A new report from PNC Financial Services Group says metropolitan Toledo's economy is on a positive growth path for the next two years, but just barely.
PNC expects employment to increase by just 0.6 percent for the rest of the year, after growing by 1.1 percent last year. That trails PNC's projection for U.S. employment growth of 1.7 percent for the rest of the year. Median household income, already trailing the U.S. average, is also expected to grow at a rate slower than the country as a whole.
“The Toledo economy will post more modest job growth in 2014 than it did in 2013,” the report said. “Auto sales are slowly recovering nationwide and this will enable manufacturing to hold on to production and employment gains from the previous three years. However, the industry likely will contribute less to growth in 2014 than it did earlier in the economic recovery, as the U.S. economy shifts from investment and manufacturing-led, to consumption-led growth.”
In 2015, PNC forecasts job growth of 1.1 percent in metro Toledo and 1.5 percent in the United States.
The projections were compiled by five economists from Pittsburgh-based PNC and released this week.
Particularly challenging for the region, PNC said, have been drops in public sector employment, as well as layoffs and buyouts in the health-care industry — typically one of the area's more stable growth drivers. Recently, decreasing Medicare reimbursement rates have many hospitals and other providers looking to cut costs.
Last year, for example, ProMedica offered buyouts to 1,200 employees to deal with changes in reimbursement rates.
The report said the health-care industry could see more cuts in the short term, but has a positive long-term outlook, in part because of the area's aging population.
Though the labor force appears to have stabilized after losing some 22,000 people from 2006 to 2012, the labor participation rate remains historically low.
“The metro area’s economic potential is hamstrung because labor force participation is the lowest it has been in the past two decades and is set to fall further over the long term as the aging population retires. It will be an uphill battle for the area to attract well-paying employment,” the report said.