Why Companies Are building Second HQs in Ohio

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: Global GDP growth is projected to be 5.5% in 2021. ECB signals faster money-printing to keep lid on yields.
• U.S.: $1.9T American Rescue Plan signed into law. The Conference Board forecasts U.S. real GDP growth of 5.5% in 2021 while Goldman Sachs predicts the U.S. economy will grow 8% this year.
• Ohio: Why companies are building second HQs in Ohio: A diverse economy, low cost of living, and corporate-friendly tax structure is luring business to the Buckeye State

Global Insights

Global GDP growth is projected to be 5.5% in 2021, with global output rising above the pre-pandemic level by mid-2021, according to OECD Economic Outlook report.  The European Central Bank said it would accelerate money-printing to keep a lid on euro zone borrowing costs, signaling that it is determined to lay the foundation for a solid economic recovery.  U.S. agricultural exports to China in 2020 rose to 55.5M tons and comprised one-quarter of all farm shipments.  Taiwan offered reassurances it has sufficient water reserves to keep chip makers humming amid the largest drought in 56 years.  TSMC sees no impact on production so far and has a contingency plan.  UN Member States agreed a new statistical framework that takes into account the contributions of nature, when measuring economic prosperity and human well-being.

EU regulators approved Johnson & Johnson’s one-shot vaccine as the bloc seeks to speed up its inoculation rate as it continues to fight with a more contagious variant of the virus.  J&J will deliver at least 200M doses to the EU this year.  Norway, Denmark and Iceland suspended use of the AstraZeneca vaccine.  Brazil has the second highest COVID death toll in the world, exceeding 2,000 deaths in a single day for the first time. The surge is highly attributed to a new variant that could be up to twice as contagious as the original version.

U.S. Insights

President Biden signed the $1.9T American Rescue Plan into law, which includes up to $1,400 payouts to many Americans.  The package contains tens of billions of dollars to facilitate the vaccine rollout and $130B for schools to help safely reopen through improving ventilation, hiring more janitors and providing more PPE.  New filings for unemployment benefits dropped to 712,000 last week, nearing their lowest level since the pandemic fueled a surge in layoffs last March.

The Conference Board Measure of CEO Confidence rose to a 17-year high in the first quarter of 2021, following a sharp increase in the September 2020 survey.  The measure now stands at 73, up from 64.  The Conference Board also forecasts that US Real GDP growth will rise to 3.0% (annualized rate) in Q1, and 5.5% (year-over-year) in 2021.  Despite the pandemic, combined state tax revenues in 2020 nearly matched revenues from 2019, declining just 0.4%.  Ohio’s cumulative tax revenue in 2020 was 0.3% higher than 2019.  The S&P and Dow Jones indexes hit all-time highs on positive jobless claims and economic data.

The surge in U.S. inbound shipping continued in February, with total seaborne imports up by 29.3% year over year while containerized freight improved by 20%. Shipments of consumer electronics rose by 28.5% while home furnishings increased by 41.8%.  Healthcare and consumer staples continued to be driven by the pandemic while the industrial sector also remained robust with growth of 19.2%.  People who have been fully vaccinated against COVID-19 can take fewer precautions in certain situations, including socializing indoors without masks when in the company of low-risk or other vaccinated individuals, according to guidance from the CDC.

Ohio Employment & Economic Insights

Tata Consultancy Services (TCS), a leading global IT services, consulting and business solutions organization, announced plans to expand its operations in Ohio by hiring more than 800 local employees to meet the evolving needs of its customers.  JobsOhio assisted three Dayton-area small businesses with inclusion grants totaling $100,000.  The University of Cincinnati Office of Research has launched the interdisciplinary Space Research Institute for Discovery and Exploration as part of Research2030, UC’s 10-year strategic plan for research.  Reshoring is becoming an increasingly persistent topic in executive boardrooms.  Proximity to suppliers as well as customers is just one of the benefits of reshoring and Ohio is ideal for reaching both.

There is a total of $11.2B for Ohio governments in the American Rescue Plan – half of it going to the state, and $2.2B each to cities and counties.  The Ohio EPA awarded $3.25M in grants to support the installation of more than 500 publicly-accessible electric vehicle charging ports at more than 170 locations in 22 counties.  The City of Oxford and Miami University have jointly committed $350,000 towards bringing an Amtrak stop to the city.

State officials have just unveiled a fully redesigned, more accessible OhioMeansJobs website for Ohio’s jobseekers and employers.  The Ohio Department of Agriculture is now accepting applications for the 2021 Specialty Crop Block Grant Program.  To qualify, the grants must be used to support projects that raise awareness about and increase demand for specialty crops grown in Ohio.

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.