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CINCINNATI, OHIO MSA | MARCH 2016

Cincinnati – Sustained Growth from a Solid Foundation

The Cincinnati metro area’s economy continues to deliver strong economic results, particularly with growth in the leisure and hospitality and construction sectors.
These sectors, supported by a diversified manufacturing base, provide opportunities for the region to grow long into the future. Employment growth is strong and the
unemployment rate has declined to its lowest level in more than ten years, remaining among the lowest of the metro areas in the Fourth Federal Reserve District.
METRO AREA SNAPSHOT
Unemployment Rate

Median Home Values

One-year
change

January
2016

One-year
change

September
2015

One-year
change

2015:Q4

One-year
change

Cincinnati

4.6%

–0.1

$142,700

4.0%

1,010

2.1%

6.4%

+0.1

Ohio

4.8%

–0.3

$119,100

2.9%

5,260

1.2%

7.0%

+0.1

United States

5.0%

–0.6

$184,000

4.2%

139,893

2.0%

7.9%

+0.3

Nearby metro average

4.6%

–0.5

$125,060

4.8%

642

2.0%

6.5%

+0.0

Percent
12

6

— Cincinnati
— Ohio
— United States
— Nearby metro
average

4

■ Recession

10
8

2
2006

2008

2010

2012

2014

2016

Source: Bureau of Labor Statistics/Haver Analytics.

Modest population growth and faster output growth contributed to
Cincinnati’s per capita GDP growth
Index, 2007=100
104

98

— Cincinnati
— Ohio
— United States
— Nearby metro
average

96

■ Recession

102
100

94
92

Credit Card
Delinquency Rates

December
2015

In December 2015, Cincinnati’s unemployment rate sat at 4.6%

0

Payroll Employment

2006

2008

2010

2012

Source: Bureau of Economic Analysis/Haver Analytics.

2014

(thousands)

 UNEMPLOYMENT RATE

By the end of 2015, the unemployment rate in the Cincinnati metro area
stood at 4.6 percent, a slight increase from the 4.0 percent showing at
the end of the third quarter, but still lower than the national average (5.0
percent). The region remains uniquely positioned in industry sectors
that benefit from the national recovery, such as leisure and hospitality,
manufacturing, construction, and trade, transportation, and utilities.
The strong employment demand that the region is experiencing in the
skilled manufacturing and construction sectors is a result of pent-up
demand for manufactured goods in the aviation and auto sectors, and for
residential and nonresidential real estate construction. Cincinnati’s low
unemployment rate is in line with the average of nearby metro areas and
slightly lower than that of the state.

 GROSS DOMESTIC PRODUCT

	After a long recovery from the Great Recession, per capita GDP is stronger
in the Cincinnati metro area than in the nation, state, and nearby metro
areas. In 2014, the metro area’s per capita GDP stood approximately 2
percent above its pre-recession level. The relatively strong recovery that
has occurred in higher-paying sectors, such as professional and business
services, skilled manufacturing, and health services, and continued
investment in technology have helped to move the region’s total output
higher. The metro area’s population, like many others in the state of Ohio,
has continued to see weak population growth. Since July 2010, population
in the Cincinnati metro area has increased by approximately 1.5 percent,
as opposed to approximately 3.1 percent nationally. Modest population
growth coupled with faster growth in output helped to raise the metro
area’s per capita GDP.

CINCINNATI, OHIO MSA

FOURTH DISTRICT METRO MIX
YOUR DISTRICT, YOUR DATA

MARCH 2016

EMPLOYMENT AND INDUSTRIAL SECTORS
Cincinnati has yet to recover its pre-recession employment levels, but job
growth remains solid

 EMPLOYMENT

Job growth in the Cincinnati metro area remains strong as the region
capitalizes on its highly educated and innovative workforce. Despite
these factors, however, the region has yet to return to its pre-recession
employment level. Through the end of the third quarter of 2015,
employment in the metro area stood approximately 0.5 percent below
its pre-recession level. This performance was in line with the rate
of recovery in Ohio, but lagged the recovery pace for the average of
nearby metro areas and the United States, which have seen increases of
approximately 1.5 percent and 3.0 percent, respectively. However, the
outlook remains good as multiple companies in the Cincinnati metro
area are expanding in order to accommodate larger workforces. For
example, General Electric’s US Global Operations Center is nearing
completion, which will provide an estimated 1,500 positions in fields
such as information technology, human resources, and finance.

Index, 2007: M12=100
104
102

— Cincinnati
— Ohio
— United States
— Nearby metro
average

100
98
96

■ Recession

94
92
90
2005

2007

2009

2011

2013

2015

Source: Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.

The leisure and hospitality sector led Cincinnati’s employment growth

 EMPLOYMENT GROWTH BY SECTOR

On a year-over-year basis, the Cincinnati metro area is experiencing
strong employment growth, most notably in the leisure and
hospitality, manufacturing, and construction sectors. Accounting
for approximately 12 percent of area employment, the leisure and
hospitality sector leads in growth and reflects the region’s push to
stimulate tourism and draw major events to the area. In response
to increased homebuilding, more people are being hired into the
residential construction sector. Additionally, commercial real estate
employment is also rising with increased industrial construction in
the downtown area. Employment growth in the manufacturing sector
is outpacing that of the state and nation. This growth is primarily in
response to the increased demand for parts coming from the auto
and aviation sectors. For example, GE Aviation plans to open a new
Additive Technology Center in the region to accommodate the
increased demand for engine production.

Leisure and hospitality
Manufacturing
Construction
Financial activities

— Cincinnati
— Ohio
— United States

Trade, transportation,
and utilities
Education and health services

■ Recession

Government
Professional and business
services

		 –1

0

1
2
3
Percent change

4

5

6

7

Source: Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.

All but one of Cincinnati’s major sectors continue to grow

 RELATIVE EMPLOYMENT GROWTH

Increasing
employment growth

Percent
7
6

Leisure and hospitality

5
4
3

Construction

Manufacturing
Financial activities

2

Trade, transportation,
and utilities
Education and health services

1

Professional and
business services

Government

0
–1
0
5
			

10
Percent

15

Source: Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.
FEDERAL RESERVE BANK of CLEVELAND

20

Larger
share of
metro’s overall
employment

	The professional and business services and the trade,
transportation, and utilities sectors account for the
largest shares of employment in the Cincinnati area.
From September 2014 to September 2015, professional
and business services employment was essentially flat
and trade, transportation, and utilities grew 2.0 percent.
Recent announcements regarding expanded facilities and
operations at area firms indicate expected employment
growth in these sectors. Stronger growth is occurring in
the manufacturing sector, with employment increasing at
a rate of 3.4 percent, likely a result of increased demand
from the aviation and auto parts suppliers around the
region.

CINCINNATI, OHIO MSA

FOURTH DISTRICT METRO MIX
YOUR DISTRICT, YOUR DATA

MARCH 2016

INCOME
Cincinnati’s strong per capita income growth tracks the national trend
	I NCOME PER CAPITA

Thousands of dollars
47
46

— Cincinnati
— Ohio
— United States
— Nearby metro
average

45
44
43
42

■ Recession

41
40
39

2006

2008

2010

2012

2014

Source: Bureau of Economic Analysis/Haver Analytics.

	The Cincinnati metro area and the nation continue to see stronger
income growth per capita than the state and nearby metros. Since
the end of the recession in June 2009, income per capita in the
Cincinnati metro area has increased by 4.6 percent. This is in line
with the national average, which has increased by 4.7 percent. The
metro area’s performance is attributed to income growth as a result
of employment expansion in relatively high-paying sectors, such
as professional and business services, skilled manufacturing, and
healthcare, while also contending with slowing population growth.
However, continued per capita income growth should stimulate
increased in-migration to the region in the future.

CONSUMER FINANCES
Throughout 2015, consumer debt levels in Cincinnati remained below
the national average
	C ONSUMER DEBT

Thousands of dollars
50

35

— Cincinnati
— Ohio
— United States
— Nearby metro
average

30

■ Recession

45
40

25
20

2005

2007

2009

2011

2013

2015

Source: Authors’ calculations from the Federal Reserve Bank of New York’s
Consumer Credit Panel/Equifax.

	Through the end of 2015, average consumer debt levels in the
Cincinnati metro area remained below the national average, but above
those of the state and nearby metro areas. Consumers in the metro have
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. However,
like the nation, state, and nearby metro areas, the decline in the level of
consumer indebtedness slowed to the point of remaining stable over
the last year. This is likely in response to growing demand for consumer
loans, primarily in the area of nonrevolving credit. Much of this growth
can be traced to increased demand for auto loans.

At the end of 2015, Cincinnati’s delinquency rate sat below state and
national rates
	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

2005

2007

2009

2011

2013

The credit card delinquency rate is an indicator of the financial
health of households. The credit profile of Cincinnati remains
much better than the nation’s and is in line with nearby metro
areas. After peaking at 9.4 percent at the end of 2012, the metro
area’s credit card delinquency rate declined through the first
quarter of 2015, standing at 6.4 percent. This compares to the US
rate of 7.9 percent and Ohio’s rate of 7.0 percent.

2015

Source: Authors’ calculations from the Federal Reserve Bank of New York’s
Consumer Credit Panel/Equifax.

FEDERAL RESERVE BANK of CLEVELAND

CINCINNATI, OHIO MSA

FOURTH DISTRICT METRO MIX
YOUR DISTRICT, YOUR DATA

MARCH 2016

HOUSING MARKET

In 2015, Cincinnati’s housing prices tracked the national average
 HOUSING PRICES

Year-over-year percent change

Cincinnati’s housing market continues to advance at a pace consistent
with the nation and nearby metro areas, while slightly outpacing that
of the state. In January 2016, house prices were 4.0 percent above
their level a year ago, which is comparable to the national increase
of 4.2 percent. Similar to the path of the nation and nearby metro
areas, price growth in the Cincinnati metro area has slowed since the
beginning of 2014, but sales activity in the region has continued to
increase. Increased demand coupled with a slowly increasing supply
has worked well for the market’s pace of activity. However, issues such
as weak income growth, moderate rates of household formation, and
continued strength in the rental housing market remain.

15
— Cincinnati
— Ohio
— United States
— Nearby metro
average

10
5
0

■ Recession
-5
-10

2006

2008

2010

2012

2014

2016

Source: Zillow.com/Haver Analytics.

The Cincinnati metro area’s permitting activity is gaining steam

	H OUSING PERMITS

Remaining above its post-recession low, homebuilding in the greater
Cincinnati region is gaining steam. Housing supply remains tight,
helping to prop up house prices. Multifamily vacancy rates remain
low as apartment construction has yet to catch up with the growth
in regional demand. Tight credit conditions and a scarcity of skilled
construction labor are two factors often cited for the slow resurgence
of supply. The residential construction labor force is growing and
will help reduce the mismatch between growing housing demand
and short supply over the long run. Credit conditions remain
tight, but more lenders are reporting increased activity in this
area. Nonetheless, through February 2016 permitting activity was
approximately 7 percent below pre-recession levels. However, this
rate is a substantial improvement from the level a year ago when
activity was 33 percent below pre-recession levels.

Index, 2007: M12=100, six-month moving average
250
— Cincinnati
— Ohio
— United States
— Nearby metro
Cincinnati
average
Average of
nearby
metros
■
Recession
United States

200
150
100
50

Ohio
0
		2006

2008

2010

2012

2014

2016

Source: Census Bureau/Haver Analytics.

DEMOGRAPHICS AND EDUCATION
Cincinnati Metro Area
			
		
2014
Population

United States

Change from		
2009
2014

Change from
2009

2,149,449

+2.0%

318,857,000

+3.9%

Adults with less than
a high school diploma

9.6%

–2.9%

13.1%

–1.7%

Adults with an undergraduate
degree or higher

31.4%

+2.9%

30.1%

+2.2%

37.3

+0.4 years

37.7

+0.9 years

$55,771

–2.6%

$53,698

–3.2%

Median age (years)
Median household income

 CINCINNATI, OHIO

	According to 2014 US Census Bureau 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 and quarterly figures are seasonally adjusted and all dollar figures are in current dollars, except home prices (which are left nominal). Where applicable, these adjustments
are made prior to calculating percent changes or indexes. 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.
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