As JobsOhio Turns 10, Economic Gains Show Benefit of Privatized Approach

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: Vaccines are working to curb COVID-19 infections, hospitalizations and deaths.
• U.S.: Bank of America increased its 2021 GDP growth estimate to 6.5% from 6.0%. President Biden ordered a review of supply chains for critical materials.
• Ohio: Major new corporate commitments from Rocket Mortgage, Macy’s, ATW, and Bitwise Industries.

Global Insights

The U.K.’s rapid vaccine rollout contributed to a substantial drop in infections, hospitalizations and deaths from COVID-19.  A surge in demand for exports pushed activity in Germany’s manufacturing sector to a 36-month high in February as lockdown measures to contain the virus pushed the services sector into a deeper contraction. German Chancellor Merkel stated new variants of COVID-19 risk a third wave of infections in Germany and the country must proceed with great care so that a new shutdown does not become necessary.  US Treasury Secretary Yellen took first steps to reverse previous opposition to more financial support for low-income countries through the IMF to help ease economic implications of the pandemic.

U.S. Insights

The COVID-19 death toll in the U.S. topped 500,000 Monday, a staggering number.  Johnson & Johnson’s single shot vaccine may be approved in the near-future and would be the third available in the U.S.  President Biden signed an executive order directing a review of supply chains for critical materials, from semiconductors to pharmaceuticals and rare-earth minerals, with the aim of spurring domestic production while strengthening ties with allies.  The FDIC named the agency’s first Chief Innovation Officer.

The economy grew at a 4.1% pace in the final three months of 2020, slightly faster than first estimated.  Bank of America increased its 2021 US GDP growth estimate to 6.5% from 6.0%.  New unemployment filings fell last week to their lowest levels in 12 weeks, a sign of a jobs market recovery with COVID-19 infections slowing.  Federal Chairman Powell told congress there was “hope for a return to normal conditions” this year but signaled that the central bank will be maintaining its heavy support of the economy.

The Conference Board Consumer Confidence Index improved again in February, after increasing in January. The Index now stands at 91.3, up from 88.9 in January.  After carrying out an orderly retreat from assembly lines as the pandemic arrived in the U.S., many manufacturers pulled out the playbook they followed in past recessions, cutting costs and preserving cash. That left them unprepared for the sharp rebound in consumer demand that began just weeks later and never let up.  Factory activity slowed in early February likely as a global semiconductor chip shortage hurt production at automobile plants, while prices of inputs and manufactured goods soared, which could heighten fears of strong inflation growth this year.  An aluminum can shortage continues to plague the food and beverage industry.

Home Prices rose 10.4% in the year that ended in December, up from a 9.5% annual rate the prior month.  December marked the highest annual rate of price growth since January 2014.  Texas residential power consumers paid $28B more for their power since 2004 than they would have paid at the rates charged to the customers of the state’s traditional utilities, according to WSJ’s analysis of data from the federal Energy Information Administration.  Coal shipments to foreign importers increased significantly in Q4 2020 despite total coal exports for the quarter falling 7.3% year-over-year.  Coal production steadily decreased with a 25% drop in total production by the top 25 Appalachian-based mines in FY2020.

Ohio Employment & Economic Insights

As JobsOhio turns 10, economic gains show benefit of privatized approach.  In Toledo, ProMedica announced that it is partnering with Bitwise Industries, a California-based tech apprenticeship engine, to launch an innovation center in Toledo. In central Ohio, the Columbus Regional Airport Authority plans to develop a new air cargo pharmaceutical handling facility at Rickenbacker Airport with assistance from a JobsOhio grant. The JobsOhio Inclusion Grant program assisted 28 companies in the Columbus Region since its inception in 2020, creating over 50 net new jobs, retaining more than 1,600 existing jobs and awarding nearly $900,000 in grants.

The Ohio Business Roundtable started Stop the Spread Coalition to give businesses in Ohio accurate information on how to advise its workforce about COVID-19 and vaccine safety.  The Ohio State University is conducting more COVID-19 tests per week than 10 states.  Nearly 1.6M people in Ohio have received at least one dose of the coronavirus vaccine, accounting for 13.7% of the population.  Governor DeWine and the Ohio Department of Natural Resources announced a new state park in Greene County.

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.