Ohio Manufacturing GDP Reaches New All-Time High

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

Key Economic Insights

• Global: Italy hosted the G20 Summit and the United Kingdom is hosting world leaders from over 100 countries as part of the UN Climate Change Conference COP26 in Glasgow.
• U.S.: U.S. GDP rose at a 2.0% annualized rate in Q3 as spending and business investment growth sagged.
• Ohio: Ohio’s manufacturing GDP was nearly $117B in Q2 of 2021, up from $112.4B in Q4 2019.

Global Insights

Economists see central banks reducing emergency stimulus too quickly and further supply chain disruptions among the top risks to the world economy next year.  The European Central Bank kept its monetary policy unchanged, with interest rates remaining in negative territory. The region’s economic output is expected to return to its pre-pandemic level in early 2022, up to a year later than the larger U.S. economy.

The Bank of Japan kept monetary policy unchanged, and the central bank cut its real GDP growth outlook and consumer inflation forecasts for fiscal 2021. Oil prices retreated from seven-year highs this week after the U.S. showed a rise in domestic crude inventories and amid reports that Iran may soon revive talks on a nuclear deal.  World leaders from more than 100 countries are convening in Glasgow for the U.N.’s 26th COP summit. 49.5% of the world population has received at least one dose of a COVID-19 vaccine.

U.S. Insights

Weekly jobless claims fell to a new pandemic-era low for the week ended October 23. Initial claims fell to 281,000, down from 291,000 the prior week. Continuing claims dropped to 2.243M, down from 2.48M the prior week.  U.S. economic growth decelerated in Q3 as GDP rose at a 2.0% annualized rate according to the first estimate released by the BEA. Consumption slowed to 1.6% in Q3, the weakest pace since Q2 of 2020.  U.S. consumer spending increased in September, rising 0.6% following a 1.0% gain in August. U.S. personal income fell 1.0% in September after rising 0.2% in August.

New home sales rose 14% in September after falling 1.4% in August. Pending home sales fell 2.3% in September from August, likely due to higher mortgage rates. U.S. durable goods orders decreased 0.4% to a seasonally adjusted $261.3B in September after rising 1.3% in August.  The U.S trade deficit in goods increased 9.2% to $96.3B in September.  The University of Michigan’s Consumer Sentiment index remained virtually unchanged from its mid-month reading, rising to 71.7 in October. Nearly 66% of the U.S. population has received at least one dose of a COVID-19 vaccine, and over 57% is fully vaccinated.

Ohio Employment & Economic Insights

The Ohio Tax Credit Authority approved assistance for five economic development projects across the state. The projects are set to create 679 new jobs and retain 549 jobs statewide, resulting in more than $42M in new payroll and more than $12M in investment. Ohio’s record year of new business filings continues, as the state reported 14,543 new business formations for the month of September. Through the first nine months of 2021, 156,600 new businesses have formed in Ohio, a 21% increase over the first nine months of 2020 (129,697), which was a record year for the state.  Ohio manufacturing economic output surpassed the sector’s previous highwater mark set in late 2019. Ohio’s manufacturing GDP was nearly $117B in Q2 of this year, up from $94.7B in Q2 2020 and from $112.4B in Q4 2019.  Ohio reached two records in job postings – the most total jobs available and positions with salaries over $50,000. There are 269,287 total jobs available and 150,284 paying more than $50,000 a year, according to Ohio Means Jobs website.

Alaska Airlines is adding a new nonstop flight between Seattle and Cleveland and also adding a second nonstop flight connecting to Columbus and Cincinnati. The routes will better connect Ohio’s financial services sector, healthcare systems and tech industries to markets on the West Coast and Asia, while also giving the West Coast easier opportunities to do business in Ohio.  Ohio leaders met with members of FIFA and the U.S. Soccer Delegation in Cincinnati as the city bids to host the FIFA World Cup games in 2026.  Ohio State University was ranked the #52 best global university out of more than 1,700 universities in the 2022 U.S. News Best Global Universities. Case Western Reserve University is #42 among all national universities. Ohio’s research universities ranked in the top 20 in space science.

A total of $250M in grant funding will be invested in water infrastructure projects across the state as part of the new Ohio BUILDS initiative. The first round of water infrastructure grants will award $93M to 54 projects that impact communities in 60 Ohio counties.  Ohio’s H2Ohio initiative continues its growth in participation as 800 producers in the 10-county H2Ohio expansion area of the Western Lake Erie Basin have enrolled 600,000 additional acres in the program.  The second phase of construction on new electric transmission infrastructure in Trumbull County is underway by FirstEnergy Corp. The $12M project will help support the energy demands of the area’s rapidly expanding electric vehicle industry by building a new, high-voltage power line in Lordstown.  Nearly 6.5M Ohioans have started the COVID-19 vaccination process, marking 64.8% of the population currently eligible.

Resources

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