Housing, manufacturing growth, labor market: The trends to watch in the Dayton economy in 2022

Credit: Jim Noelker

Credit: Jim Noelker

The Dayton region’s economy is more stable than many other areas, but work still needs to be done to recovery from the pandemic-related recession, according to local economists and experts who spoke during a Dayton Daily News Community Conversation last week.

The Dayton Daily News hosted the Community Conversation live on its Facebook page on Wednesday with a panel of local experts to discuss the economic outlook for the region in 2022. The full discussion can still be viewed on our Facebook page or DaytonDailyNews.com.

The discussion was co-hosted by Community Impact Editor Nick Hrkman and Reporter Lynn Hulsey. Panelists included:

  • Whitney Barkley, director of the Greater West Dayton Incubator.
  • Oluwaropo A. (Abbey) Omodunbi, assistant vice president and senior economist for PNC Financial Services Group.
  • Kunal Patel, team lead with The Kunal Patel Group and Coldwell Banker Heritage Realtors.
  • Richard Stock, director of the Business Research Group at the University of Dayton.
  • Julie Sullivan, executive vice president of regional development for the Dayton Development Coalition.

Here’s experts of the discussion. Answers have been edited for length and clarity.

Q: With regard to the Dayton region housing sales, they broke records and helped drive rental rates up in the Dayton region last year. What will the trend be in 2022? And is there a danger of overpricing of housing in our region?

Kunal Patel: The market is going to be strong in 2022. What we saw in ‘21, we’ll have a couple of changes. With lack of inventory, which we all hear about it all the time — low supply, high demand — it’s driving up prices on both the rentals and the sale home sales, but we also factor in the cost of living ending being as low as we are. There is less rental inventory on the market then there are homes for sale. But both are rising together. So the entire country currently is about 5 million to 6 million units behind, and that includes senior living facilities, renters and owner occupied homes. We’re just underbuilt. Rental rates are increasing more as a percentage than housing prices are. I go back to ‘08 (the Great Recession and housing crash): Builders just left the marketplace, and we haven’t caught up on building like we used to over the past 10 to 12 years. So we’re just not covering that demand.

The two other things that I would try to touch on that’s impacting price in our housing situation is our interest rates. Our interest rates today are very low, historically speaking, so you can get into a 2,000 square foot home much easier than years past, where a full affordability is what making Dayton so strong. We have a lot of our clients and friends that were in New York City, and now they’re able to telework because of COVID. Knowing that you can have a meal downtown, and it’s $20 where they’re used to paying $70 in New York. I have clients from New York or D.C. coming in where they’re used to a 200 square foot apartment and you’re getting a 2,000 square foot house for that same price. But affordability is going decrease if we just can’t continue that supply and demand.

The second part — there’s more liquidity in the market than ever before. Meaning today consumers have more money in the stock market, cash on hand and savings than they ever did before. We’re seeing cash transactions at a real estate level, one out of every three deals is a cash transaction. Before it was one out of every five to one out of every seven. So just this last year to three years, we’ve seen a big change.

In my own opinion affordability is not a major issue right now. We are below percentages in the past, so affordability was great four to five years ago; it’s good now. Meaning it’s decreased a bi,t but it’s better than years past

Q: What’s sort of the the big picture of what will drive the region’s ability to thrive economically this year?

Oluwaropo A. (Abbey) Omodunbi: There has been a very strong recovery. So the labor market has improved, and many economic indicators are trending in the right direction. But still the Dayton region is lagging behind the national economy. So employment is about 4% below the pre-crisis level in Dayton. Compare that with the U.S., where it’s about 2% below the pre-crisis level. So there’s still a lot of ground to cover.

I expect there to be improvements in the labor markets and starting in 2022. There are a couple of industries which I think are going to drive employment growth.

So first manufacturing. Manufacturing had a rough year in 2021 due to supply chain disruptions, and semiconductor shortages and so on. I expect to see improvements in those sectors this year.

Also education and health services, that sector is going to also drive job growth. The Dayton economy is relatively more stable than many other economies due to the industrial diversity. So you have the Wright-Patterson Air Force Base, education and health services is also a big sector there. So the economy has done better, and it’s been less volatile than other economies in the past. But in 2022 I expect manufacturing, education and health services, and also the government sector to contribute to job growth and the innovation economy.

Richard Stock: There’s two sides to the region at this point with respect to the thriving situation. You think about the rental markets and the pressure on rental rates, they’re very concerned that eviction rates are going to be driving up, they never really disappeared in the last couple of years. And that has significant impact for a lot of low income families whose wage rates are not rising at the same rate as those rental rates are. And they were already under pressure. So I think there’s sort of two economies out there for Dayton — one that’s going to be doing very well at the upper end and another group of people that are really, really still going to be suffering because some of the sectors where those people work, leisure and hospitality in particular, are going to continue to lag.

Q: The region has been very successful in attracting logistics companies, many of which use a large portion of the low skilled labor pool. Meanwhile, established local companies are struggling to attract those applicants for jobs that offer competitive wages and benefits and the opportunity for people to get skills training that can lead to better pay in the future. What more can be done to help those existing firms which need a skilled workforce and attract more companies like those?

Julie Sullivan: In economic development, our role is to support, not only attracting companies to come into the region and continue to add to our economic base, but to make sure that the existing industry that we have here that’s oftentimes homegrown and been with us for a very long time, to make sure they continue to see success. So it is both. Our goal is to add a variety of jobs into the region and across sectors to create opportunities for all of our residents. We want those jobs to be diverse both in industry and in pay, everything from entry level up to highly skilled career professionals. We’ve worked hard on that diversification since the Great Recession. We found with losing large established entities like NCR, GM, Delphi, etc., we don’t ever want to be in that position again where we’re dependent on a few major employers.

(Another part of that question) really gets to is how can employers compete when the job markets is tight like the position we find ourselves in now? We often hear from businesses that the ability to have multiple candidates apply for an opportunity, that’s really not the environment that we’re in. Companies need to be working hard to not only attract that talent and leverage the resources available in the region to do that work, but also be thinking of and be mindful of how do you retain that talent? That does include being mindful of what your wages look like, but it also means outreach to educate potential candidates about the jobs within their organization and what that career path can look like. There’s organizations that are working on this every day. One in particular, I might point out is the Dayton Region Manufacturers Association. They’re doing a really great job of reaching out to middle school and high school students to help them understand the industry and the excellent programs that are available through our career technical schools, many of the public schools have programs at this point, and our community colleges have programs available to train them. So I just encourage businesses, be sure that you’re reaching out to the resource partners, Sinclair Community College, Clark State College, the Job Center, your regional manufacturers association or whatever association might represent your industry. These are all organizations that are available and want to be of assistance to you as you continue to grow in the region and make sure you can source the talent that you need.

Q: There’s been a lot of research on the unequal nature of the economic recovery for people of color specifically, and what are some potential approaches or interventions that would help address that inequality?

Whitney Barkley: When we look at communities of color, traditionally, these communities have already been disadvantaged. And because of the coronavirus and the things that we’re seeing now, I think we’re seeing a result of things that have been continued. So occupational segregation, economic exploitation, employment discrimination —these are all things that I think are key factors that put people of color at a greater risk of unemployment, and limit their ability to weather some of these economic downturns.

Now, when I look at solutions, these are a couple of things that come to mind. One of the big things where we see a push forward, especially with the gender wage gap, and just wage gaps in general, is showing transparency in wages. So companies sharing what employees make so people know their options. Right now, I think people have choices. They recognize that they have choices now. They can shift and pivot, and do things a little bit differently. But I think that will help, in a sense, let people know kind of where they are in the process.

I also always advocate for entrepreneurship. I don’t think entrepreneurship is the solution to everything, but I think it can help. As an entrepreneur you have more control on what you can charge. You can understand ultimately what your value is. That’s based on a number of variables, but it gives you more flexibility and freedom to pursue your own business and to really set those goals for yourself rather than allowing an employer to do that for you. Also using programs like the Greater West Dayton incubators to avoid some of those pitfalls of business.

Having more access and exposure to higher paying career paths is something that’s important.

And then when it comes to economic relief, things that are a little bit more targeted help. Really looking at the specific needs of what people need, like childcare, transportation, those are things that ultimately can affect someone’s employment or their entrepreneurial ventures.

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