The local economy is expected to see slow and steady growth this year despite national uncertainty.
Northern Kentucky University economist Janet Harrah presented a regional economic outlook to Northern Kentucky’s Chamber of Commerce Tuesday.
“It's not going to be spectacular, but we don't expect to see a recession,” Harrah said. “I think, all in all, it's a good forecast for the year.”
The Tri-State’s GDP is expected to grow about 1.5%. Harrah anticipates employment will stay relatively flat, but she says there's going to be real winners and losers in the labor market.
For the past 10 years, health care and transportation accounted for 40% of new job growth in the region.
“When you look at the last year, 67% of all jobs have been in the health care industry. The biggest drag has been the transportation sector,” Harrah said. “These have been our two most important in the last 10 years, but we're seeing a real dichotomy in how they're performing in the last 12 months.”
She points to cargo activity at the Cincinnati/Northern Kentucky National Airport slowing.
Federal trade policy, uncertain investment in AI and sticky inflation are all wildcards in this year's outlook, Harrah says. Those factors are all impacting how people feel about the economy.
“When consumers feel bad about the economy, they pull back on their spending, which becomes kind of a self-fulfilling prophecy,” Harrah said.
People are also being squeezed by the country's cost of living crisis, in which prices are up but wages are not.
How does Greater Cincinnati compare to U.S.?
Greater Cincinnati’s economy is expected to keep growing this year, but not as fast as the rest of the country.
A lack of population growth is the biggest drag on the local economy, Harrah says. While the U.S. population is predicted to grow 0.4% annually, the Tri-State is expected to grow at half that rate.
“That's adding somewhere between 5,200 to 5,300 people per year,” Harrah said. “A lot of those are going to be children, and it could be people moving into the market that maybe are seniors, so that's not reflective. Probably half of that would be new entrants into the workforce.”
The region has a steady industrial base, but it doesn't have a lot of high-growth, high-risk sectors like tech.
Harrah says improving the legal immigration system could bring more workers to Greater Cincinnati.
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