Heartland region poised for industrial resurgence as firms consider returning from abroad

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: Average global public debt likely reached 97.6% of GDP at the end of 2020.
• U.S.: U.S. economy is expected to reach pre-pandemic peak by mid-2021. President Biden will order a government-wide review of critical supply chains.
• Ohio: Governor DeWine and Lt. Governor Husted unveiled a plan more than $1B targeted to strengthen and grow Ohio communities and businesses.

Global Insights

Global COVID-19 cases are continuing their decline with 3.7M new global cases reported during the week ending January 31, a 13% decline compared with the prior week. The International Monetary Fund says global public debt for 2020 exceeded prior expectations as the pandemic pushed governments to provide extensive fiscal and financial support to keep economies afloat. Average global debt likely reached 97.6% of GDP towards the end of 2020, higher than IMF’s projection of an 84% average announced in October 2019.

Global fisheries and aquaculture have been hard hit by the COVID-19 pandemic and could face further disruption in 2021 as lockdowns affect supply and demand across the sector. American investors held $1.1T in equity issued by Chinese companies at the end of 2020 – or about five times more than the $211B captured by official U.S. data as of September 2020, according to Rhodium Group estimates.

U.S. Insights

The number of workers seeking unemployment benefits fell to 779,000 last week, a sign that layoffs have started to ease. Gross domestic product is expected to grow 3.7% in Q4 2021, compared with a year earlier, and to expand 2.4% in 2022. Growth is likely to average 2.6% a year through 2025, the CBO said. The January Manufacturing PMI registered 58.7%, down 1.8% points from the seasonally adjusted December reading of 60.5%. This figure indicates expansion in the overall economy for the eighth month in a row.

American Airlines warned that 13,000 employees could be laid off, many for the second time in six months, as it stated a summer travel rebound is not happening as expected. TSA released daily traveler screenings of fewer than 500,000 last week – the first time this has occurred since July 2020. Ford and Google are entering into a new strategic partnership as Ford CEO accelerates company restructuring and transition to EVs. Morgan Stanley argues that traditional internal combustion engines – the mainstay of automobiles for more than a century – are destined to become money-losers as early as 2030.

Foodservice sales have improved since the onset of the pandemic but may not return to pre-pandemic levels until the second half of 2022. One retail research and advisory group predicts as many as 10,000 stores could be closed in the U.S. this year, which would set a new record as it would be a 14% uptick from 2020. Bill and Melinda Gates have amassed the largest portfolio of private farmland in the U.S. including nearly 9,000 acres in Ohio.

President Biden is expected to order a government-wide review of critical supply chains, in an effort to reduce U.S. reliance on countries such as China for essential medical supplies and minerals. The administration also reached a $230M deal with Australian diagnostics company Ellume to produce at-home, over-the-counter COVID-19 tests. Heartland Forward published new research, “Reshoring America: Can the Heartland Lead the Way?,” which finds the U.S. poised for an industrial comeback led by the Heartland and fueled by reshoring, the return of manufacturing centers to the U.S. from abroad. The report was made possible, in part, by funding from JobsOhio who continues to promote open, secure supply chains.

Ohio Employment & Economic Insights

Governor DeWine and Lt. Governor Husted unveiled a plan more than $1B targeted to strengthen and grow Ohio communities and businesses. Ohio can expect to see more doses of the coronavirus vaccine that it is receiving from both Pfizer and Moderna in the coming weeks, Governor DeWine announced Thursday.

Amtrak proposed adding 5 new passenger rail routes connecting major Ohio cities with other out-of-state destinations. The plan involves both statutory changes and funding requests at the federal level. If approved the lines could begin transporting customers within 5 years. The Eastgate Regional Council of Governments has been awarded a $1.45M federal grant to install a broadband internet network in downtown Youngstown.

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.