For this story, the Dayton Daily News asked experts and people in the local business community about their forecast for the regional economy in 2025.
“It’s been an interesting economy,” said Dave Dickerson, president of business development for Dayton’s Miller Valentine Construction. “It’s been progressing. There are certain sectors that are doing better than others. And things may change based on the change in Washington.”
“The region is positioned really well,” said Vince Lewis, the University of Dayton’s associate vice president of entrepreneurial initiatives.
In a recent economic briefing, Ed Knotek, senior vice president and director of research for the Federal Reserve Bank of Cleveland, said he sees distinct momentum. The economy was generally strong in 2024, supported by consumer spending.
Today, employment is healthy, even as inflation is stuck above 2%, though it has moderated, he said.
And the Fed expects interest rates to sink this year, although perhaps at a slower pace compared to 2024.
Growth ― but not explosive growth
Notably, though, local job growth hasn’t been amazing. Nine of the 18 metro areas served by the Cleveland Fed have recovered all jobs lost since the start of the pandemic, but their recovery lagged behind other U.S. cities, according to a new report from the Cleveland Fed.
That includes Dayton.
Employment in the Fed’s Fourth District — an area that includes Ohio, western Pennsylvania, the northern panhandle of West Virginia, and eastern Kentucky — metros grew by 0.7% from February 2020 through March 2024, compared with 3.8% for all U.S. metro areas during the same period.
Employment in Dayton in that time grew only +0.3%, leaving it in the bottom 10 mid-size cities in the area served by the Cleveland Fed, along with Akron and Toledo. By contrast, Lexington, Ky. saw a 5.5% increase in jobs in that period.
Pittsburgh saw a 2.1% decline, ranked second-to-last among large metro areas nationally, while Cleveland’s 1% decrease also put that city in the bottom 10.
National gross domestic product grew at a “solid pace” last year, at about 2.5% through the first three quarters last year, Knotek said. Fourth quarter data hasn’t been released, but most economists expect growth around the 1.5% to 2.75% range.
“While consumers continue to spend at a pretty good clip, consumer attitudes are generally subdued compared with where they were before the pandemic,” he said.
The U.S. jobless rate was 4.1% in December 2024, low by historical standards and down drastically from about 15% in April 2020. “This represents a dramatic improvement,” Knotek said.
Anxious to ‘move forward’
Dickerson, Miller Valentine Construction‘s president of business development, sees a lot happening — and most of those with whom he speaks are generally optimistic.
Economic observers have been debating the upshot of tariffs and a de-emphasis on green technologies the second administration of President Trump is expected to bring.
Said Dickerson, “I think people are anxious to move past the election and move forward.”
Miller Valentine builds nationally, focusing on projects tied to food, consumer goods, logistics and distribution and advanced manufacturing, among other areas.
In Southwest Ohio last year, Miller Valentine shepherded projects for AES Ohio (on that company’s headquarters campus off Woodman Drive) and Solvita (in the Kettering Business Park). Outside of the immediate area, the company has also worked for Pratt Industries and Intraplás Packaging Solutions, Inc. in Van Wert.
Dickerson believes the market for big distribution and logistics sites has slowed because interest rates have been up.
But he sees reasons for optimism. “We had some great anchors we’ve had for a long time, obviously Wright-Patterson Air Force Base.”
Employment at the base has doubled in the last two-plus decades.
“We have been very successful regionally around the defense industry, and that continues,” said Joseph Geraghty, executive director of the Dayton-Montgomery County Port Authority.
Defense firm Anduril’s plans for a new Ohio manufacturing facility “is obviously going to support the entire state,” Dickerson said.
Some expect businesses like Anduril and Joby Aviation to create momentum the Dayton area will feel.
“They are going to create a supply base in the community,” Geraghty predicted.
“I say this every year,” Dickerson said. “Dayton, Cincinnati and Columbus are coming together. I think the region works well collaboratively.”
Ben Ayers, senior economist for Nationwide in Columbus, said Ohio tends to follow national economic trends. And right now, national trends are fairly strong.
Ohio job growth was strongest last year in health and education, construction and professional services, as Ayers sees it.
“We’re still pretty optimistic about the trajectory the national economy is showing,” he said.
Tariffs and risks
But “if you squint,” it’s easy to see concerns, Ayers added. Trump has pledged to impose 25% tariffs on products from Canada and Mexico by early February, hitting two of America’s biggest trading partners, and 10% tariffs on imports from China.
Such tariffs might complicate supply chains and result in a flurry of opposing tariffs against U.S. imports, economists say.
When Ayers hears talk of tariffs, he said he gets nervous.
“I think what it comes down to, people aren’t sure of what’s coming down the pike,” he said, adding that he has heard stories of consumers buying cars and appliances, spurred by fears of approaching tariffs.
“It’s a feeling more than anything,” UD’s Lewis said. “There’s a lot of uncertainty. We’re really not sure how tariffs are going to play out.”
Among the dozens of executive orders Trump has issued (as of Jan. 22), is a hiring freeze on federal civilian employees — an order affecting one of the region’s most important employment pools — and a mandate for federal workers to return to government offices, as well as a declaration of a national energy “emergency.”
In addition, delinquency rates for mortgages have been rising in recent quarters, Ayers noted.
“When we look at 2025, I think there are risks in the outlook that could slow down growth a little bit,” he said. “But we still feel that the odds of a recession are quite low.”
Business-owners like to keep a lid on economic drama, he added, “Our hope is that we won’t see anything too dramatic.”
Geraghty said the area is poised to take advantage of opportunities this year.
As projects the port has supported in recent years mature, the result will be job growth, he believes. For example, Sierra Nevada is building two new hangars near the Dayton International Airport.
Geraghty looks forward to seeing the Centre City project downtown come to fruition this year.
The port has supported affordable housing and market rate housing projects, Geraghty noted. “There’s a lot of work to be done to do those types of activities.”
Still, interest rates have dampened construction, he noted.
“Anecdotally, in my conversations with business owners, there might be a softness out there in the industrial sector,” Geraghty also said. “Nothing like a recession, but a softness.”
He doesn’t expect massive regional industrial expansions, due perhaps to more careful consumer spending.
‘Wild, wild west’
As UD’s associate vice president for entrepreneurial initiatives, the Greater West Dayton Business Incubator and the downtown Dayton Arcade business hub, among other local and university programs, are in Vince Lewis’ portfolio.
He watches conditions for start-ups, here and elsewhere.
“A big concern is the cost of capital,” Lewis said. “Interest rates are high.” If you’re a business that needs a large line of credit, that can become expensive quickly.
Still, the venture capital environment improved in 2024 compared to the year before, Lewis said.
Meanwhile, artificial intelligence or “AI” — the quest to use computing to design everything from software to bespoke cancer treatments —feels like the “wild, wild west,” Lewis said.
The Air Force Research Laboratory, at Wright-Patterson, is advertising for a new chief knowledge, data and AI officer. A spokeswoman for AFRL, however, said in recent days that the lab is looking for guidance on filling that role and others in the wake of a new presidential executive order freezing federal civilian hiring.
“Technology plays a big part in the local economy and what we do,” Lewis said.
As always, employers worry about workers.
“I think labor is still really an issue,” Lewis said.
Employers still struggle to find good people and pay them the wages they can afford and workers deserve.
Employment Change, Large and Midsize Metros, February 2020 through March 2024:
Lexington: +5.5%
Columbus: +3.7%
Cincinnati: +2.3%
Dayton: +0.3%
Akron: -0.7%
Toledo: -0.7%
Cleveland: -1.0%
Pittsburgh: -2.1%
Source: Federal Reserve Bank of Cleveland
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