CHARDON, OHIO Dr. Jack Kleinhenz, Senior Regional Economist, Center for Regional Economic Issues at the Weatherhead School of Management spoke to a diverse group of business leaders, entrepreneurs and banking officials on Wednesday to address the state of our Regional Economy. His forecast for the nation in general, and our Northeast Ohio region in particular, was upbeat.
Hosted by The Middlefield Banking Company as a service to their clients, the economic luncheon brought together a diverse group of business representatives from Geauga, Portage and Ashtabula counties. Over seventy-five polymer, automobile parts manufacturers, small retail, service and industrial business owners and managers came together to seek information about how oil prices, the political climate and employee issues affect the marketplace today and tomorrow.
With data analyzed within 48 hours of his presentation, Dr. Kleinhenz pointed to stronger than expected growth in the fourth quarter of 2004 by saying that the economy “is not getting the respect it deserves.” He said current inventory investment is good and that manufacturing matters to this economy. The national political campaign has created a temporary interrupt to the economy, which will ease after November 2nd.
Pointing to several positive aspects of the economy, Dr. Kleinhenz indicated that although oil prices are exceedingly high, if we adjusted the $35 barrel price for inflation seen in the 1970s that precipitated a recession - we would currently be seeing oil at $75/barrel. He also declared that gains in productivity have led to overall job loss and our workforce going into 2005 is more productive. He predicts, with an eye toward the National Association of Business Economists, a 2% growth in employment in 2005, while pointing to a 13.5% growth in profit. Gross Domestic Production should also see a rise by 3.3% in 2005.
Speaking to the poverty classification that Cleveland recently received and how that affects the overall local economy, Dr. Kleinhenz said until the numbers non-working population fall in line with the employed, we will continue to see a drain on the local economy. Costs for social services will also continue to rise in the meantime, with the burden being borne by the employed.
Dr. Kleinhenz is CEO of Kleinhenz & Associates and is a member of the Governor’s Council of Economic Advisors. He was formerly engaged by the Federal Reserve Bank of Cleveland and has served as chief Economist to the Greater Cleveland Growth Association.
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