate has dipped to 8.3% in November, other statistics indicate that this trend might not be as encouraging as it seems.
The Bureau of Labor Statistics shows both the civilian labor force and total employment declining. In June of this year, the Dayton-area labor force numbered 415,900 with 374,300 employed. This amounted to a 10% unemployment rate. In October—the last month for which the BLS published data—the labor force was only 410,900 while 373,000 of those were employed, leading to a 9.2% unemployment rate.
While the unemployment rate improved, it appears to have improved in large part because fewer Daytonians were in the job market.
Other BLS data shows a gradual decline in both labor force participation and employment in Dayton dating back to the beginning of the century. During most of the 2000s, the unemployment rate remained relatively steady due partly to positive national economic growth, but also because labor force participation declined more rapidly than total employment.
In 2012, the local economy could face a challenge from defense cuts, especially now that the Iraq War has reached its end and with the Afghan War due for the same fate.
Still, there are reasons for optimism. Restructuring of defense projects may actually bring additional jobs to the area, most notably UAV testing. Likewise, the State of Ohio’s improving fiscal picture offers hope. Now that the state budget is balanced, state taxes are less likely to increase. Meanwhile, Ohio has embarked on a tax break program to keep jobs in the state and to woo new companies.
Overall, the prognosis appears to be, as the Dayton Business Journal concludes, uncertain. Economic conditions around the country will certainly play a role in 2012’s high profile political showdowns, most notably the race for the White House.