PNC reports a slow down in Northeast Ohio economic growth

Staff report

YOUNGSTOWN

Northeast Ohio’s economic growth in the first six months of this year failed to meet expectations, as federal tax increases, cuts in government spending and weak income growth slowed things down, according to a report released Tuesday by PNC Bank.

Moderate setbacks in manufacturing, employment and consumer spending meant the first half of 2013 was largely flat compared with last year.

A number of positive signs remain heading into the remainder of the year, though.

Oil and gas drilling continues at a stable rate, which PNC said could generate new jobs, income and tax revenue. Auto sales are trending upward and are likely to keep doing so, the report said. Demand for housing continues as well, even as prices rise slowly.

The unemployment rate in the region, which includes the Cleveland, Akron, Canton and Youngstown metro areas, fluctuated between 7 percent and 7.2 percent — roughly unchanged from 2012.

PNC predicts that manufacturing will remain the region’s primary economic- growth driver. But thus far this year, employment growth in the sector has failed to keep pace with trends elsewhere in the country.

Personal-income growth, PNC reported, has tempered since last year. The bank’s long-term outlook for the region projects below- average income growth.

Demand for housing will remain strong, and prices are rising slowly, but for now, the bank cautioned that an older population, combined with slow wage growth, is unlikely to produce the kind of sales that would match pre-recession levels.

Still, PNC expects the region’s unemployment rate to decline to 6.7 percent sometime during the fourth quarter of this year, while things such as demand for health-care services among the area’s older population and more material orders from the nation’s oil-and-gas industry are expected to give income growth a boost and keep the economy on stable ground.