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CINCINNATI, OHIO MSA | THIRD QUARTER, 2014 Cincinnati – Poised for Continued Growth The Cincinnati metro area’s recovery continues to gain steam as strong growth in the education and healthcare sectors is supplemented by strong and growing employment in the manufacturing and trade, transportation, and utilities sectors. A highly educated workforce, diverse economy, and the presence of multiple Fortune 500 company headquarters positions the metro area for long-term growth. Cincinnati’s unemployment rate sits at 5.2%, nearly a percentage point lower than the national rate Percent 12 6 — Cincinnati — Ohio — United States — Nearby metro average 4 ■ Recession 10 8 2 0 2000 2002 2004 2006 2008 2010 2012 2014 UNEMPLOYMENT RATE The unemployment rate in the Cincinnati metro area has dropped to 5.2 percent, its lowest level since unemployment peaked at 10 percent in 2009. The region’s continued employment recovery is tied to highgrowth, high-demand sectors. A relatively large share of the metro area’s employment is in sectors such as professional and business services, education and health services, and skilled manufacturing, which are benefiting from the national recovery. The region also benefits from the large percentage of its workforce in the consumer marketing sector. Source: Bureau of Labor Statistics/Haver Analytics. Per capita GDP continues to grow, but has yet to recover to its pre-recession level Index, 2007=100 104 — Cincinnati — Ohio — United States — Nearby metro average 100 96 92 ■ Recession GROSS DOMESTIC PRODUCT Per capita GDP in the Cincinnati metro area has yet to reach its pre-recession level, though as of June 2012 it has exceeded the performance of the nation and nearby metro areas. However, per capita GDP in Cincinnati remains substantially lower than in the state of Ohio: 1.0 percent below its 2007 level in the metro area and 0.6 percent above its 2007 level statewide. 88 84 2001 2003 2005 2007 2009 2011 2013 Source: Bureau of Economic Analysis/Haver Analytics. Cincinnati’s housing market continues to advance, but lags the national average HOUSING PRICES Year-over-year percent change 15 10 5 0 –5 –10 –15 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Zillow.com/Haver Analytics. — Cincinnati — Ohio — United States — Nearby metro average ■ Recession The Cincinnati housing market continues to advance, albeit at a pace slower than the national average. As of June 2014, prices were increasing in the Cincinnati metro area at an annual rate of approximately 4.0 percent, compared to 6.3 percent nationally and 8.3 percent statewide. Despite growth in employment, the Cincinnati housing market has been sluggish due to weak income growth, slow rates of household formation, and several factors driving continued strength in the rental housing market. However, growth is expected to slowly accelerate in the metro area as employment strengthens and homebuilding increases in response to a shrinking supply of homes for sale. CINCINNATI, OHIO MSA FOURTH DISTRICT METRO MIX YOUR DISTRICT, YOUR DATA THIRD QUARTER, 2014 EMPLOYMENT AND INDUSTRIAL SECTORS Employment growth remains strong, but has yet to return to pre-recession levels EMPLOYMENT Index, 2007: M12=100 102 96 — Cincinnati — Ohio — United States — Nearby metro average 94 ■ Recession 100 98 Job growth in the Cincinnati metro area remains strong as the region benefits from its highly educated workforce. While the region has yet to return to its pre-recession level of employment, it continues to experience strong growth in the professional and business services, manufacturing, and healthcare sectors. The rate at which employment is recovering, approximately 1.5 percent annually through the end of 2013, remains in line with employment growth at both the state and national levels, but is slightly below that of nearby metro areas. However, the outlook for continued growth in employment remains optimistic. 92 90 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Bureau of Labor Statistics. Growth in the Cincinnati metro area is strongest in the healthcare sector EMPLOYMENT GROWTH BY SECTOR Growth in the Cincinnati metro area is strongest in the healthcare sector, with 2.4 percent year-over-year growth. However, the professional and business services sector is poised for stronger growth in the future as General Electric recently broke ground on a $90 million operations center in the downtown area, which is expected to add 1,800 jobs in 2016. Additionally, capital spending is increasing in the metro area: Cincinnati Children’s Hospital is constructing a $180 million facility that will include research laboratories, imaging facilities, and space for conducting clinical trials; and Catholic Health Partners will build a $77 million headquarters that will add around 1,000 jobs when finished in mid-2016. Education and health services Construction — Cincinnati — Ohio — United States Financial activities Trade, transportation, and utilities Manufacturing Professional and business services Government Information –4 –3 – 2 – 1 0 1 2 Percentage change Source: Bureau of Labor Statistics. 3 4 5 The construction and education and healthcare sectors are in line with national growth Increasing employment growth Percent 3 Education and health services Trade, transportation, and utilities Construction 2 1 Financial activities Manufacturing 0 Professional and business services –1 –3 Larger share of metro’s overall employment Government –2 Information –4 0 5 Bureau of Labor Statistics. Source: FEDERAL RESERVE BANK of CLEVELAND 10 15 Percent 20 25 RELATIVE EMPLOYMENT GROWTH Ten Fortune 500 companies are headquartered in the Cincinnati metro area. On a per capita basis, this is more than New York, Los Angeles, or Chicago. The sector in Cincinnati that is growing the fastest—education and healthcare—is in line with national growth: 2.4 percent locally versus 4.0 percent nationally. Construction is also performing well as both commercial and residential real estate activity is growing; however, most growth on the residential side is in multifamily residential homes. While professional and business services is growing, it is severely lagging both the nation and state. Tightening in the government sector reflects local officials’ continued efforts to align expenditures with revenues. CINCINNATI, OHIO MSA FOURTH DISTRICT METRO MIX YOUR DISTRICT, YOUR DATA THIRD QUARTER, 2014 HOUSING MARKET Homebuilding in the Cincinnati metro area remains sluggish H OUSING PERMITS Index, 2007: M12=100, three-month moving average 300 — Cincinnati — Ohio — United States — Nearby metro Cincinnati average Average of ■nearby Recessionmetros United States 250 200 150 100 50 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Ohio Source: Census Bureau/Haver Analytics. Although above its post-recession lows, homebuilding in the Cincinnati metro area remains sluggish. By June 2014, building permits stood at approximately 59 percent of their pre-recession level. This is well below national performance (83 percent), but relatively in line with the state (67 percent). Nearby metro areas are expanding construction at 100 percent of pre-recession levels. The housing supply remains exceptionally tight, helping to prop up house prices. Multifamily vacancy rates remain low as apartment construction has yet to catch up with growth in regional demand. Two factors often cited for the slow resurgence of supply are tight credit conditions and a scarcity of skilled construction labor. CONSUMER FINANCES Consumers in the metro area have less mortgage, auto, and credit card debt per capita than the national average C ONSUMER DEBT Thousands of dollars 55 — Cincinnati — Ohio — United States — Nearby metro average 50 45 40 35 ■ Recession 30 25 20 2001 2003 2005 2007 2009 2011 2013 Since 2006, consumers in the Cincinnati metro area have less mortgage, auto, and credit card debt per capita than the national average. However, consumer indebtedness in the area still exceeds that of its nearby metro areas and the state of Ohio. The metro has actively sought to deleverage since the onset of the recession in late 2007 and has succeeded at a rate similar to that of the nation. Reasons for the debt decline include lower mortgage debt due to foreclosures and smaller average outstanding balances on revolving debt instruments, such as credit cards and home equity loans. Source: FRBNY Consumer Credit Panel. Credit card balances that were 90 or more days delinquent were approximately 3 percentage points lower than the national level C REDIT CARD DELINQUENCY RATES Percent of credit card balances delinquent 14 — Cincinnati — Ohio — United States — Nearby metro average 12 10 8 6 ■ Recession 4 2 0 2001 2003 2005 2007 2009 2011 2013 The credit card delinquency rate is an indicator of the financial health of households. The credit profile of the Cincinnati metro area remains much better than the nation’s and is in line with the state of Ohio. Declines in credit card delinquency rates continued through 2011, the latest period for which data is available. In 2011, the share of credit card balances that were 90 or more days delinquent was approximately 3 percentage points lower in Cincinnati than in the United States, and had fallen back to its pre-recession level. Source: FRBNY Consumer Credit Panel/Haver Analytics. FEDERAL RESERVE BANK of CLEVELAND CINCINNATI, OHIO MSA FOURTH DISTRICT METRO MIX YOUR DISTRICT, YOUR DATA THIRD QUARTER, 2014 INCOME Average weekly wages have yet to recover to pre-recession levels A VERAGE WEEKLY EARNINGS Dollars, three-month moving average In the Cincinnati metro area, average weekly wages fell from $846 in December 2007 to $785 in June 2011, and have yet to recover prerecession levels. Average wages in nearby metros and Ohio saw similar declines, and although they have recovered, they remain below those of the Cincinnati metro area. While significant growth continues in the professional and business services and education and healthcare sectors, wage growth has been muted as the oversupply of labor has kept pressure on wage growth across most sectors. However, this is expected to be a decreasing phenomenon as consumer demand continues to increase and employment levels rise across the metro area. 900 850 — Cincinnati — Ohio — United States — Nearby metro average 800 750 700 ■ Recession 650 600 2007 2008 2009 2010 2011 2012 2013 2014 Source: Bureau of Labor Statistics/Haver Analytics. The metro area’s recovery in income per capita outpaces the nation Thousands of dollars 46 45 44 43 42 41 40 39 38 37 36 2001 2003 2005 I NCOME PER CAPITA As employment has recovered from the recession, so has income per capita. In 2012, the metro area’s income per capita was $44,740, up about $2,000 since the recovery began. While it has not grown as rapidly as the state’s, the metro’s income growth has outpaced the nation and is comparable to nearby metros. The rise in income per capita is due to the metro area’s recovery of employment and the out-migration of retired people. — Cincinnati — Ohio — United States — Nearby metro average ■ Recession 2007 2009 2011 2013 Source: Bureau of Economic Analysis/Haver Analytics. DEMOGRAPHICS AND EDUCATION Cincinnati metro 2012 Population United States Change from 2009 2012 Change from 2009 2,128,603 +1.0% 313,914,000 +2.3% Adults with less than a high school diploma 10.7% -1.8% 14.1% -0.7% Adults with an undergraduate degree or higher 29.6% +1.1% 28.5% +0.6% 37.6 +0.7 years 37.4 +0.6 years $54,437 -5.5% $53,329 -4.4% Median age (years) Median household income CINCINNATI, OHIO According to 2012 Census estimates, Cincinnati is the 28th largest of the 381 metropolitan statistical areas in the United States. Sources: Census Population estimates; American Community Survey. All monthly figures are seasonally adjusted and all dollar figures are in current dollars. Several charts use indexed measures to facilitate comparisons across regions and have a reference line at 100. These numbers can be thought of as the percentages of pre-recession levels. If levels were growing before the recession, pre-recession indexes will be below 100; if levels were falling before the recession, pre-recession indexes will be above 100. Employment data in the Metro Mix come from the Quarterly Census of Employment and Wages, which we have found to be the earliest accurate source of the number of jobs in metro areas. The Federal Reserve Bank of Cleveland, including its branch offices in Cincinnati and Pittsburgh, serves the Fourth Federal Reserve District (Ohio, western Pennsylvania, the northern panhandle of West Virginia, and eastern Kentucky). www. clevelandfed.org FEDERAL RESERVE BANK of CLEVELAND SCAN FOR VIDEO
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