Ohio has had slow economic growth, Cleveland Fed report says
Ohio's economic growth has slowed in recent years, according to a Cleveland Fed report. Manufacturing contributed to slow growth. A report by the Federal Reserve Bank of Cleveland has found that Ohio's economic growth has slowed in recent years. From 2021 to 2023, Ohio's gross domestic product (GDP) grew about a half percent, compared to the nearly 3% growth of the United States. This growth ranked Ohio 45th among states. However, with a GDP growth of about 2.5%, Ohio ranked 31st among states and the U.S. GDP was about 4.3%. The report also highlighted that even ranking nationally in a sector that lacks the economic heft of manufacturing or FIRE, or finance, insurance and real estate, can significantly impact GDP.
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Ohio’s economic growth has slowed in recent years, according to a new report by the Federal Reserve Bank of Cleveland.
From the fourth quarter of 2021 through the third quarter of 2023, Ohio’s gross domestic product (GDP) grew about a half percent. GDP reflects the value of all goods and services produced by an economy in a given time period. It is often used as a measure of how well an economy is doing.
During the same period, the GDP in the United States grew nearly 3%. Ohio’s economic growth ranked it 45th among states.
At the end of the fourth quarter of 2021, Ohio’s economy wasn’t lagging by as much. With GDP growth of about 2.5%, Ohio ranked 31st among states. U.S. GDP was about 4.3%, found the report by Guhan Venkatu, a senior policy advisor in the Cleveland Fed’s research department.
GDP growth is influenced by which industries did well, which struggled, and whether their share of the economy is large enough to have a sizable impact. Sectors including professional services and healthcare saw significant growth in the time period. But such growth wasn’t enough to offset what happened in Ohio’s two largest sectors, manufacturing and FIRE, or finance, insurance and real estate. They both contracted.
“Manufacturing and FIRE tend to be important to explaining GDP growth differences across states, partly because these industries typically account for a fair amount of overall activity, almost a third at the median,” Venkatu wrote.
The report also showed how even ranking nationally in a sector that doesn’t carry the economic heft of manufacturing or FIRE in Ohio isn’t enough to substantially impact GDP. Venkatu wrote that the arts, entertainment and recreation sector here rose by more than one-third, which was the second largest increase among all states.
“However, this industry’s relatively small share of overall output— about 1 percent in Ohio and in the United States— meant that its contribution to the state’s total GDP growth was limited,” he wrote.