Industrial Structure and Recession In Ohio

The regional impact of a recession is determined largely by the industrial structure of the regional economy. National business cycles, which differ in their degree of severity, are transmitted through the region’s industrial structure to the overall regional economy. A region in which the industrial structure is weighted toward more cyclically sensitive industries usually experiences more severe recessions than the nation as a whole. (In general, manufacturing industries are more cyclically sensitive than service industries; durable-goods industries, more than non-durable goods; and producer-goods industries, more than consumer-goods.) Regional business cycles, however, are more than simply the local manifestations of cyclical changes in industries at the national level. Factors unique to each region, such as differences in costs and other aspects of competitive advantage, influence the regional pattern of a recession, contributing additional structural drag (or downward pull) to regional employment.