Clermont County Attracts New $550M Manufacturing Plant
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.
Published: Fri Oct 30 2020
- 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%.
Positive Company-Specific News
- Nestlé Purina PetCare announced a $550M investment to build a new factory in Williamsburg Township in Clermont County.
- Ashley Furniture, the largest manufacturer of furniture in the world, to build facility in Etna investing $70M, creating 300 jobs.
- Clarus R+D, a cloud-based software company will expand its workforce in Columbus by 25.
- Mucci Farms announces major expansions in Kingsville, Ontario and Huron, Ohio totaling 206-acres over the next two years.
- Polytech America to invest $15M in Canton, create 30 jobs.
- AddUp will establish its North American HQ in Blue Ash.
- Sherwin-Williams posted Q3 financial successes with a 5.2% increase in net sales with residential products seeing higher sales.
- Kroger Health will be launching rapid COVID-19 antibody testing across its pharmacies in the U.S. The tests will cost $25 and results will be available within 15 minutes.
- First Solar, saw net sales for Q3 at $928M, an increase of $285M from the prior quarter, primarily due to international project sales, and an increase in volume of modules sold to third parties.
- B&G Foods will acquire the Crisco oils and shortening business from The J.M. Smucker, valued at $550M.
- AEP’s Energy Partners subsidiary signed a long-term power purchase agreement with Atlanta Farms Solar Project, currently being developed by Savion, a renewable energy developer, for the project's planned 200 MW output in Pickaway County.
- Root Insurance's IPO was priced above its target range and sold 2M more shares than projected, solidifying its rank as the biggest initial public offering in Ohio history.
- M/I Homes posted near across-the-board financial records as revenue, pre-tax income, and homes delivered all increased at record rates for the Columbus-based home builder.
- Medpace posted a 6.5% revenue increase for Q3 comparable to the prior year period. Net income nearly doubled to $41.5M from $24M the previous year.
- Stirling Ultracold is engaging with pharmaceutical companies developing the COVID-19 vaccine trials with an idea to create a fleet of ULT freezers capable of storing their approved vaccines.
Negative Company-Specific News
- Cleveland Indians announced layoffs after a shortened season led to MLB financial losses.
- Alliance Data posted revenues of $1.1B, down 27% from the prior year. Despite the drop the company managed to decrease operating expenses 33% and announced the purchase of digital payment company Bread for $450M.
- Diebold Nixdorf’s Q3 earnings reported a net loss of $101.4M for the quarter. The company posted revenue of $995M during the period and revised down its full-year projections.
- The Timken Company posted third quarter sales of $89M, down 2.1% from the same period a year ago but up 11.3% from the previous quarter. Significant growth in renewable energy and favorable acquisitions partially offset losses.
- Welltower posted revenue and an overall net income loss for Q3 as the impacts of COVID-19 continue to weigh on their financials.