Network Regional Partner PLUS REVIEW Q4 Quarterly Economic Indicators 18 Counties of Northeast Ohio The Cleveland Plus economy continues to improve. The unemployment rate is almost 1% lower than the US rate and most major sectors manufacturing, services and construction continue to post year-over-year growth. is one of the industries fueling this growth. The shift from traditional manufacturing to advanced manufacturing is playing a critical role in the region s economic transformation. Between and 22, manufacturing Gross Regional Product (GRP) is projected to grow 39%, to a $43 billion sector of the economy.
MANUFACTURING ACCELERATES GROWTH IN THE CLEVELAND PLUS ECONOMY Historically, manufacturing has been a powerhouse in the Cleveland Plus economy. While manufacturing was hit hard in both NEO and the US during the recession, that same base is helping Northeast Ohio recover, and will be one of the primary drivers of the economy going forward. This report presents historical data, compares projections for manufacturing in Northeast Ohio with that of the US and identifies primary growth sectors. Change in Gross Product: NEO vs US, 199- =Gross Product in 199 Projected Change in Gross Product NEO vs US, -22 =Gross Product in +1% +5% +8% +4% +6% +3% +4% +2% +2% +1% -2% -4% -1% 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 213 214 215 216 217 218 219 22 NEO US NEO US Gross Product Reverses Trend, Projected to Grow Faster Than the US From 199 to there was a significant gap in the growth of manufacturing gross product between Northeast Ohio and the US. Both the US and Northeast Ohio grew in the early 9s, but Northeast Ohio began to lag in the late 9s while the US continued to climb. Both Northeast Ohio and the US were hit hard by the recession. Northeast Ohio manufacturing output is projected to reverse this trend by growing faster than the US over the next decade. The US is projected to grow 33% from to 22, Northeast Ohio is projected to grow 39%.
Sector Projection Growth: NEO vs US Textile Product Mills -16% 4% Development Activity Petroleum/Coal Product Bev and Tob Miscellaneous -19% 5% 1% 8% 1% 22% Sunfest Herbs to Move into Ontario Business Park Miami, Florida-based Sunfest Herbs has signed a letter of intent to be the first tenant in Ontario Business Park, the former General Motors plant in Ontario, Ohio. The company plans to employ up to 15 people in a variety of positions. Food Chemical Plastics/Rubber Product 15% 24% 45% 54% 67% 14% Stark State Awarded $3.26 Million for Oil and Gas Training Stark State College, located in North Canton, has been awarded $3.26 million in grants from the Department of Labor and The Timken Foundation to fund oil- and gas-related labs and equipment at the Energy Innovation Center. The grants will be used for education training systems for associate degree and certificate programs related to the growing oil and gas industry in Northeast Ohio. Key Sectors Projected to Grow More Quickly than the US, -2 Fueling the growth of projected manufacturing gross product in Northeast Ohio and helping it outpace the US are several key sectors primarily, plastics and rubber (14%), chemicals (67%) and food (24%). Further, textile product mills and petroleum/coal product manufacturing are projected to decline nationwide while continuing to grow in Northeast Ohio. Projected Largest NEO Sectors in 22 Computer/Electronic Product Petroleum/Coal Product Electrical Equipment & Appliance Transportation Equipment Food Primary Metal Plastics/Rubber Product Machinery Chemical Fabricated Metal -4% -2% % 2% 4% 6% 8% 1% 12% % CHANGE IN GROSS PRODUCT 21% 5% 57% 22% 24% 34% 14% 32% $- $1, $2, $3, $4, $5, $6, $7, $8, $9, $1, millions $ NEO 22 Many Key Sectors Anticipate Double-Digit Growth by 22 67% Projections indicate that all of the top ten sectors of Northeast Ohio manufacturing are expected to grow through 22. Three of the top four sectors plastics and rubber, chemicals and fabricated metal will grow faster than total manufacturing, becoming even more important to the Northeast Ohio economy. US 47% Penn National to Open in Austintown Township Penn National Gaming Inc. is expected to break ground on Hollywood Slots at Mahoning Valley Race Course this fall and open the gaming and racetrack facility in early 214. The $125 million, 15, square-foot Hollywood Slots project will create about 1, direct and indirect jobs, in addition to about 1, construction jobs. Power Plaza Signs Agreement with YSU Research Foundation In October, Power Plaza Co., Ltd., a Seoul, South Korea-based manufacturer of Electric Vehicle (EV) systems and power conversion products, signed a research memorandum of understanding (MoU) with the Youngstown State University (YSU) Research Foundation. This MoU will create a three-way research and development collaboration among Power Plaza, YSU and the University of Akron to advance commercialization of EV technologies. This collaboration also will create an investment bridge for Korean EV technology companies with the Youngstown- Warren area. Valerus-Brilex Partnership Supports Shale Business Valerus, a world leader in providing oil and gas handling and processing solutions, is partnering with Brilex Industries of Youngstown to manufacture oil and gas production equipment to build surface facilities for customers operating in the Marcellus and Utica shale plays. The partnership will create more than 3 local jobs in 213 as it increases manufacturing at a Brilex facility in Youngstown. Residential Projects Evolve in Downtown Cleveland With downtown Cleveland s apartments at a 95% occupancy rate, developers are racing to meet demand with a bevy of residential developments under construction and in the planning stages. Projects currently under way include: 318 units at The Langston near Cleveland State University 232 units in the former Embassy Suites on East 12th Street 12 units in the Hanna Building Annex in Playhouse Square 85 units at Rosetta Center near East 4th Street 36 units in the Chester Commons Building adjacent to Perk Plaza More units are in the works. For example, the 21-story office tower at 1717 East 9th Street recently received $5 million in tax credits for the conversion of the former headquarters of East Ohio Gas into 223 apartments; the second phase of the Flats East Bank project will bring another 175 newly built units to the market in 214; and renovations of both the Schofield Building and Truman Building could add 75 units along the Euclid Corridor.
Northeast Ohio Total employment (Not Seasonally Adjusted) 2.2 2.15 Total employment in millions 2.1 2.5 2. 1.95 1.9 1.85 EMPLOYMENT IN Q4 AT 2.4 MILLION Year-over-year employment remains flat, with total employment averaging 2.4 million workers. From Q3 to Q4 there was a season decline of about 2, jobs. Source: Ohio Labor Market Information (LMI) 1.8 Q1 Q2 Q3 Q4 Unemployment Rates Through December 13% 12% 11% 1% OHIO NEO UNEMPLOYMENT RATE ALMOST 1% LOWER THAN NATIONAL RATE 9% 8% 7% 6% NEO US With an unemployment rate of 6.6% in Q4, Northeast Ohio is similar to the state of Ohio (6.5%) and almost 1% lower than the US rate of 7.5%. Year-over-year, this represents a decline of 1% and.4% from Q3 to Q4. Source: Ohio Labor Market Information (LMI) 5% 4% NEO OHIO US Change in Employment by Sector = Average +1% Government -1% -2% -3% -4% SERVICES CONSTRUCTION MANUFACTURING EMPLOYMENT CONTINUES UPWARD TREND saw a 3.1% increase year-over-year with about 7, jobs gained. While services gained more than 13, jobs (1%) and construction remained steady, averaging 63, workers. Government employment decreased by 4%, averaging 218,2 workers. Source: Bureau of Labor Statistics (BLS) -5% Q1 7 Q2 7 Q3 7 Q4 7 Q1 8 Q2 8 Q3 8 Q4 8 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q1 7 Q2 7 Q3 7 Q4 7 Q1 8 Q2 8 Q3 8 Q4 8 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Services Construction Government
NEO 18 COunty REAL regional Gross Product (GRP) In Billions $21 NEO REAL GRP In Billions $2 $19 $18 $17 $16 $15 $14 4.% 3.4% 5.3% 1.9% 1.3% 1.4% (-2.4%) 2.7% 1.2 % 2.%.4% (-1.6 %) (-.1%) (-2.7%) 2.9% (-6.8%) 1.1 %.5% NEO GRP PROJECTED TO GROW Moody s Economy.com continuously updates projections for GRP. For the 18-counties of Cleveland Plus, the projection was adjusted to grow by approximately.5% in, with GRP at more than $186 billion. Since 1994, our economy has grown by more than $25 billion, or almost 16%. $13 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 Real GRP Average Annual Growth = 1% Office & Industrial vacancy Rates Through December 12% 11% 1% INDUSTRIAL AND OFFICE SPACE VACANCY REMAINS FLAT Vacancy Rate 9% 8% 7% The vacancy rate for industrial declined slightly in Q4, to 8.8%. This is the third consecutive quarter with sub 9% rate. Occupied square feet is at 521 million square feet for industrial space. Class A, B and C office space increased to 148 million square feet. The vacancy is at 11%, down slightly from Q3. Source: CoStar 6% Q4 7 Q1 8 Q2 8 Q3 8 Q4 8 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 OFFICE INDUSTRIAL Ohio Utica Well Activity non-cumulative 12 11 1 9 8 7 6 5 4 3 2 1 WELL ACTIVITY CONTINUES TO THRIVE In Ohio, 73 wells were permitted, 17 drilled and six producing in Q4. The breakdown for Northeast Ohio in Q4 with activity in Columbiana, Trumbull, Tuscarawas and Portage counties is 18 wells permitted and five drilled. Source: Ohio Department of Natural Resources Q4 Q1 Q2 Q3 Q4 Permitted Drilled Producing
Generous Support Provided by: Fund for our economic future Data SOurces Team Northeast Ohio uses a number of data sources for the Regional Economic Review. One of the primary sources is Moody s Economy.com (economy.com) data for Northeast Ohio. Moody s Economy.com county-level output, employment and payroll historical data are estimated from several publicly available sources and are summarized into the Team NEO regional footprint. It is important to understand data provided by Economy.com are estimates of economic activity. Team NEO also uses data from federal and state sources as part of the report. We rely heavily on data from the U.S. Bureau of Labor Statistics (bls.gov) and Ohio s Labor Market Information (lmi.state.oh.us) for information on wages, unemployment and both general and industry-specific employment. Industrial and office real estate data for this edition were derived from the CoStar Group. Due to market limits within the CoStar database, historic trend data for the Team NEO region are reflective of 14 of the 18 counties forming the regional footprint. These counties include: Ashtabula, Cuyahoga, Erie, Geauga, Huron, Lake, Lorain, Mahoning, Medina, Portage, Richland, Stark, Summit and Trumbull. Recession employment data for this edition reflect a 16-county footprint. Employment sector data reflect MSA data (Cleveland- Akron-Canton-Youngstown). ABout TEam NEO and The Cleveland Plus 18-County Region Team NEO advances Northeast Ohio s economy by marketing the region s many assets, attracting new businesses from around the world, building collaboration among the 18-county region s economic development organizations and linking the region to the state s JobsOhio program. Since, the organization has attracted 67 new company operations, more than 5,9 new jobs and $243 million in annual payroll to Northeast Ohio, leading to a total annual regional payroll benefit of more than $575 million. Check out clevelandplusmakesthings.com our new microsite Network Regional Partner 737 Bolivar Road, Suite 2, Cleveland, Ohio 44115 888.NEO.1411 www.clevelandplusbusiness.com