Ohio New Business Filings Continue to Grow

This report is a summary of third-party economic research and perspectives to foster communication with business and economic development stakeholders during the COVID-19 crisis.

Key Economic Insights

• Global: The IMF expects the world economy to grow 6% this year.
• U.S.: U.S. brought back 916,000 jobs in March as ISM manufacturing PMI jumped to 64.7, the highest level since December 1983. Rising inflation expectations helped ignite a first-quarter selloff in Treasuries that pushed yields to pre-pandemic highs.
• Ohio: Building upon a record 2020, in which 171,073 new businesses were created in Ohio, 16,025 new businesses were created in Ohio in February 2021.  Cleveland actively preparing for NFL draft.

Global Insights

The IMF expects the world economy to grow 6% this year, the most since 1980, when it started tracking data on a comparable set of countries.  That is an upgrade from a projection for 5.5% growth.  The CNBC Global CFO Council survey for Q1 2021 shows economic confidence from chief financial officers across the globe that hasn’t been this high since 2018, and fears of the risk from COVID-19 to their business outlook cut in half from just a quarter ago.  U.S. Treasury Secretary Yellen argued for a global minimum corporate tax rate, seeking international cooperation that is crucial to funding the administration’s $2.3T infrastructure proposal.

Ships were starting to move in the Suez Canal after the dislodging of the Ever Given container ship cleared the key trade route for traffic.  Taiwan is facing its worst drought in 56 years.  While the dry spell has not yet impacted TSMC or other companies, a typical semiconductor manufacturing facility uses two to four million gallons of ultra-pure water per day, creating a precarious situation.  India is offering more than $1B in cash to each semiconductor company that sets up manufacturing units in the country.

U.S. Insights

President Biden unveiled a $2.3T infrastructure plan centered on fixing roads and bridges, expanding broadband internet access and boosting funding for research and development, plus higher corporate taxes to pay for the package.  The plan also includes provisions to stop large companies that are profitable from paying no federal income taxes due to reduced liabilities.  The U.S. brought back 916,000 jobs in March, bringing the unemployment rate to 6.0%.  Women’s employment losses as a percent of employment finally neared the same point as men’s employment losses.  U.S. employers added 50,000 new enterprise-technology workers in March, marking the fourth month of consecutive gains in the field, according to analysis by CompTIA.

The Institute for Supply Management index of national factory activity jumped to 64.7 last month from 60.8 in February, the highest level since December 1983.  ISM economic activity in the services sector grew in March for the 10th month in a row.  Consumer confidence rose to its highest level since the pandemic started to 109.7 in March from 90.4 in February.

AlixPartners estimates $50B will be needed to build out a U.S. charging network to accommodate the expected growth of EVs by 2030.  Six major utilities announced a plan to ensure that electric vehicle drivers have access to a seamless network of charging stations connecting major highway systems from the Atlantic Coast, through the Midwest and South, and into the Gulf and Central Plains regions. The two South Korean rivals, SK Innovation and LG Energy Solution, are fighting over a factory that SK has been building in Georgia to serve VW and Ford.

The U.S. National Intelligence Council lists disease, the wealth gap, climate change, and conflicts within and among other nations as having greater influence in the coming decades.  A single dose of Pfizer’s or Moderna’s Covid-19 vaccine was 80% effective in preventing infections, according to a new CDC study.  Zillow found more than 11% of Americans say they have already moved in the past year, contributing to the Great Reshuffling, and millions of additional households could enter the real estate market.  Nationwide, 31.2% of Redfin.com users looked to move to a different metro in January and February, up from 26.1% during the same time period last year and the highest share since Redfin started tracking migration in 2017.

Ohio Employment & Economic Insights

A record 171,073 new businesses were created in Ohio in 2020 and another 16,025 new businesses were created in February, a 41% jump from January 2020.  New and ongoing unemployment claims filed in Ohio hit a two-month low last week with 44,985 first-time claims.  That figure is down from roughly 147,000 initial claims the first full week of February.  A new health order, consolidating many into one focuses on four priorities: wearing masks, maintaining distance, washing hands and spending more time outside rather than inside.

The office vacancy rate in Columbus rose to 11.8% in the first quarter, according to Colliers.  The City of Akron says its Great Streets Akron initiative to target investments provided critical groundwork for neighborhood small business survival and greater community trust during the COVID-19 pandemic.  A new program will bring affordable high-speed internet service to residents in a digitally redlined part of Northeast Ohio.  Destination Cleveland plans to promote the NFL Draft (and the city) through a campaign that includes a pitch to potential future residents, dubbed “Cleveland Wants to Draft You.”

Resources

• Ohio Department of Health’s COVID-19 Website: www.coronavirus.ohio.gov
• JobsOhio’s resource portal and information about Open, Secure Supply Chains in Ohio.