PLUS REVIEW Q4 2012 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. Manufacturing 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 2010 and 2020, manufacturing Gross Regional Product (GRP) is projected to grow 39%, to a $43 billion sector of the economy. NETWORK REGIONAL PARTNER
Transcript
PluS review Q4 2012Quarterly 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.
Manufacturing 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 2010 and 2020, manufacturing Gross Regional Product (GRP) is projected to grow 39%, to a $43 billion sector of the economy.
networK reGional Partner
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.
ManufacturinG GroSS Product reverSeS trend, Projected to Grow faSter than the uS
From 1990 to 2010 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 ‘90s, but Northeast Ohio began to lag in the late ‘90s while the US continued to climb. Both Northeast Ohio and the US were hit hard by the 2007 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 2010 to 2020, Northeast Ohio is projected to grow 39%. Source: Economy.com
chanGe in ManufacturinG GroSS Product: neo vS uS, 1990-2010 0=GroSS Product in 1990
Projected chanGe in ManufacturinG GroSS Product neo vS uS, 2010-2020 0=GroSS Product in 2010
+60%
+80%
+100%
+40%
+20%
0
-20%
-40%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
neo uS neo uS
+30%
+40%
+50%
+20%
+10%
0
-10%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Key SectorS Projected to Grow More QuicKly than the uS, 2010-20
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 (104%), 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. Source: Economy.com
Many Key SectorS anticiPate double-diGit Growth by 2020
Projections indicate that all of the top ten sectors of Northeast Ohio manufacturing are expected to grow through 2020. 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. Source: Economy.com
Projected larGeSt neo ManufacturinG SectorS in 2020
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 150 people in a variety of positions.
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.
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 2014. The $125 million, 150,000 square-foot Hollywood Slots project will create about 1,000 direct and indirect jobs, in addition to about 1,000 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 30 local jobs in 2013 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
102 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 2014; and renovations of both the Schofield Building and Truman Building could add 75 units along the Euclid Corridor.
Year-over-year employment remains flat, with total employment averaging 2.04 million workers. From Q3 2012 to Q4 2012 there was a season decline of about 20,000 jobs. Source: Ohio Labor Market Information (LMI)
ManufacturinG eMPloyMent continueS uPward trend
Manufacturing saw a 3.1% increase year-over-year with about 7,000 jobs gained. While services gained more than 13,000 jobs (1%) and construction remained steady, averaging 63,000 workers. Government employment decreased by 4%, averaging 218,200 workers.Source: Bureau of Labor Statistics (BLS)
neo uneMPloyMent rate alMoSt 1% lower than national rate
With an unemployment rate of 6.6% in Q4 2012, 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 2012 to Q4 2012.Source: Ohio Labor Market Information (LMI)
northeaSt ohio total eMPloyMent (not SeaSonally adjuSted)
2.05
2.10
2.15
2.20
2.00
1.95
1.90
1.85
1.80
2007
Q1 Q2 Q3 Q4
2008
2009
2010
2011
2012
2007
2008
2009
2010
2011
2012
2007
2008
2009
2010
2011
2012
2007
2008
2009
2010
2011
2012
tota
l eM
Plo
yM
ent
in M
illi
on
S
uneMPloyMent rateS throuGh deceMber 2012
neo ohio uS
uS
ohio
neo
13%
12%
11%
10%
9%
8%
7%
6%
5%
4%
chanGe in eMPloyMent by Sector 0=2007 averaGe
conStruction
ServiceS
ManufacturinG
GovernMent
-50%
-40%
-30%
-20%
-10%
0
+10%
Q1
07
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
Q4
08
Q1
09
Q2
09
Q3
09
Q4
09
Q1
10
Q2
10
Q3
10
Q4
10
Q1
11
Q1
12
Q2
12
Q2
11
Q3
11
Q4
11
ManufacturinG ServiceS GovernMentconStruction
Q3
12
Q4
12
Q1
07
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
Q4
08
Q1
09
Q2
09
Q3
09
Q4
09
Q1
10
Q2
10
Q3
10
Q4
10
Q1
11
Q1
12
Q2
12
Q2
11
Q3
11
Q4
11
Q3
12
Q4
12
induStrial and office SPace vacancy reMainS flat
The vacancy rate for industrial declined slightly in Q4 2012, 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 2012. Source: CoStar
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 2012, with GRP at more than $186 billion. Since 1994, our economy has grown by more than $25 billion, or almost 16%. Source: Economy.com
well activity continueS to thrive
In Ohio, 73 wells were permitted, 17 drilled and six producing in Q4 2012. The breakdown for Northeast Ohio in Q4 2012 – with activity in Columbiana, Trumbull, Tuscarawas and Portage counties – is 18 wells permitted and five drilled. Source: Ohio Department of Natural Resources
neo 18 county real reGional GroSS Product (GrP) in billionS
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
201
2
neo
rea
l G
rP
in b
illi
on
S
averaGe annual Growth = 1%real GrP
$180
$190
$210
$170
$160
$150
$140
$130
1994
1995
1996
4.0%
3.4%
5.3%
2.7%1.3%
1.9%
1.4%1.2%
2.0%
(-0.1%)
2.9%1.1%
(-2.4%)
(-1.6%)
(-2.7%)
(-6.8%)
.4%
0.5%
$200
office & induStrial vacancy rateS throuGh deceMber 2012
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).
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 2007, the organization has attracted 67 new company operations, more than 5,900 new jobs and $243 million in annual payroll to Northeast Ohio, leading to a total annual regional payroll benefit of more than $575 million.
GenerouS SuPPort Provided by:
data SourceS
about teaM neo and the cleveland PluS 18-county reGion
