Southwest Ohio’s economy will continue to grow in 2016, but at a slower rate than the national average — in part because of declines in steel production and federal spending, a PNC Bank senior economist said Tuesday.
Nationally, the U.S. economy is seeing a slowdown in manufacturing tied to both the stronger dollar, which is putting a drag on U.S. exports, and a downturn in energy production, said Gus Faucher, a PNC senior economist and vice president.
Faucher spoke at PNC’s Economic Forecast Luncheon, an annual event that attracted about 160 area business leaders to the Mandalay Banquet Center in Moraine.
Declines in oil and natural gas exploration because of falling gasoline prices have impacted steel producers such as West Chester Twp.-based AK Steel. This month, AK Steel announced plans to temporarily idle some operations at a Kentucky blast furnace in December.
“That is the primary area of softness,” Faucher said.
The economist said the strong automotive and aerospace manufacturing sectors will continue to benefit the region. In recent months, new vehicle sales surpassed 18 million units at an annual rate.
“This is going to be the best year for the auto industry since 2001 and obviously that has a big impact on an area like Dayton,” Faucher said.
Federal spending, including defense contracts related to Wright-Patterson Air Force Base, isn’t seeing much growth. However, that sector isn’t seeing the big budget cuts of recent years, either.
Monday’s announcement that House Speaker John Boehner, R-West Chester Twp., is pressing ahead with a bipartisan budget deal to fund the government for the next two years is “going to be a positive for the area,” Faucher said.
The Dayton region has gained about 5,000 jobs in each of the last two years, giving the region an annual growth rate of slightly more than 1 percent, said Richard Stock, director of the University of Dayton’s Business Research Group, who also spoke at the event.
This article was written by Dave Larsen from The Dayton Daily News and was legally licensed through the NewsCred publisher network.