Burke, Rosen & Associates
I’ve been studying these [economic] ups and downs for better than 40 years. There are forces that bring economic expansions to an end and lead to recession. There are forces that occur that bring you out of a recession, things such as more people buying new cars and businesses buying new equipment.
But a financial crisis recovery always takes longer. They generally are accompanied by a lot of debt and that’s different from an inventory recession. This type of financial crisis included a large overhang of debt, a high unemployment rate and more. People are, and feel, poorer in part because their homes are worth less. It always takes longer to recover because you have to restructure. It’s not a simple short-term correction of inventory.
Now, a lot of things are starting to work their way out. The unemployment rate is dropping and home sales and prices are rising. Natural forces are coming into play. I am seeing signs of a strong pickup later this year or early into next year.
As an entrepreneur, I own residential and commercial properties and there is now more interest in filling those properties. All of a sudden we’re getting calls. Brighter days are ahead. In Ohio, we got a real bounce from natural gas production and a big bounce in the automobile industry. You drive around Northeast Ohio, you see a lot of road construction. That’s a good underpinning.
We do have some clouds out there, including the fiscal cliff.
William C. Shivers
Greater Akron/Canton Region
The Akron and Canton area economies have shined relative to the nation, and even an outperforming Ohio state, during the economic recovery. The unemployment rate for Akron plummeted from a peak of 10.6 percent in early 2010 to 6.6 percent in August. The Akron unemployment rate decline of 4.0 percent exceeded the outstanding 3.6 percent decline in Ohio, and was almost double the 2.2 percent decline in the nation.
Canton’s unemployment rate stood somewhat higher than Akron’s at 7.1 percent in August, but it fell an astonishing 5.2 percent from its peak of 12.3 percent in early 2010, making the Canton area one of the great economic turnarounds in the country. Canton’s 71 percent jump in building permits in 2012, through August, indicated many of those obtaining jobs will be in Canton to stay. In comparison, building permits were up 31 percent in the U.S. and 23 percent in Ohio.
Where has the growth come from? Akron has gone back to its roots, with manufacturing employment rising 4.7 percent in the 12 months ending in September, faster than the 2.5 percent growth in Ohio, and especially the 1.5 percent manufacturing employment rise in the nation. Akron’s deep technical know-how has proved to be a competitive advantage in an increasingly interrelated world economy. The mining, logging and construction sector also showed dynamic employment growth of 7.2 percent.
The Canton area has taken a somewhat different route, relying on service sector employment growth to fuel economic expansion. In the 12 months through September, financial activities employment rose 7.6 percent; trade, transportation and utilities rose 4.6 percent; professional and business services rose 4.1 percent; leisure and hospitality services rose 4.2 percent, and education and health services rose 2.5 percent.
However, one cannot divide regional economies from each other, any more than one can divide the national economy into its integral parts. Taken together, the diverse Akron-Canton area has represented one of the most promising areas of economic growth in the state and the nation.
Executive vice president
Home Builders Association (Portage and Summit counties)
Contractors are very busy. One reason, other than simply more interested home buyers, is that many are doing numerous tasks due to downsizing their staffs during the recession. Remodeling has come back fairly strong. Part of that is people staying in their house because they can’t quite get the money for their home that they wanted. Many people are deciding their house isn’t that bad, they’ll stay in it and just remodel.
Contractors are getting to the point with pressure on contracts that they are starting to think about hiring. However, there’s virtually no speculative building going on except for maybe the larger builders and the national builders who have funding to do that. It’s almost impossible for the average builder to get a loan for a speculative home. The lending part of our business is just starting to loosen up.
For the first nine months of the year, new single-family home starts totaled 232 in Summit County. That’s down from 249 last year.
The longer term outlook is that the industry thinks it will get progressively better in 2014 and 2015. There are wild cards that could affect this, such as the U.S. entering into a war, and the fiscal cliff budget situation.