DAYTON, Ohio (WDTN) – Dayton’s economy is expected to continue expansion through 2020, but not at the same rate as the last two years.
Gus Faucher, Chief Economist for PNC Financial Services Group, told WDTN.com that outside factors could slow Dayton’s economy, but he doesn’t see a recession coming over the next year.
“There’s a lot of manufacturing in Dayton tied to the national and global economy,” Faucher said. “That could be a drag. But we are also seeing increased federal spending which should push back any blows from a trade war between the U.S. and China.”
Faucher said the construction craze between Premier Health and Kettering Health Network is healthy for the area currently but could pose problems later.
“There’s an aging population nationally and in the Dayton metro area,” Faucher said. “There’s more demand for medical services. But you are concerned about excess capacity in those facilities. In the short run it will be a boost to construction, but in the long run, will there be enough patients to fill those facilities?”
The Dayton economy has diversified the last decade, which Faucher said is important in holding off potential recessions.
“It used to be manufacturing dependent, but now there’s aerospace, high-tech industries, defense, education, health care along with business and professional services,” Faucher said. “The transportation services are also a factor because of location.”
Other notes from Faucher on Dayton’s economy:
- While Dayton’s economy has boomed the last two years, it’s still lagged behind national trends: “It’s an older population in Dayton, so growth has been below the national average. The industrial mix is more 20th century than 21st, but (Dayton) is slowly making that change.”
- The global economy is slowing, but Faucher believes the U.S. is strong enough domestically to withstand any potential fallout: “Brexit is creating a drag on European growth and I expect the British economy to hit recession either in 2020 or later this year. Germany is showing some slowness.”
- Interest rates have remained low the entire decade. It’s allowed borrowers to get mortgages and buy cars, and businesses to expand, but it has hurt retirees.
- Automation will be a factor in manufacturing, but Faucher said it’s been a factor for decades: “The types of manufacturing we will see here and nationally is high-skilled. We’ll have workers and robots and workers controlling robots.”