Austrian, Ziona

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Cleveland-Marshall College of Law

Cleveland State UniversityEngagedScholarship@CSUUrban Publications Maxine Goodman Levin College of Urban Affairs1-1-2006Northeast Ohio Economic BriefZiona AustrianCleveland State University, z.austrian@csuohio.eduHow does access to this work benefit you? Let us know!Follow this and additional works at: https://engagedscholarship.csuohio.edu/urban_facpubPart of the Urban Studies and Planning CommonsThis Report is brought to you for free and open access by the Maxine Goodman Levin College of Urban Affairs at EngagedScholarship@CSU. It hasbeen accepted for inclusion in Urban Publications by an authorized administrator of EngagedScholarship@CSU. For more information, please contactlibrary.es@csuohio.edu.Repository CitationAustrian, Ziona, "Northeast Ohio Economic Brief " (2006). Urban Publications. 0 1 2 3 671.https://engagedscholarship.csuohio.edu/urban_facpub/671Figure 1 reveals that although overall employmenttrends followed the same direction in most years between1993 and 2005, NEO's rate of growth was much slowerthan that of the entire state and nation.  Between thefirst quarter of 1993 and the first quarter of 2005, theregion's employment grew by only 6.7 percent comparedto 11.2 percent in Ohio and 20.7 percent in the U.S.Both Ohio and NEO began losing jobs in 2001, a yearearlier than the U.S.  Moreover, by the first quarter of2005, U.S. employment levels reached their pre-recessionlevel, while employment in both NEO and Ohio were stillsignificantly lower than their peak 2000 employment.This is not surprising given the fact that NEO and Ohiocontinued to lose jobs through the first quarter of 2004;NEO’s employment began to rise only in 2005.  During2000-2005, the most recent national business cycle, theU.S. experienced small job gains (1.3%), while NEO lostjobs at a higher rate (-5.0%) than Ohio (-3.9%).NEO had 1.8 million employees in the first quarter of2005 (Table 1).  The two largest industrial sectors wereManufacturing with 290,000 employees (16% of NEOeconomy) and Health Care and Social Assistance with267,200 jobs (14.8%).  These sectors accounted forlarger shares of the NEO economy than the same sectors in the Ohio and U.S. economies.This brief is sponsored by the Ohio Urban University Program (UUP) and its Northeast OhioResearch Consortium (NEORC), Cleveland State University's Presidential Initiative for EconomicDevelopment, and the U.S. Economic Development Administration.  NEORC consists of ClevelandState University, Kent State University, The University of Akron, and Youngstown State University.The brief is produced by the Center for Economic Development at Cleveland State University'sMaxine Goodman Levin College of Urban Affairs.   To contact the Center for EconomicDevelopment, call (216) 687-6947.Northeast OhioResearch ConsortiumU.S. Economic DevelopmentAdministrationThis brief is the second release of a publication that provides a broad overview of employment and wage trends for Northeast Ohio (NEO).  It updates the first brief with data for the first quarters of 2004and 2005.  Its objective is to provide a quick, current, and informative report on the region's economy.  NEO is defined as a 14-county area composed of four metro areas—Cleveland, Akron, Canton, andYoungstown—and three additional adjacent counties (Ashtabula, Columbiana, and Wayne).  This briefbegins with longer-term analysis from 1993 followed by short-term trends from the first quarter of 2003through the first quarter of 2005.    U.S. employment levels reached their pre-recessionlevel, while employment in both NEO and Ohio were still significantly lower than their 2000 levels.Table 1 shows employment levels in Northeast Ohio ineach of the major industrial sectors and comparesregional employment change rates in the past two yearswith changes in Ohio and the nation.  Several of NEO’s largest industries gained employment.These industries—Health Care and Social Assistance,Educational Services, Accommodation and FoodServices, and Administrative and Support Services—alsogrew at the state and national levels.  However, therewere four industries where, despite national growth,NEO lost jobs.  These include Wholesale Trade;Finance and Insurance; Other Services; and Agriculture,Forestry, Fishing, and Hunting.  NEO performed better than Ohio in seven sectors.NEO’s employment in Management of Companies andEnterprises, Retail, and Mining increased slightly, whileit declined in the state.  Employment in the Real Estate,Rental, and Leasing sector as well as in the Arts, Entertainment, and Recreation industries grew faster in NEO than in Ohio, while thenumber of Administration and Support Services jobs in NEO increased at twice the rate of growth than in Ohio.A critical industry to a knowledge-intensive economy—Professional, Scientific, and Technical Services—experienced some growth inNEO between 2003 and 2005 (0.7%), although at a much lower rate than in Ohio (1.2%) and the U.S. (4.8%).The national economy lost jobs in only four sectors between 2003 and 2005: Manufacturing, Public Administration, Information, andUtilities.  Both NEO and Ohio also lost employment in these industries. In the first three industries, the rate of decline in NEO was higherthan in Ohio and the nation, while in Utilities, NEO experienced a smaller rate of decline.An analysis of absolute changesin total employment shows that NEO employment did not changebetween the first quarter of 2003and the first quarter of 2005.This no-growth scenario is theresult of 12 industries addingemployment and eight otherindustries losing jobs (Figure 2).A critical industry to a knowledge-intensiveeconomy—Professional, Scientific, andTechnical Services—grew in NEO between2003 and 2005 (0.7%), although at a muchlower rate than in Ohio (1.2%) and theU.S. (4.8%).Page 2Table 1:  NEO Employment Growth/Decline Rates Compared to Ohio and the U.S., Q1 2003 - Q1 2005Manufacturing 289,937 -4.5 -4.3 -3.6Health Care and Social Assistance 267,204 2.5 3.3 3.9Retail Trade 208,696 0.7 -0.6 2.0Educational Services 155,842 0.3 1.0 2.3Accommodation and Food Services 139,449 2.9 3.7 5.1Administrative and Support Services 100,632 5.0 2.2 6.2Wholesale Trade 85,814 -0.3 0.4 1.7Finance and Insurance 84,279 -0.4 0.0 1.8Professional, Scientific, and Technical Services 78,834 0.7 1.2 4.8Construction 69,861 0.2 0.5 6.8Public Administration 68,052 -1.0 -0.6 -0.7Transportation and Warehousing 66,412 0.9 2.2 1.2Other Services (except Public Administration) 58,603 -2.7 -1.5 1.3Management of Companies and Enterprises 35,347 0.1 -4.5 3.8Information 34,666 -6.8 -6.1 -5.3Real Estate and Rental and Leasing 24,304 0.7 0.1 3.0Arts, Entertainment, and Recreation 23,618 1.7 0.1 3.1Utilities 10,817 -2.9 -3.5 -3.1Agriculture, Forestry, Fishing, and Hunting 3,300 -5.1 -3.7 0.3Mining 2,301 1.5 -4.3 9.2TOTAL 1,808,781 0.0 0.1 2.2Major Economic Sector (NAICS)NEO Ohio U.S.# ofEmployees,2005Percent Change,2003-2005Total number of employees does not equal the summation of the categories shown due to some unclassified employees. Source: ES 202 Data...most of the job lossesoccurred in higher-wageindustries, whileemployment gainsoccurred mainly amongindustries with lowerwages.Page 3The four industries that added more than 1,000 jobseach include Health Care and Social Assistance(6,450), Administrative and Support Services (4,800),Accommodation and Food Services (3,950), andRetail Trade (1,400).  Industries with the largest losses include Manufacturing (-13,500), Information(-2,540), Other Services, (-1,600), and PublicAdministration (-650).  The list of job gainers and losers reveals that most of the job losses occurred inhigher-wage industries, while employment gainsoccurred mainly among industries with lower wages.  NEO’s gross product of all industries combined grewby 2.7% between 2003 and 2005 in comparison to4.6% growth in Ohio and a 7.6% gain in the U.S.(Table 2).Of NEO’s $152 billion economy, the manufacturingsector is the largest, accounting for one-fifth, or$31.1 billion.  Although NEO’s manufacturing sector lost employment between 2003 and 2005, it experienced growth in gross product.  In most ofthe industries (including manufacturing) where NEOexperienced an increase in its gross product, NEO’sgrowth rates were smaller than those of Ohio or theU.S.  In contrast, gross product in the Managementof Companies sector grew by 14.3% in NEO, fasterthan in Ohio and the U.S.; Educational Servicesgross product in NEO grew much faster than in Ohio, but slower than nationally.  Among NEO sectors with at least $1 billion in gross product, fiveexperienced decline in the region while growing in the U.S.: Public Administration; Retail Trade;Information; Other Services; and Arts, Entertainment,and Recreation.In 2005, the three highestpaying industries in NEOwere Management ofCompanies andEnterprises ($80,800),Utilities ($66,300), andFinance and Insurance($61,900) (Figure 3).However, these three sectors combined lost 600jobs and accounted foronly 7.2% of all employees.In contrast, Manufacturingis an industrial sector thatis both large and pays relatively high wages($48,700).  Health Careand Social Assistance, thesecond largest industrialsector, paid an averagewage of $33,600 in 2005.NEO’s gross product grew by 2.7%, slowerthan the state (4.6%) and the nation (7.6%).Table 2:  NEO Gross Product Growth/Decline RatesCompared to Ohio and the U.S., 2003-2005Manufacturing 31,093 5.3 7.5 9.5Real Estate and Rental and Leasing 17,226 4.6 7.1 8.7Public Administration 14,493 -2.4 -3.4 2.3Finance and Insurance 12,317 3.1 3.7 7.2Health Care and Social Assistance 12,557 0.8 4.8 7.8Retail Trade 10,723 -2.8 -0.3 4.7Wholesale Trade 10,312 5.8 6.6 8.5Professional, Scientific, and Technical Services 8,124 3.4 5.5 8.4Construction 6,146 7.1 8.4 10.5Administrative and Support Services 3,857 0.2 3.2 7.5Information 3,966 -0.9 7.7 8.5Other Services (except Public Administration) 3,626 -3.9 -1.0 2.5Transportation and Warehousing 3,694 0.9 3.1 8.8Accommodation and Food Services 3,268 3.3 4.9 9.2Management of Companies and Enterprises 3,822 14.3 11.9 13.8Utilities 3,257 8.9 9.8 11.1Arts, Entertainment, and Recreation 1,145 -6.7 7.6 9.0Educational Services 1,273 4.2 1.3 5.3Agriculture, Forestry, Fishing, and Hunting 767 -5.0 -3.3 4.3Mining 364 -1.9 9.2 15.1TOTAL 152,030 2.7 4.6 7.6Major Economic Sector (NAICS)NEO Ohio U.S.Gross Product(in Million $),2005Percent Change,2003-2005Gross product measures value-added output.  Source: Economy.comOverall average wages in NEO declined by 1.9 percent from $37,634 in 2003 to $36,910 in 2005, after adjusting for inflation.  Nineindustries experienced declining average wages of more then $1,000, while average wages grew by more then $1,000 in only fourindustries.  The Finance and Insurance sector, which has over 84,000 employees and an average wage of $61,900, experienced anincrease in average wages of $3,150 (or 5.4%).  Management of Companies and Enterprises experienced an even larger wage gain($4,600 or 6%), but it is a smaller industry with only 35,300 employees.  Additional industries that increased average wages includeWholesale Trade, Information, and Manufacturing.  Large industries with more than 50,000 employees that experienced reduced average wages of more than $1,000 include Educational Services, Health Care and Social Assistance, Transportation andWarehousing, Construction, Other Services, Retail Trade, and Public Administration.Employment performance varies among metropolitan areas and counties (Table 3).  The Akron metropolitan area was the only NEOmetro area to gain employment (3.5%) during the 2003-2005 time period; both of its counties—Portage and Summit—added jobs, withSummit County adding close to 8,700, more than any other county in NEO.  Moreover, this healthy performance offset the declines inthe other metro areas, resulting in no employment change in Northeast Ohio as a whole.  Job losses in the Cleveland metropolitanarea (-0.6%) all occurred in CuyahogaCounty (-2.0%).  Geauga, Lake, andMedina Counties each added between2,000 and 3,000 jobs; Lorain Countyalso added some employment.  SinceCuyahoga County accounts for 40percent of Northeast Ohio employment,its economic performance not onlyaffects the Cleveland metropolitanarea, but the entire region.Q1 2003 Q1 2005 Change % ChangeOhio 5,192,313 5,195,014 2,702 0.1NE Ohio 1,808,602 1,808,781 179 0.0Cleveland-Lorain-Mentor MSA 1,030,549 1,024,202 -6,346 -0.6Cuyahoga 752,267 737,358 -14,908 -2.0Geauga 31,136 33,210 2,074 6.7Lake 94,653 97,457 2,804 3.0Lorain 98,298 99,033 735 0.7Medina 54,194 57,144 2,950 5.4Akron PMSA 306,540 317,223 10,683 3.5Portage 50,107 52,103 1,996 4.0Summit 256,433 265,120 8,687 3.4Canton-Massillon MSA 170,385 169,279 -1,106 -0.6Carroll 5,353 5,400 47 0.9Stark 165,032 163,879 -1,153 -0.7Youngstown-Warren MSA 188,111 185,482 -2,629 -1.4Mahoning 102,726 103,665 940 0.9Trumbull 85,385 81,817 -3,568 -4.2Rural Counties 113,017 112,594 -423 -0.4Ashtabula 32,753 33,156 403 1.2Columbiana 32,869 31,925 -944 -2.9Wayne 47,394 47,513 118 0.2Table 3:  NEO Total Employment by Region and County, Q1 2003 - Q1 2005This brief will be updated with data for the first quarter of 2006 as they become available. Please share your comments with Dr. Ziona Austrian: ziona@urban.csuohio.edu. Electronic versions of both briefs (in PDF format) are available on the Center for Economic Development website http://urban.csuohio.edu/economicdevelopment.The Center for Economic DevelopmentCleveland State UniversityMaxine Goodman Levin College of Urban Affairs2121 Euclid Avenue . Cleveland, OH 44115(216) 687-6947NONPROFITORGANIZATIONU.S. POSTAGEPAIDPERMIT NO. 500CLEVELAND, OHIOAkron’s employment grewby 3.5% between 2003and 2005; it was the onlymetro area in NEO thatadded jobs.Source:  ES 202 DataPage 4

Northeast Ohio Economic Brief

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