Ohio Breaks Record Early for Annual Business Creation

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: OECD projects global GDP growth at 5.6% in 2021.
• U.S.: Nonfarm payrolls rose by 210,000, and the U.S. unemployment rate dropped to 4.2%.
• Ohio: Ohio set a record for business filings in a year with more than five weeks left in 2021.

Global Insights

The omicron variant was detected in numerous countries, leading some nations to temporarily pause the easing of restrictions. Nearly 55% of the eligible global population has received at least one dose of a COVID-19 vaccine.

The Organization for Economic Cooperation and Development (OECD) projects global GDP growth at 5.6% in 2021. Consumer price inflation is projected to moderate to near 3.5% by the end of 2022, and ease to 3% in 2023.  The U.S., China, and other nations tapped into national strategic petroleum reserves in an attempt to bring down rising prices.  Eurozone consumer prices rose at a 4.9% annual rate in November, the fastest annual rise since records began in 1997.  China’s factory activity fell into contraction in November, with Manufacturing PMI falling to 49.9.

U.S. Insights

Nonfarm payrolls rose by 210,000 in November, and the unemployment rate dropped to 4.2%. The labor force participation rate rose to 61.8%.  Weekly jobless claims rose to 222,000 for the week ended November 27. Claims dropped to a revised 194,000 during the prior week, below pre-pandemic levels and the lowest level of initial claims since 1969. Continuing claims fell to 1.96M, coming in below 2M for the first time since March 2020.

U.S. GDP for Q3 was revised upward to 2.1% from preliminary estimates of 2%.  Durable goods orders fell 0.5% in October, and core capital goods orders increased 0.6%.  Household spending rose 1.3% during the month, with personal incomes increasing 0.5%.  New home sales edged up 0.4% in October, and pending home sales jumped 7.5% following an unexpected decline in September. Construction spending rose 0.2% in October after declining 0.1% in September. U.S. inflation expected to be above Fed’s target through 2023 according to a recent NABE survey.

U.S. consumer confidence fell to a nine-month low in November, with the Conference Board Consumer Confidence Index dropping to 109.5, down from 111.6 in October.  ISM Manufacturing PMI rose to 61.1 in November, indicating expansion in the overall economy for the 18th month in a row. ISM Services PMI registered an all-time high of 69.1 in November.  Nearly 71% of the U.S. population has received at least one dose of a COVID-19 vaccine, and nearly 60% is fully vaccinated.

Ohio Employment & Economic Insights

Ohio broke the record for new business filings in a year, with more than five weeks left in 2021. As of November 21st, 181,586 new businesses have been created in the state in 2021, breaking the previous record of 171,073 new businesses set throughout all of 2020.

Cincinnati ranked #8, Columbus ranked #14 and Cleveland ranked #35 for the “ease of doing business” for small and mid-sized businesses in the U.S., according to Arizona State’s Annual Doing Business North America rankings.  Five Ohio companies were ranked among the top in the U.S. in Deloitte’s “North America Technology Fast 500” – an annual ranking of the fastest-growing companies in the technology, media, telecommunications, life sciences, fintech, and energy tech sectors.

Ohio scored among the top states for income tax reductions from 2013-2020 according to a recent study. The report highlights $4.4B in reductions to personal income tax enacted from 2013-2020, and notes that there was not a year from 2011-2020 in which lawmakers enacted a net increase in personal income tax revenue.

The Downtown Dayton Partnership (DDP) reported $140M in projects have been completed in downtown Dayton in 2021, already surpassing 2020 when $94M in projects were completed.  Eight projects across the Dayton region were awarded nearly $5.2M in grant funding from JobsOhio during the month of October to create over 400 new jobs and result in more than $300M in investment.

Ohio lawmakers voted to create a 10-member commission to help drive electric vehicle production in the state; also voted to enact a five-year sales tax break for the production of engines, batteries, brakes, and other components made strictly for electric vehicles.  54 Ohio school districts will receive awards through the Innovative Workforce Incentive Program. The grants, totaling $13.5M, will help districts establish new programs for students to earn credentials in priority industry sectors.

Over 6.8M Ohioans have started the COVID-19 vaccination process, marking approximately 62% of the population currently eligible. Ohioans filed 7,519 initial traditional unemployment claims for the week ended November 27. Continued traditional unemployment claims fell to 32,134, down sharply from the previous week and the lowest number of continued claims filed since recording began in 1986.

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.