The U.S. and Ohio economies will continue to recover from the Great Recession in 2015 with continued but slow growth, according to an economist with Ohio State University’s College of Food, Agricultural, and Environmental Sciences.
Mark Partridge, a professor who holds the C. William Swank Chair in Rural-Urban Policy in the college’s Department of Agricultural, Environmental, and Development Economics, said overall, 2015 looks to be a relatively good economic year as the U.S. and Ohio economies will continue to grow at reasonable rates.
However, “more innovation in policy is needed to shake both from the current path of relatively slow growth becoming the new normal,” he said.
Partridge, who specializes in the analysis of regional growth patterns, spoke during the Dec. 1 kickoff of the college’s 2014-2015 Agricultural Policy and Outlook series. The series will feature agriculture policy and economic outlook meetings that will be held at numerous locations across Ohio through Jan. 29.
The meetings will feature presentations by AEDE experts on key issues in the agricultural community for 2015, including policy changes, key issues, and market behavior with respect to farms, food and energy resources, and the environment.
Partridge said optimism about the national economy began in 2012.
“We are now in the 66th month of economic expansion, which is the sixth longest in U.S. history,” he said. “We are also on the path to see significant job creation in 2014, which will be the best year for job growth since 1999.”
Since the Great Recession - which began in December 2007 and ended in June 2009, and which was the most severe period of slowed economic activity in the U.S. since the Great Depression - the general patterns of regional U.S. growth that existed over the 1960-2007 period have mostly reestablished themselves, Partridge said.
Additionally, based on data from the International Monetary Fund and the Organization for Economic Cooperation and Development, the U.S. now leads the world in economic growth, a trend that is expected to continue through 2016.
“The most educated places grow the fastest in the long run,” he said. “Educational attainment is the most robust predictor of economic growth.” However, based on OECD data, U.S. educational attainment is lagging most of the developed world, a key element to consider for national economic growth beyond 2015, Partridge said.
At the regional level, Ohio and the Midwest have faced challenges in recovering from the Great Recession at the same pace as the national economy, he said.
Ohio suffered significantly during the Great Recession and has struggled to recover as quickly as other states in the region and the country, mainly due to its continued reliance on employment in the manufacturing sector, Partridge said.
Manufacturing employment in Ohio had a substantial decline at the onset of the recession with employment plummeting by 20 percent, he said. By August 2014, manufacturing employment remained 11 percent below pre-recession levels.
Regionally, Partridge said Wisconsin matches the U.S. average in economic growth, followed by Indiana. Ohio, Michigan and Illinois lag the nation and are about equal to one another in their growth patterns, he said.
“How can Ohio better perform to match national average growth rates?” he said. “First, it takes a long time to turn around a state’s fortunes, and sometimes it is just blind luck.”
To date, the state has primarily used tax policy to improve its economic performance, and it has been hard to measure its success, Partridge said.
“The economic performance of cities and states is often attributed to the state government’s policies,” he said. “However, it remains unclear how these policies truly affect a state’s economy, something that voters must be conscious of before commending or reprimanding these public officials.”
Creativity in terms of education and human capital development for the workforce are key areas that warrant more attention, Partridge said.
Smart infrastructure investment and reforming the tax code so small businesses are not at a disadvantage at both the state and national levels should be considered, he said.
Partridge’s presentation was drawn from a recent policy paper released in November by his team at the C. William Swank Program in Rural-Urban Policy. The paper, “Growth and Change: Tracking Ohio’s Recovery from the Great Recession,” was written by Partridge and Clare Cho, a doctoral student studying with him, and examines Ohio’s economic recovery since 2009. To read the full paper, visitgo.osu.edu/u9D. To read Partridge’s policy brief prepared for the 2014-2015 Agricultural Policy and Outlook series, visit go.osu.edu/u89.
The Agricultural Policy and Outlook series meetings are open to the public. A meal is provided with each meeting and is included in the registration cost. More information on the meetings, including policy briefs and presentation files from each of the presenters, can be found at go.osu.edu/2015outlook.