Central Ohio's economy could see new challenges in 2024, including slower job growth than in other parts of the country.
Economist and founder of consulting firm Regionomics, Bill Lafayette, has outlined what may be ahead for central Ohio in the new economic year. He says the overall economy is expected to slow down. Lafayette says this will be the third year Ohio will underperform in comparison with what happens across the U.S. And he says experts agree there may be a “mild” recession.
“It will be nothing like the recessions that we had in the late aughts and in 2020,” says Lafayette. “It'll be a recession, more like the recession in 2001. A lot of people won't even really notice it. So that's going to contribute to slower growth in central Ohio.”
Lafayette says inflation that has plagued the economy for several years is expected to lower and stay in the mid 2% range by the end of 2024.
“It's going to help a lot,” says Lafayette. “It's going to, I think, start to rebuild the confidence in the economy. We might get a recession this year. And if we get a recession, it's going to reduce inflation at a faster rate. But overall, it's going to set us up for, I think, growth in 2025.”
Lafayette also points out rising housing costs as a contributing factor to stifling growth in the region.
“The Federal Reserve has already indicated that they're thinking about rate cuts in '24 and so rates will come down,” says Lafayette. “The heart of the problem with inventory is that there are those of us with 3% mortgages who certainly don't want to lose them. And on top of that, home building is nowhere near where it needs to be to satisfy the demand.”
Ohio’s unemployment rate remains low at 3.6%. That was slightly lower than the U.S. unemployment rate in November 2023, when the rate stood at 3.7%.
“The essential problem that we have in central Ohio is that there aren't enough workers to staff the jobs that employers are offering,” says Lafayette. “That's going to continue, perhaps to a somewhat less extent across the country.”
Lafayette says reversing the trend of net migration loss in central Ohio will be necessary.
“We lost 1,400 more people between 2020 and 2022 than we got,” says Lafayette. “And that's a huge change from the last decade. And that's the one of the biggest worries that I have. And I have to think that part of it is due to the rapid increase in house prices here.”
Last year’s announcements by Google and Intel on expanding their efforts to build data and manufacturing facilities in central Ohio, as well as other projects, will provide a bright spot for construction growth in 2024, Lafayette says.
