Fed economist: Local job growth faltering

Last edited 12:27 p.m., June 30, 2015

Springfield-area business professionals feel positive about the local economy this year, but those feelings aren’t expected to translate into job-growth figures that are more impressive than last year, according to an economist with the Federal Reserve Bank of St. Louis.

Charles Gascon, a senior research support coordinator with the Fed in St. Louis, was the featured speaker yesterday at a Springfield Business Development Corp. economic briefing attended by 120 members.

At the luncheon meeting held at the DoubleTree Hotel on North Glenstone Avenue, Gascon shared details of the Fed’s February survey of 114 members of the area business community, as well as economic data that viewed Springfield in a larger context.

According to the survey, more than two-thirds of respondents felt better about job growth potential in 2015 than 2014 – 43 percent said they expected 2015 to be “somewhat better,” and 25 percent said the local economy this year would be “better” than it was last year. Rounding out the survey, 24 percent said it would be “about the same” while 6 percent predicted the economy would be “somewhat worse” and 3 percent said it would be “worse” than the year before.

Overall, job growth in the Springfield metropolitan statistical area was up about 2 percent in 2014, Gascon said, adding final numbers won’t be out until the fall. His forecast puts 2015 area job growth at under 2 percent compared to last year. Year-to-date job growth is at 1.8 percent, he said.

“Springfield’s economy is at about $16 billion, based on gross output,” Gascon said, noting the figure represents roughly 6 percent of the total state economy.

With nearly 450,000 living in the Springfield MSA, the per capita income is about $32,000 per year. That is well below the U.S. average of $39,600, but cost of living in the area is about 11 percent less than the average across the country. Based on the difference, Springfield’s “real income” is estimated at roughly $36,000, Gascon said.

He said survey respondents were asked what they felt were strengths and weaknesses in the area. Among strengths was a diverse economy and the presence of the health care sector as a major employer.

“Seventeen percent of the region’s workforce is employed in the health care sector, which is about 30 percent more than the national average. It was instrumental, particularly during the recession, when most sectors were laying off jobs,” Gascon said. “Beyond health care, there isn’t one sector that drives growth in the region.”

Another positive is the local unemployment rate, which is below state and national averages. Through the first quarter, the national unemployment rate averaged 5.5 percent, while it was 4.7 percent in Springfield. The state unemployment rate was 5.8 percent in May, according to Springfield Business Journal archives.

While cost of living in the area is cited by local professionals as a plus, poverty, low wages and the quality of the workforce were named as weaknesses.

“Many said there was a lack of qualified employees,” Gascon said. “Difficulty attracting skilled workers is something we see all across the district.”[[In-content Ad]]