An increase in manufacturing and financial services helped the Springfield region’s economy grow in the last year, but the area’s Gross Domestic Product shows much slower growth than a year earlier, a report showed Tuesday.
The report, released annually from the U.S. Bureau of Economic Analysis, showed the Springfield region’s GDP grew 1.9 percent from 2011 to 2012. The previous year the region’s GDP grew by 3.9 percent.
The GDP is the value of the goods and services produced in a given time period.
“It’s rising, but that’s a significant drop in the speed at which it’s rising,” said Fred Tiffany, an associate professor of economics at Wittenberg University.
Overall, the Springfield region’s economy was the 343rd largest of the 381 metro areas included in the survey, said Thomas Dail, a public affairs specialist with the BEA. Springfield’s rate of growth places it somewhere in the middle of the pack, around the 167th fastest growing metro area in the U.S., he said.
Of the 381 metro areas in 2012 included in the report, real GDP increased in 305 of those areas, mostly led by growth in durable goods manufacturing, trade and financial activities. The three metro areas with the fastest growth in 2012 were the San Francisco-Oakland-Hayward area at 7.4 percent, Houston at 5.3 percent and Dallas-Fort Worth-Arlington at 4.3 percent. The Dayton metro area actually declined by 0.7 percent in 2012, according to the report.
Like many regions, durable goods manufacturing was a significant contributor to the region’s economic growth. That segment of the economy includes manufactured items such as cars and appliances that are expected to last for several years. In the Springfield region, durable goods manufacturing contributed 1.35 percent to the region’s overall growth.
Manufacturing of non-durable goods, which could include items like beer, cigarettes, food and medicine, contributed 0.24 percent while financial activities contributed 0.84 percent. The report showed a reduction locally of 0.05 percent each in construction and professional and business services.
Growth appears to have slowed in the past year, but Mike McDorman, president and CEO of the Greater Springfield Chamber of Commerce, said it’s important to look at the trend over a period of several years. The region has had success in recent years attracting businesses such as CodeBlue and Thirty-One Gifts, and he said several other projects are in the works to make the region more attractive to business.
“When you look at three years ago, we’ve added close to 500 people on the payrolls,” McDorman said.
McDorman said work is being done to improve local business parks, improve streets and attract more visitors throughout Clark County.
“All these different projects people are starting to see are going to serve us well in the future,” McDorman said.
Manufacturing also plays an important role locally, and McDorman said he was not surprised that sector contributed significantly to the region’s growth in the past year.
“Obviously, Springfield has a strong manufacturing heritage and will continue to be strong as we move forward,” he said.
Still, the fact that the region’s economic growth slowed from 3.9 percent to 1.9 percent is something local economic officials should keep an eye on, Tiffany said. If the region’s economy was a moving vehicle, Tiffany said, the slower growth rate means the economy is still moving forward, but the driver took his or her foot off the gas pedal.
“We hope to have the economy grow every year,” Tiffany said. “When the rate of growth slows, that’s something that’s of concern.”