A respected Cleveland-area economist told several hundred area business leaders Tuesday that Toledo and Ohio likely will “muddle through” 2011 with little change in unemployment — but things will get better soon.
Ken Mayland, president of ClearView Economics LLC, said that the economic recovery is “statistically stronger” than rebounds the nation experienced following recessions in 2001 and 1990-91. However, he pointed out, statistics don't pay bills.
“If you ask the man on the street if the recession is over, they would probably say no,” Mr. Mayland said during a breakfast meeting at the Toledo Club downtown. “But there's no denying that there has been some kind of change of status in the economy.”
Mr. Mayland said consumer spending, one of the largest components of the national economy, has begun to rebound after several quarters of consumers using their disposable income to pay down debt and increase their savings.
“Maybe consumer spending isn't as strong as we'd like it to be, but it is increasing,” Mr. Mayland said. “The first sign of any turnaround is, ‘Are things getting less bad?' I think it's clear that things are getting less bad.”
He listed several economic sectors that are helping in the rebound, including double-digit increases in business spending on equipment and software, and exports. He also said businesses have increased production in recent quarters to make up for what had been a steady draw-down of existing inventories.
“Business investment has been nothing short of booming in year-over-year growth, with almost 16 percent growth adjusted for inflation. Company cash flow is very good. Profit growth of companies has been very strong,” the economist explained.
He said that although there's little chance the nation will slip back into economic contraction, business-community unease about taxes and health care will continue to hold back hiring, and foreclosures will be “like a wet blanket” on housing-sector growth.
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