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PNC Market Outlook shows moderate economic growth
By Kalea Hall
YOUNGSTOWN
PNC Bank economist Mekael Teshome is seeing consistent moderate growth in Northeast Ohio’s economy.
“We are expecting about the same rate of growth this year as last year,” Teshome said.
Northeast Ohio – Cleveland, Akron, Canton and Youngstown – will see a boost in jobs from the elevated auto sales, which leads to gains in production, employment and investment in the region, according to PNC’s recently released Market Outlook for the region.
Health care is also leading to job growth. The region’s aging population increases the need for more service jobs, the outlook says.
Growth in the region would have been stronger had there not been layoffs in the metals and energy industries. A weakness in both industries led to the layoffs.
PNC also projects median household income will increase into 2017.
“We have a tighter labor market, which will help push up wages,” Teshome said. “We aren’t expecting major jumps, but we do think workers will get better pay increases this year.”
But income growth will continue to remain lower than the rest of the nation. Currently, the NEO median income is about 9 percent lower than the national average.
PNC also expects to see home sales continue to rise slightly into 2017. Demand mixed with affordability, low mortgage rates, easier access to credit and a continued improvement in the labor market are all factors in the rise.
Continued loss in the region’s population will lead to a below-average job-growth performance.
PNC’s report says Northeast Ohio’s economy is at “cruising speed.”
The jobless rate is expected to continue to decline to about 4.5 percent in the fourth quarter of 2016 from 4.8 percent in the fourth quarter of 2015.
Earlier this year, there was talk of a recession because of volatility in the stock market, but PNC economists believed the risk to be low.
“A lot of the core drivers for the U.S. economy are still intact,” Teshome said. “Consumers are in better shape financially.”