08.06.07
Economic Trends
The Cleveland Metropolitan Statistical Area
The Cleveland metropolitan statistical area (MSA) is located along the southern shores of Lake Erie. Counties within the MSA include Cuyahoga, Geauga, Lake, Lorain, and Medina. Ever since the turn of the twentieth century, Cleveland has been recognized as a manufacturing center, and despite the sector’s downturn, the region retains a high concentration of manufacturing jobs. In 2006, Cleveland’s concentration of manufacturing employment was 31 percent higher than the nation as a whole.
In recent years, the region has built an international reputation as a major player in the health care sector. Employment within the sector has grown rapidly, to the point where health care edged past manufacturing as Cleveland’s largest sector employer. The region’s employment concentration in health services and education is about 22 percent greater than is found nationally. However, the rise in the number of health care jobs is not characteristic of the overall employment picture.
Since the employment turnaround began after the last recession, total nonfarm employment in the U.S. has grown over 6 percent. In Cleveland, by contrast, employment growth has been flat. Decomposing the employment data into manufacturing and nonmanufacturing sectors, we see that the U.S. outperformed the local area in both categories. Since the last business cycle peak through 2006, the U.S. shed 16.6 percent of its manufacturing jobs, while Cleveland lost 23.4 percent. Likewise, in all nonmanufacturing sectors, employment in the U.S. rose 6.6 percent, while in Cleveland it declined 1.4 percent.
Looking at the components of annual employment growth helps us to pinpoint why Cleveland is lagging the nation. Manufacturing job loss is the main culprit, especially for the 2001–2003 period. Further, in 2002, several other sectors played significant roles in the region’s employment decline: the financial, information, and business services sector and retail and wholesale trade. In contrast, the education, healthcare, leisure, government, and other services category made a positive contribution to employment change in each year except 2003. In fact, this component was the major contributor to the region’s positive growth—albeit slight—in 2005 and 2006.
Employment trends similar to those observed in the Cleveland MSA and the United States between 2001 through 2006 continued into 2007. For the 12-month period ending in May, the U.S. reported higher employment growth than Cleveland in all industry sectors except natural resources, mining, and construction. On a year-over-year basis, total nonfarm employment in the U.S. grew by about 1.5 percent, compared to a 0.5 percent decline in the region.
Prior to middle of 2003, the MSA’s unemployment rate closely tracked the nation’s. However, since the beginning of 2004, the unemployment rate in the U.S. has averaged 0.6 percentage point less than is found regionally.
In addition to Cleveland’s overall decline in employment, the region has also lost population. Since 1970, the region’s population has declined almost 9 percent, to 2.1 million. This compares to 7.7 percent growth in Ohio and 47 percent across the U.S. It should be noted that Cleveland is not unique among MSAs in the Fourth District in this respect. Many regions in the district have seen their populations remain flat or decline over the past few decades.
Between 1980 and 2000, per capita personal income in the Cleveland metro area exceeded that of aggregate U.S. metro areas by an average of just over 4 percent. Part of this disparity can be attributed—at least until the recent past—to the large number of high-paying manufacturing jobs and Fortune 500 company headquarters in the region. Beginning in 2001, average per capita income in U.S. metro areas rose slightly above Cleveland’s and has continued to do so since. In 2004, per capita income in Cleveland was $34,078, compared to an average of $34,688 across all U.S. metro areas.
Looking at some selected demographic statistics, we see that the Cleveland metro area is almost on par with the United States in terms of the percentage of people who hold a bachelor’s degree or a higher degree—26.6 percent and 27.2 percent, respectively, and it exceeds the state’s share by 3.3 percentage points. The share of Cleveland’s minority population is slightly less than that of the United States. However, the share of black residents in Cleveland exceeds that of the nation by over 6 percentage points. Other minority groups are not as well represented in Cleveland as they are across the nation. Finally, the median age in Cleveland is slightly higher than in Ohio or the United States.
Selected Demographics, 2005
| Cleveland, OH MSA |
Ohio | U.S. | ||
|---|---|---|---|---|
| Total population (millions) |
2.1
|
11.2
|
288.4
|
|
| Percent by race | ||||
| White |
76.9
|
85.7
|
74.7
|
|
| Black |
18.8
|
12.3
|
12.1
|
|
| Other |
4.3
|
2.0
|
13.2
|
|
| Percent by age | ||||
| 0 to 19 |
26.9
|
27.0
|
27.8
|
|
| 20 to 34 |
17.5
|
19.3
|
20.1
|
|
|
35 to 64 |
41.8
|
40.8
|
40.0
|
|
| 65 or older |
13.8
|
12.8
|
12.1
|
|
| Percent with bachelor’s degree or higher |
26.6
|
23.3
|
27.2
|
|
| Median age |
39.0
|
37.6
|
36.4
|
|
Source: U.S. Department of Commerce, Bureau of the Census, American Community Survey.