Ohio economy falling behind rest of nation

Published 12:00 am Friday, January 28, 2005

COLUMBUS (AP) - By most indicators, Ohio's economy is not stacking up compared with most states and has fallen further behind in the past 10 years, according to economists.

''The data strongly makes the case that the Ohio economy has and continues to seriously lag the rest of the national economy,'' Mark Zandi, chief economist at Economy.com., told The Columbus Dispatch for a story on Sunday.

In employment, the best measuring gauge for many economists, Ohio lost 5,100 manufacturing jobs last year and, when considering other types of jobs, still had a net loss of 200 nonfarm jobs since the end of last year.

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The 300,000 jobs the state has added in the past 10 years is ahead of only Michigan when it comes to job growth, according to government statistics.

Ohio's unemployment rate used to be consistently below the national rate. At 5.9 percent, it is now a half-point higher than the national rate and Oregon is the only other state with a larger percentage point increase in its jobless rate since 1994.

''Most of us have contact with the economy primarily through our employment - and whether we're employed, how much we make, influences how much we spend,'' said Jim Coons, president of J.W. Coons Advisors in Columbus. Consumer spending makes up about two-thirds of economic activity, he said.

Economists also cite other indicators to show Ohio's lagging growth:

4Personal income ranks 39th among the states in the past 10 years even though it topped the national average last year.

4Housing starts, important because they show how confident people are about an area, have trailed all but 10 states since 1994.

4Output of goods and services, or the state's gross domestic product, has been slower than all states but Kentucky the past five years.

Miami University economics professor James Brock said comparing Ohio to other states can be misleading because Ohio is made up of diverse rural and urban areas.

Central Ohio, for example, has fared better than other parts of Ohio and its those other regions that can bring state averages down, he said.

Economists have been saying for years that Ohio's struggles are due to the move from its manufacturing base to more service-based work and lower-paying jobs. Ohio also has been slow to recover from the recession.

''The larger picture is the structural transformation that Ohio has and continues to go through,'' said Philip Hopkins, a managing director for the Massachusetts-based economic forecasting firm Global Insight and an Ohio native.

Gov. Bob Taft has made tax reform a top priority this year to lower business costs as a way to keep and attract companies, but economists doubt whether government can do much to create jobs beyond providing good roads and schools.

''Ohio's been hanging near the bottom in terms of economic growth, and that's not likely to change anytime soon,'' Hopkins said.