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.
- Global: VC investment in Europe had the strongest quarterly showings on record for Q3 2020.
- U.S.: GDP grew 33.1% in Q3 2020, jobless claims are down, and private output is up.
- Ohio: Governor DeWine proposed a third dividend of $5B for Ohio employers by the BWC.
France and Germany will again enter lockdown this week as another wave of COVID-19 infections threaten to overwhelm the countries before winter. Global stock markets went into a dive in response to the nationwide restrictions. In France people will be required to stay home except for essential goods, medical attention, or exercise while Germany will be shutting bars, restaurants and theaters until November 30. The European Central Bank signaled to provide more stimulus before the end of the year.
Pitchbook released their latest edition of the European Venture Report showing venture capital deal making has not slowed in Europe due to COVID-19. Overall, €10.6B of deals occurred during Q3 2020 marking one of the strongest quarterly showings on record and setting a pace for 2020 to exceed the 2019 venture capital figure for the region. Pharma and biotechnology posted particularly large showings as attention has been thrust on COVID-19 and a potential vaccine.
U.S. GDP grew 7.4% in Q3 – a quarterly gain that equals an annualized pace of 33.1%, while economists projected a more moderate pace of growth in Q4 at an annual rate of 3% to 6%. Initial weekly jobless claims fell to 751,000 for the week ending October 24, down 40,000 from the previous week. IHS Markit’s U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, rose to a 20-month high at 55.5 in October. The Conference Board Consumer Confidence Index declined slightly to 100.9 in October, after increasing sharply in September. The Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – decreased from 102.9 in September to 98.4 this month.
Combined state budget shortfall could reach 13% over two years as U.S. states are facing their biggest cash crisis since the Great Depression. Stock markets fell sharply throughout the week amid concerns over the latest increase in COVID-19 cases and its potential impact on the global economy. The Dow fell over 900 points, or 3.4%, Wednesday while the S&P 500 slid 3.5% and the Nasdaq fell 3.7%. Tuesday marked the third consecutive day the U.S. set a record high of average daily COVID-19 cases. Chicago officials issued a “business curfew”, requiring non-essential businesses to close at 10 p.m. and restaurants will no longer provide indoor dining. According to Upwork’s report, 14M to 23M Americans are planning to relocate to a new U.S. city due in part to the growing acceptance of remote work.
U.S. airlines continue to be disproportionately impacted by COVID-19 with domestic air travel down 61% from the prior year and international air travel down 77%, according to data from Airlines for America. TSA checkpoint traveler throughput is running 62% below year-ago levels. Boeing, which has been in belt-tightening mode throughout 2020, plans to eliminate about 7,000 more jobs through the end of 2021. It also reported a third-quarter loss of $449M, compared with profits of $1.2B in the year-ago period. Airbus expects traffic to return to pre-crisis levels between 2023 and 2025. Southwest Airlines reported its largest-ever quarterly loss of $1.2B. This comes just a few months after major airlines announced nearly 50,000 layoffs as federal aid expired. Exxon Mobil will slash its global workforce by 15% over the next two years.
Governor DeWine proposed a third dividend for Ohio employers by the Bureau of Workers’ Compensation. If approved by BWC’s Board of Directors on November 2, it would mark the agency’s third dividend of more than $1B this year, bringing the total to nearly $8B this year. Low-income families, small businesses, bars, restaurants, hospitals, colleges, nonprofits and arts groups negative impacted will be getting $429.5M in federal relief. The Ohio Education Association said the state’s school districts could face budget shortfalls for the 2022 and 2023 budget years of between 20% and 25%.
Wright-Patterson, NASIC help lead nation’s defense in air and space. University of Cincinnati unveiled a partnership with Microsoft to grow Cincinnati’s tech talent. Ohio startup – AIMM reached the final development stage in their project to create self-disinfecting N95 masks for front-liners.
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