As the GOP descends upon Cleveland en masse for the Republican National Convention, the region’s economy is taking a pause after a steady period of expansion.
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“Things are a little less positive, going from steady to stable,” said Mark Schweitzer, of the Federal Reserve Bank of Cleveland, during an interview with FOXBusiness.com. Still the region’s economy is coming off a “reasonably successful period” he added.
Manufacturing, which is a major economic driver for the region, was little changed according to the latest Beige Book released by the Federal Reserve last week. The report notes that the outlook by manufacturers “during the past few cycles was tempered” which may impact the third-quarter. The stronger U.S. dollar, which makes it more expensive for foreigners to buy U.S. goods, may be weighing on some of these companies, observes Schweitzer. Additionally, the unemployment rate in the area is running around 5.1% slightly higher than the national average.
Still the bright spot within manufacturing is the booming auto sector. Over the past year the region has benefited from record auto sales. 17.4 million units were sold in 2015 and experts expect more of the same give or take, this year as reported by FOXBusiness.com in June. “It has been a really solid period for manufacturers and autos are the lead here,” noted Schweitzer. In April, Ford (F) announced it will spend $1.6 billion to upgrade two manufacturing facilities in Michigan and Ohio. Ford’s Ohio Assembly plant, which makes cabs for the best-selling F-150 pick-up truck, will get $200 million of that.
Cleveland has also been getting a boost from other growth industries according to Cleveland Clinic President and CEO Toby Cosgrove. “Cleveland has gone under quite a renaissance over the last little bit, we’ve moved from sort of the manufacturing location to health care and technology,” he said during an appearance on the FOX Business Network’s Mornings With Maria. The Cleveland Clinic is among the top rated medical facilities in the nation with its heart surgery program ranked #1 by U.S. News & World Report.
Even so health care and tech are not enough to move the needle any faster in the region than what the United States has been turning in and dialing back. Just last week, the White House cut its outlook for U.S. economic growth. GDP is now expected to rise 1.9% this year before improving in 2017 to an expected growth rate of 2.5%.
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Economic forecasting, which has never been a perfect science, has become more challenging in just the past several months. With massive economic stimulus coming from the Bank of Japan and the European Central Bank coupled with unexpected political events such as ‘Brexit,’ the U.K.’s referendum to leave the European Union. New waves of global uncertainty have become real events that could curb global economic growth.
Here at home uncertainty is also raging as Donald Trump prepares to become the Republican Party’s official nominee this week and next Hillary Clinton is expected to do the same for the Democratic Party.
From there the two will compete even more fiercely to win the White House in November.