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Economic report: Area lagging but signs of good things to come


CLEVELAND — Northeast Ohio’s economic health is not robust, and while it continues to lag behind many metropolitan areas nationally, there are signs of good things to come, such as the recent announcement of a $24.6 million investment in a major electric car battery factory planned for Elyria.

That’s one of the pluses cited by an annual study commissioned by The Fund for Our Economic Future, a group of some 100 Northeast Ohio philanthropic interests, foundations and organizations working to increase the region’s economic competitiveness through greater government efficiency.

But data in the latest report were based on 2007 statistics, which pre-date the recession that has since plagued the U.S., and struck Northeast Ohio particularly hard.

Known as the Dashboard of Economic Indicators, the report issued Wednesday showed that the Cleveland-Elyria-Mentor area ranks 61st among 136 similarly-sized metropolitan areas nationally. That’s an increase from 66th place in 2000. By comparison, the Youngstown-Warren-Boardman area ranked 124th. Rankings included Pittsburgh, Dayton and Cincinnati, but not major cities such as New York or Los Angeles, according to Chris Thompson of the Fund for Our Economic Future.

The report’s rankings are based on nine factors such as poverty, ethnic diversity and ratio of business openings to closings. But the key factor is one that measures a region’s skilled work force and investment in research and development.

“That’s the one that most closely correlates to growth in per capita income,” Thompson said. “Better jobs will mean more income, and that will eventually lower the poverty numbers when the area comes out of the recession.”

Per capita income in Northeast Ohio stood at $36,338 in 2007, which was 6.3 percent below the $39,615 national average.

“That big battery expansion by BASF only happens if there’s a highly skilled work force in place,” Thompson said. “We need to keep investing in those areas, especially in a down economy. We’ve got to be able to keep attracting more R&D spending like that. That’s what translates into higher incomes.”

Last week, BASF Catalysts, the world’s biggest chemical producer, was awarded $24.6 million in federal stimulus money to build a $50 million plant next to its existing facility to produce a series of chemicals for lithium-ion batteries for a federally advocated electric car program. The money should add roughly 30 new jobs to the firm’s 185 employees.

Between 1997 and 2007, per capita income rose 9 percent in the Cleveland-Elyria-Mentor area. In Minneapolis, it rose 18 percent and in the Baltimore region it rose 27 percent.

Between 2004 and 2007, per capita income rose 4.1 percent in the region, while it grew 7.9 percent in the Pittsburgh area, Thompson said.

Not coincidentally, he said the Pittsburgh region has made more concerted efforts to boost its numbers of educated, skilled workers, and pump more R&D money into the western Pennsylvania area.

“These things pay dividends down the road in terms of income growth,” he said.

The Northeast Ohio region fell from 47th to 56th place in the amount of money spent on R&D. “The last few recessions were hard on this area, but the recovery was worse,” Thompson said. “We’re still lagging well behind the rest of the country.”

While the latest Dashboard report shows signs of hope for Northeast Ohio, Thompson cautioned against “over-selling those indicators.”

The Cleveland-Elyria-Mentor region saw a slight rise in the numbers of people with bachelor’s degrees — generally a reflection of an area’s skilled work force.

Contact Steve Fogarty at 329-7146 or

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