Thursday, September 06, 2012

Ohio River Valley Rebound

Let's start this economic geography journey at the eastern terminus of the Ohio River. Via Chris Briem, Pittsburgh is booming:

Pittsburgh's economy, in particular, has become a darling of the Great Recession because of its relative strength, supported mainly by educational and health care jobs. Rockwell said it's an example of the potential for Buffalo.

The potential for Buffalo is a bigger, non-local market for health care services. Pittsburgh is an industry exporter in the eds and meds sector. That, not the Marcellus Shale, explains why the region is doing so well. Heed my warning, John Kasich.

As I've blogged about before, Pittsburgh isn't the only Ohio River city enjoying good times. Since then, I've taken interest in the barge traffic and track the news coming from this part of the country:

The iron castings are evidence of a seminal economic transition that is unfolding in the six-state Ohio River Valley, a region that once encompassed much of what used to be called the Rust Belt. “The coal trade is way down,” said Mr. McKinney, 54, who has spent more than 30 years moving bulk cargo on the Ohio River. “But we’re doing a lot more commercial cargo now. We’re seeing more steel, more rock, more concrete. Somebody’s making money.”

Business at the iron and steel foundries in Kentucky and Ohio is soaring. Automakers are ordering more steel. Steel pipe and steel construction equipment are needed to tap the deep natural gas-saturated shales of Ohio, Pennsylvania and West Virginia. General Electric has an $800 million program in Louisville, Ky., to retrofit buildings to make new types of appliances. The company said it had hired nearly 900 workers this year and would hire several hundred more.

There are many ways to assess economic performance. On Wall Street and in Washington, data about product inventories, plant openings, business starts and employment are assembled into economic assessments, many of which report that the national economic recovery has sputtered and nearly stalled.

But those same conventional metrics tell a more encouraging story for the Ohio River Valley. Between June 2011 and June 2012, Ohio generated 100,000 new jobs, the fourth leading state in job generation behind California, Texas and New York, the Bureau of Labor Statistics found. In one month, from this June to July, Indiana generated 12,500 new jobs, ranking it fourth among states in that period. Ohio’s unemployment rate dropped 1.7 percentage points between July 2011 and this past July, a larger percentage drop than all but three other states in that period. West Virginia’s unemployment rate in July was 7.4 percent, according to bureau figures, nearly a full percentage point below the national rate of 8.3 percent.

By virtue of transporting the basic bulk materials that make the country work, Mr. McKinney and the rest of the Mike Weisend crew members are afforded a closer and, arguably, more immediate weekly measure of the economy. The details they are piecing together as they drop tows of steel at modern plants in Kentucky and West Virginia, and pick up tows of chemicals and grain in Ohio and Illinois, are evidence of the steadily strengthening and modernizing economy evolving along the Ohio River Valley after decades of Rust Belt decay.

I think the Mike Weisend crew are watching the birth of a new global economic epoch. The Ohio River Valley is the cradle of this transformation. Pittsburgh is the centerpiece.

This story portends an accelerating recovery. The Ohio River Valley is leading the country out of the Great Recession. America's future can be found here. The Rust Belt has come a long way over the last two decades.

1 comment:

C. Briem said...

What is kind of sad is that nobody noticed the caption on the photo is wrong. Sure looks like coal to me.