An executive from Fifth Third Bank has lauded Dayton’s good economic prospects for 2013. While not an overly rosy prediction, VP and Chief Market Strategist John Augustine said last December that he foresaw no growth in the first quarter with gradual “momentum throughout the year.”
Yet this optimism may be ill-placed.
Just today, General Janet Wolfenbarger announced several cost-cutting measures at Wright-Patterson Air Force Base. They include a hiring freeze, temporary worker layoffs, and travel and maintenance restrictions.
As the largest employer in the area, Wright-Patt is the key player in the Dayton-area economy. As much is evident in political races ranging from Congress to county auditor. Rep. Mike Turner (and former Rep. Steve Austria) both stressed the base as a top priority.
Significant cuts at the base are probable and likely to inflict economic damage. As funds are cut, programs will be cast aside, causing defense contractor layoffs. Base layoffs also seem probable. The loss of spending consumer spending power would have great consequence for surrounding businesses as the unemployed slow discretionary spending. Long-term cuts might also lead to a flight of skilled labor from the area, costing businesses sales and governments tax revenue.
Dayton also lacks the natural resources of the eastern half of the state, namely oil and natural gas. This industry is fueling much of the growth in that part of the state.
After years of decline, the area has seen some improvement recent years. For instance, total employment for Montgomery County in 2005 totaled 277,000. By early 2010, that number had hit the bottom and climbed to 241,000 in mid-2012—modest, sure, but movement in the right direction.
Unfortunately, cuts at Wright-Patt threaten to stall that growth. Job losses could have ripple effects similar to the demise of General Motors and Delphi. And while there may very well be reasons for optimism, there is also ample cause for concern.