Our region’s economy will probably continue to grow throughout 2025, but not as fast as the rest of the country.
That’s according to Northern Kentucky University economist Janet Harrah.
While speaking at the Northern Kentucky Chamber of Commerce’s Eggs ‘N Issues breakfast panel on Tuesday morning, Harrah said the region’s economy would continue to grapple with persisting issues, such as a housing shortage, a shrinking number of job openings and a nagging skills gap for more specialized roles.
“When you sum it all up, how do we look? Well, Cincinnati’s growth, apparently, is not going to be growing as fast,” Harrah said. “It’s not keeping up with the rest of the country. On the other hand, we have growth, which is good, but that rate of growth is swarming.”
National consensus finds that the United States economy’s real gross domestic product is expected to grow by 1.9% in 2025, while the Greater Cincinnati regions will be around 1.5, Harrah told LINK nky.
Generally, Harrah has found that Greater Cincinnati’s growth rate has nearly mirrored the national rate. However, new data suggests that as local population growth rates decline, the region’s growth rate will negatively diverge from the national rate.
“My question is, is this just a one-year anomaly, or is this a new pattern of growth where we are not growing as fast as the rest of the country?” Harrah asked. “I think if we look at some of the other data, we’re going to hint that this might actually be a new, emerging pattern where we are not growing quite as fast as the rest of the country.”
One contributing factor is that the Greater Cincinnati area’s economy suffers from slowing population growth, which directly affects the number of workers available in the civilian labor force. Harrah said that due to the decelerating growth rate of the population forecasted over the next 20 years, the civilian labor force will not grow as fast as it has in the past. Locally, the population growth rate is decelerating quicker than the national level.
“The rate of population growth is slowing,” Harrah said. “It is slowing in Cincinnati faster than it’s slowing nationally and we’re seeing that same pattern now in our civilian labor force.”
To address this trend, Harrah said local political and economic leaders must focus on promoting immigration to find more workers.
“This is a projection that we’ve done for BE NKY looking at the population, the working age population, and you can see that if we don’t change our immigration, our domestic immigration, in migration — our labor force, is actually going to start to decline between now and 2050,” Harrah said.
In addition, while overall regional employment is growing, it’s doing so at a slower pace than in years past. For example, Harrah noted that over the past year, Greater Cincinnati has seen an increase of 4,500 jobs, down from the 15,000 jobs added in 2023.
Moreover, there were industries that added more jobs than others, notably the hospitality and healthcare industries. Conversely, industries such as retail and financial services have shed jobs.
“We having slowing growth,” Harrah said. “We have labor shortages for stiff because even though we have people available to work as necessary when they have the skills that our employers need, we have a lot of differences across industries in the metropolitan area. We have some that are doing really well and some that are already starting to contract.”
On a national level, John Augustine, the chief investment officer at Huntington Bank, said inflation, which was a pervasive topic throughout the 2024 election cycle, is on track to decrease over the next year.
However, there are still unknowns that could upend that analysis. For one, the world is in a precarious geopolitical situation with the Russia, Ukraine war and the Israel, Hamas wars. These factors could slow geopolitical trade and, therefore, the global economy.
“We’re going to be five years out from the pandemic,” Augustine said. “So those are the four things on our mind for next year: inflation, the Fed, what are longer-term yields going to do? And are American companies going to stay productive?”
