Business leaders bullish on Dayton region’s 2021 economic prospects



There are good reasons to be optimistic about the Dayton region’s 2021 economic outlook, but business leaders say the coronavirus pandemic’s economic toll will remain apparent even as vaccines bring hope for a return to normal life.

“It’s going to be a year of recovery. The question is how quickly and how evenly will the recovery come,” said Ohio Lt. Gov. Jon Husted. “I promise this and I will not qualify this: 2021 will be better than 2020.”

Husted was one of nine business leaders who the Dayton Daily News interviewed about the region’s economic prospects in the upcoming year.

Here’s what they had to say.

What do you foresee as far as the Dayton region’s economic recovery near-term and longer-term in 2021?

“The Dayton Metropolitan Area will be a tale of two cities with modest employment growth that will be characterized by two elements,” said Richard Stock, director of the University of Dayton Business Research Center. “Modest employment growth in the private goods and services sectors but a squeeze on local and state government public sector employment. And modest income growth for those who have jobs but a significant minority of working age adults unemployed and not in the labor force who will suffer serious material deprivation.”

Stock said the 11,359 continuing and initial unemployment claims for the Dayton Metropolitan Area for the week ending December 19 are significantly less than the spring peak of 58,217 on April 25, but three times higher than the 3,564 posted March 14, just before COVID-19 closings slammed the economy.

The region’s 5.2 percent unemployment rate is much less than April’s 15.99 percent rate but Stock said the region’s 375,800 existing jobs in November lag November 2019 by 19,500.

“In the near-term, the economy will continue as it has for the past half-year. Most industries will continue to experience lower demand, and some will continue to experience supply chain problems as the pandemic continues to impact economic activities, either through COVID-19 illnesses or the precautionary measures taken by people,” said Thomas L. Traynor, dean and professor of economics at the Wright State University Raj Soin College of Business. “As in the recent past, as COVID-19 cases, hospitalizations, and deaths rise economic activity declines and unemployment rises.”

But even as worsening COVID-19 spread places downward pressure on the regional economy in early 2021, Traynor said the relief package approved in late December by Congress and vaccine distribution will boost the economy and things will gradually improve.

“I think a strong recovery is likely to begin once the pandemic is behind us and we can return to normal living. This is due to the large proportion of households that are in strong financial shape,” Traynor said.

“Nonetheless, there is a small but notable portion of households, particularly those whose income is reliant on the brick-and-mortar retail and restaurant/entertainment industries that are and probably will be in very weak financial shape.”

Bill Adams, senior vice president and senior economist for PNC Financial Services Group, said the Dayton region fared better than the national average for nonfarm payroll employment, which in November was 4.7 percent lower than February locally but 6.5 percent lower nationally.

“Dayton has a couple of positives that helped it weather the crisis better than the rest of the country. As in past economic downturns, the Wright-Patterson Air Force Base provides ballast to the area economy, insulating it from cycles and shocks,” Adams said. “In this downturn in particular, Dayton lucked out by not having a large share of its local economy in tourism, energy, or hospitality.”

Credit: Contributed

Credit: Contributed

But those types of businesses locally are among those that suffered most.

“Our small businesses are really struggling and they still need our help. Until the vaccines are widely available, more downtown employees come back into their offices, our large venues reopen and people feel more comfortable venturing out, the first half of the year will be really difficult for our small businesses,” said Sandy Gudorf, president of the Downtown Dayton Partnership.

She said helping those small businesses stay open now needs to be a primary focus and she is heartened that even during the pandemic progress continued downtown.

“Downtown’s major projects continue to move forward, and it will be an exciting time,” Gudorf said. “In 2021, we will see the opening of the first phase of the Arcade, continued growth in the Fire Blocks and more progress on other downtown projects.”

Jeff Hoagland, president and chief executive of the Dayton Development Coalition, said Wright-Patt has grown and that is likely to continue.

“Air Force efforts such as Agility Prime and the new Dayton DigitalWERX represent opportunities for businesses to support dynamic, cutting edge work with broad applications in defense and private industry,” Hoagland said. “Supporting these efforts will create opportunities in our community.”

Other than Wright-Patt what else in our Dayton region should give us hope that businesses, jobs and individual incomes will revive in 2021?

Montgomery County officials are forecasting a strong 2021, said Erik Collins, Montgomery County director of community and economic development.

“Even with the uncertainty of the pandemic, both residential and commercial building permits had robust numbers in 2020. This data only supports our optimistic outlook on near-future development in the Dayton region,” Collins said.

“The county’s longer-term economic development strategy centers on our existing businesses — the backbone of the region’s economy,” he said. “In 2021, we’ll continue to work toward a diverse economy with a sharpened focus on industries such as advanced manufacturing, aviation and aerospace, e-commerce, and medical technology.”

Garth McLean, Montgomery County interim director of workforce development, said the county is projecting continued growth in several high-demand industries.

Credit: Contributed

Credit: Contributed

“These include information technology, aerospace, medical, transportation, and manufacturing,” he said. “Of the numerous career opportunities available and industries present within our region, these five have withstood the pandemic more than others, and we’ll continue to get our residents into training programs for those jobs.”

Collins said the region saw large road infrastructure investments in 2020 that will help support existing and new business. Among them: the U.S. 40 expansion near the Dayton International Airport, the Third Street bridge rebuild in downtown Dayton and the interchange at I-675 and Wilmington Pike.

“Our pipeline of economic development projects is strong, and we hope to see continued job growth throughout 2021,” Hoagland said.

The experts said a successful vaccination effort is critical.

“Our local businesses have shown incredible resilience during the pandemic, and we all want to get back to normal,” Hoagland said. “We hope widespread vaccination efforts will help businesses be able to resume regular operations and allow businesses dependent on in-person interaction to fully re-open.”

What hurdles does the Dayton Region face?

“The primary hurdles the region faces are the sectors that have experienced the greatest declines in business due to the pandemic,” Traynor said. “The industries that have suffered the largest declines in employment are retail stores, leisure activities, state government and local government.”

“Businesses in the industries most impacted and the households depending on them, both owners and employees, may need many months or even years to recover,” Traynor said.

State and local government revenues took a major hit during the pandemic, which Stock said “will force governments to forgo essential capital projects and squeeze further essential public services.”

Stock also fears a wave of evictions will begin in spring 2020 without new assistance. And he said a shortage of quality affordable childcare will cause women to delay re-entry into the workforce, resulting in “slower growth in income both in the short term and in the longer term.”

Workforce issues had been business leaders’ biggest concern pre-pandemic and will continue, making investments in workforce development and other post-high school education critical.

““The unbalance between supply and demand of qualified workers is and has been a major problem facing employers. (That’s) especially true in manufacturing, logistics and the trades,” Tom Maher, franchise owner of Manpower of Dayton Inc., said. “Our region should undertake a thorough results-focused assessment of the multitude of workforce development programs. Those that do not show positive measurable results should be discontinued.”

Husted said the state will have hard budget choices to make but it will be important to provide stability and keep workforce issues front-and-center.

“I believe there is some pent up demand out there and I know some projects that are going to be coming that will help unleash some of that pent up demand,” Husted said. “We have to focus on training and workforce issues to try to make sure that everybody has a chance to participate in the recovery.”

Employer hiring intentions - Dayton Metropolitan Statistical Area - First Quarter 2021

Increase - 19%

Decrease - 5%

Maintain - 73%

Unsure - 3%

Source: Manpower Group Employment Outlook Survey

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