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County ground zero of job growth between Cincinnati, Dayton

March 14, 2013  |  Dayton, Ohio Butler County ground zero of job growth between Cincinnati, West Chester

By Chelsey Levingston

JOURNAL NEWS

The economies of Cincinnati and Dayton, two metro areas near each other along Interstate 75, are traveling in very different directions, an analysis of labor data shows.

While the Cincinnati metropolitan added thousands of jobs in 2012, the Dayton metro had the weakest growth of the state’s largest metros — Akron, Cincinnati, Columbus, Cleveland, Dayton and Toledo, according to employment figures from Ohio Department of Job and Family Services’ Labor Market Information.

Cincinnati’s 15-county area added 4,700 jobs last year; Dayton’s four-county area lost about 300 jobs, according to revised state estimates of employment released March 8.

Butler County is caught in the middle, on ground zero of growth between the two major metro areas. Last year, Butler County, considered part of the larger Cincinnati market, added an estimated 3,300 jobs. Metro estimates are seasonally adjusted, but local figures are not.

West Chester Twp. officials said a majority of jobs were created in the township.

Local economists say the Cincinnati and Dayton economies differ in key industries impacting job growth.

“These two economies do share a lot in common but they’re also dissimilar in critical ways, which is why we’re seeing different outcomes,” said LaVaughn Henry, vice president of the Cincinnati branch of the Federal Reserve Bank of Cleveland. “Where the jobs are growing, they’re growing in sectors that tend to be more dependent on higher educated workers.”

One high growth industry nationally is the professional and business services sector. The entire Cincinnati market, including Butler and Warren counties, saw job growth in this sector above national averages, said Tom Traynor, chair of Wright State University’s economics department.

The professional and business services sector comprises companies that serve other businesses, such as public accountants, attorneys, waste management services, consultants and data management services.

During the past 15 years, the industry grew 25 percent nationally; 13 percent statewide; and about 30 percent in the Cincinnati market, according to U.S. Bureau of Labor Statistics data. In Dayton during that time, growth in this sector was essentially flat, declining about 4 percent, Traynor said.

“I view it as important because it’s been a big growth sector nationally, it’s been a big growth sector in Cincinnati,” Traynor said.

But the sector faced strong “headwinds against that industry” in the Dayton area, he said.

Dayton’s manufacturing industry during the past 15 years dropped nearly 50 percent, losing almost 40,000 jobs. In the Cincinnati market, manufacturing declined 23 percent, a loss of 34,000 jobs.

Total Quality Logistics — a fast-growing Clermont County freight brokerage firm in the business services sector — opened a Butler County office in 2012. It began in 2009 a national expansion to serve more of the domestic full truckload market.

“We are a service provider within the transportation industry, and the key to our company’s growth is attracting hard working, ambitious individuals to this fast-paced, high growth industry. We start offices in cities where our employees want to live,” said Kerry Byrne, executive vice president.

Total Quality attributes the company’s growth to its position in a growing trucking industry and around-the-clock access provided to customers.

“Customers choose to work with TQL because we provide them with a dedicated account representative from the moment their freight is picked up until the moment it is delivered,” said spokeswoman Kristine Glenn.

Within two to three years, Total Quality plans to grow its new West Chester Twp. office to about 100 Butler County employees.

In terms of economic indicators such as unemployment rates and construction permits, things are improving in Butler County, said David Fehr, county director of development. The county’s unemployment rate went from more than 8 percent in January 2012 to end the year at 6 percent.

“Folks are telling us it’s picking up, but it’s not at the rate they would like,” Fehr said.

Henry, of the Federal Reserve, said Cincinnati’s economy is invested in the right areas to grow.

As of the end of 2012, employment in professional and business services was about 16 percent of Cincinnati’s economy, and 13 percent of Dayton’s, according to Ohio labor figures.

Financial activities such as banking are now 6 percent of Cincinnati’s economy, compared to 4.6 percent of Dayton’s.

The bright spot for Dayton is educational and health services, which now accounts for 18.6 percent of Dayton’s total employment, versus 15 percent in Cincinnati.

The state does not give industry specific figures by county.

“The sectors in the economy that started picking up first, Cincinnati is already heavily invested (in),” Henry said.

At first glance, Cincinnati and Dayton’s economies seem to have the same manufacturing base, about 10 percent of the total of both economies. But by breaking that down further, Henry said Dayton’s economy is more exposed to durable manufacturing than Cincinnati’s more advanced manufacturing growth.

Durable manufacturing of products such as refrigerators and cars is growing slower, he said.

The small percentage differences in the share one industry sector has in Cincinnati compared to Dayton adds up to thousands of jobs, Henry said. One of the most pronounced differences between the markets is government.

Government employment makes up nearly 17 percent of Dayton’s economy. It is 12.5 percent in Cincinnati. Coming out of a recession, U.S. defense spending cuts present a challenge for Dayton’s recovery, experts said.

Ed Blake is Miller-Valentine Group’s chief financial officer and chief executive officer of commercial business. Miller-Valentine, a developer, property manager and construction company, has main offices in Cincinnati and Dayton.

“What’s interesting for us as a company is we are doing more with manufacturing; I would say distributors, assembly, private-owned business than we’ve done in a long time,” Blake said.

“The difference to me is Cincinnati is just bigger, deeper and more diverse and doesn’t have a bigger engine that’s in total recession,” he said. “And in Dayton one of the bigger engines in the market has just shut down.”

Butler County economy by the numbers

179,600 total county employment in December 2012

3,300 estimated jobs added from December 2011 to December 2012

2,000 jobs West Chester Twp. estimates the township created in 2012

27,500 Hamilton city employment in December 2012, up 500 jobs from December 2011

22,300 Middletown employment in December 2012, up 400 jobs from December 2011

SOURCE: Ohio Department of Job and Family Services