Positive Economic Momentum in Ohio Continues to Build

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: Foreign Direct Investment (FDI) surpassed pre-pandemic levels in 2021.
• U.S.: Existing home sales rose to the highest level since 2006.
• Ohio: Ohio’s unemployment rate was 4.5% in December; labor force participation rose to 61.5%.

Global Insights

Foreign Direct Investment (FDI) rebounded 77% in 2021 to a total of $1.65T, recovering from 2020 when FDI fell sharply ($929B) in response to disruptions caused by the pandemic. FDI flows now sit above their 2019 level ($1.5T).  The U.N.’s International Labor Organization forecasts it will take at least two years before global unemployment returns to pre-pandemic levels. The organization forecasts the number of global unemployed workers to fall to 207M in 2022 and to 203M in 2023.

China’s GDP grew 4% in Q4 to an annual rate of 8.1% in 2021. Investment in manufacturing grew by 13.5% in 2021.  Canada’s Consumer Price Index increased 4.8% on annual basis in December, the highest annual inflation reading since September 1991.  Consumer prices in the U.K. rose at a 5.4% annual rate in December, the largest annual increase since March 1992.  60.5% of the global population has received at least one dose of a COVID-19 vaccine.

U.S. Insights

Weekly jobless claims rose to 286,000 for the week ended January 15, up from a revised 231,000 during the prior week. Continuing claims rose to 1.635M from 1.551M during the prior week.  More than 75% of the U.S. population has received at least one dose of a COVID-19 vaccine, and over 63% is fully vaccinated.

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.8% in December to 120.8 (2016 = 100), following a 0.7% increase in November. The Federal Reserve launched a review of the potential benefits and risks of issuing a U.S. digital currency, as central banks around the world experiment with the potential new form of money to keep pace with private-sector payments innovations.

Homebuilder confidence declined for the first time in four months in January, with the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) falling to a reading of 83. Rising mortgage rates and increased material/construction costs continue to impact sentiment. U.S. housing starts increased 1.4% in December. Permits for new construction rose 9.1% to an annual rate of 1.873M. Existing home sales fell 4.6% in December from a month earlier. A total of 6.12M units were sold in 2021, the most since 2006 and up 8.5% from 2020.

Ohio Employment & Economic Insights

Intel will make an initial investment of more than $20B in the construction of two new leading-edge chip factories in Ohio; pledging an additional $100M toward partnerships with educational institutions to build a pipeline of talent and bolster research programs in the region. As the largest single private-sector investment in Ohio history, the initial phase of the project is expected to create 3,000 Intel jobs and 7,000 construction jobs over the course of the build, and to support tens of thousands of additional local long-term jobs across a broad ecosystem of suppliers and partners. Intel CEO Pat Gelsinger told TIME, “We helped to establish the Silicon Valley, now we’re going to do the Silicon Heartland.”

Ohio’s unemployment rate fell to 4.5% in December, down from 4.8% in November. Nonagricultural wage and salary employment increased by 8,800 over the month from a revised 5,396,600 in November to 5,405,400 in December 2021. The labor force participation rate rose to 61.5% in December, up from 61.3% in November 2021. Employment in goods-producing industries increased 5,000 over the month, and employment in the private service-providing sector increased 6,600.  Over 7.13M Ohioans have started the COVID-19 vaccination process.

The University of Cincinnati (#26), Ohio State University (#62), Toledo University (#76), and Sinclair Community College (#104) were all ranked among the top online degree programs in Newsweek’s America’s Best Online Learning Schools 2022. The Ohio STEM Learning Network (OSLN) will reach 51,000 Ohio students this year with awards to 151 Ohio classrooms, funded by Battelle. The grants will create sustainable STEM learning projects in public and private K-12 schools across 55 Ohio counties. The recently passed Infrastructure Investment and Jobs Act is set to fund millions of dollars in bridge projects throughout the state. The Ohio Department of Transportation received $96.7M in bridge formula funding and will receive a total of $483.3M in bridge formula funding over the next five years.

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.