Loading…
Sunday, December 21, 2014
Current Weather
Loading Current Weather....
Published: Wednesday, 6/17/2009

Study on effects of recession finds great pain in area

BY GARY T. PAKULSKI
BLADE BUSINESS WRITER
Weathers Weathers
THE BLADE/LORI KING Enlarge | Buy This Photo

A new study that attempts to measure how the recession is affecting America's 100 largest metro areas found a world of hurt in Toledo.

The metro area is the weakest performing big-city area in Ohio and the ninth worst overall, the nonprofit Brookings Institution said in a report released today.

The rating is based on recent and long-term increases in unemployment, changes in the overall economy, and depreciation of house prices.

"It won't be a surprise to anybody in our part of the country," said Steve Weathers, president of Toledo's Regional Growth Partnership. "The region does not have a diversified economy. It is based solely on the automotive industry. When times are good, it pays off. When they are bad like now, that lack of diversity does hurt you."

The study ranked Detroit worst, followed by four cities in Florida, three in California, and then Toledo. The U.S. recession began in December, 2007, economists have determined.

"The recession is having very diverse effects," said Howard Wial, a study co-author. "Some places like Toledo have been hit extremely hard. Others, like metro areas in Texas, have just been grazed a bit."

San Antonio, Texas, and Oklahoma City ranked No. 1 and No. 2 among the strongest-performing metro areas during the recession.

Cities that did well tended to have economies tied to oil and gas exploration, military employment, education, and government.

Despite a 6 percent decline in home prices nationwide over the past year, prices in 38 of the cities studied held steady.

Heavily represented among poor performers were cities in the Sunbelt and West Coast that experienced huge run-ups in housing prices that eventually collapsed. The bottom 20 performers include Bradenton, Fla.; Tampa; Modesto, Calif.; Fresno, Calif.; Las Vegas, and Miami.

The only other Ohio city among the worst performers was Youngstown at No. 90, two notches above metro Toledo's 92nd ranking.

"The auto industry and its supply chain have been decimated," said the study's co-author, Mr. Wial. "Metro areas like Toledo that depend heavily on them have seen their economies decimated."

The study looked at economic performance in the first three months of this year compared to the recent past.

The biggest drag on metro Toledo's ranking was overall economic activity, down 5.8 percent from its recent peak; an unemployment rate that averaged 12.1 percent; an 8.8 percent drop in employment from the peak; a 2.7 percent decline in jobs from the fourth quarter of 2008. In each instance, metro Toledo ranked in the bottom 10.

The area ranked closer to the middle of the pack in home depreciation, with prices down 3 percent from the first quarter of 2008.

Also, it was not among cities where average wages dropped between the end of 2008 and the first three months of this year.

The list of Ohio cities that experienced declines included Cleveland, Columbus, Dayton, and Youngstown. Metro Toledo includes Lucas, Wood, Fulton, and Ottawa counties.

The report's authors said they found evidence of the emergence of two distinct "manufacturing belts."

In Michigan and Ohio, job losses began much earlier than in the nation overall because of heavy reliance on auto manufacturing. In the Northeast, aerospace, photonics, and other nonauto manufacturing have helped minimize job cuts and boost home prices.

General Motors Corp. and Chrysler LLC, both operating under bankruptcy protection, are the source of thousands of jobs in metro Toledo directly and through suppliers.

Mr. Weathers, of the Regional Growth Partnership, said the study underscores the need to diversify the region's economy.

"Hopefully, it can be a catalyst," he said, pointed out that the partnership has helped create 50 companies through its Rocket Ventures and Launch programs.

George Zeller, a labor economist in Cleveland, said he was surprised that Toledo ranked worse than such hard-hit places as Youngstown.

By his count, many other counties have recorded larger job losses over the long haul than Lucas.

Job growth across the state has been below the national average for 158 consecutive months, or 13 years, he added.

"This is a statewide problem caused by the long-term decline in manufacturing," he said. "Recent problems we have seen in the auto industry have made it worse. We've been extremely weak for a long time."

Contact Gary Pakulski at:

gpakulski@theblade.com

or 419-724-6082.



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.








Poll