Ohio Among Top States in EV Batteries, Transport Automation, and Aerospace

Key Economic Insights

• U.S.: Real GDP advanced 2.9% in Q4 2022. Core PCE advanced 4.4% YoY in December, the lowest annual increase since December 2021. PPI recorded the largest monthly decline since April 2020.
• Ohio: The Ohio Budget Stabilization Fund now stands at nearly $3.5B, the largest balance in the state’s history. Ohio saw its second-best year on record for new business creation in 2022.

U.S. Insights

Real GDP increased at an annual rate of 2.9% in Q4 2022, according to advance estimates released by the Bureau of Economic Analysis. U.S. industrial production fell 0.7% in December, the largest monthly decline since September 2021. Manufacturing output fell 1.3% during the month, and capacity utilization fell to 78.8% in December, down from a revised 79.4% in November. Durable goods orders increased 5.6% in December following a 1.7% decline in November. Excluding transportation, new orders decreased 0.1% month over month. U.S retail sales fell 1.1% in December, the second consecutive month of decline. November data was revised to show sales dropping 1.0%, lower than the 0.6% figure previously reported.

The Producer Price Index (PPI) declined 0.5% in December, the largest monthly decline since April 2020. PPI rose 6.2% over the 12-months ended in December 2022, the lowest annual increase since March 2021. Excluding food and energy, Core PPI rose 0.1% during the month to a 5.5% annual rate, down significantly from a peak of 9.6% in April 2022. The PCE Price Index rose at a 5.0% annual rate in December 2022. Core PCE, the Federal Reserve’s preferred gauge of inflation, rose at a 4.4% annual rate in December 2022, the lowest level since December 2021.

The NFIB Small Business Optimism Index declined to 89.8 in December, the 12th consecutive month below the 49-year average of 98. 32% of owners reported inflation as their top problem in operating their business. The Conference Board Leading Economic Index (LEI) for the U.S. decreased 1.0% in December 2022 and is now down 4.2% over the six-month period between June and December 2022, an acceleration from the 1.9% contraction over the previous six-month period (December 2021–June 2022). The University of Michigan’s Consumer Sentiment Index rose 8.7% to 64.9 in January. Initial jobless claims declined by 6,000 to a seasonally adjusted 186,000 for the week ended Jan. 21. Continuing claims increased 20,000 to 1.675M for the week ended Jan. 14.

Ohio Employment & Economic Insights

Ohio’s unemployment rate was 4.2% in December 2022, unchanged from November. Nonagricultural wage and salary employment increased 1,900 over the month. The labor force participation rate was 61.2% in December, down from 61.3% in November 2022 and down from 61.5% in December 2021. Ohio recorded 179,636 new business filings in 2022, the second highest year on record following 2021’s record setting year of 197,010, with 13,012 filings in December. Ohio saw approximately $2.127B in Venture Capital (VC) deal activity across 195 deals in 2022, according to preliminary data from Pitchbook, ranking #16 in the U.S. and #3 in the Midwest (behind Illinois and Pennsylvania) for total VC deal value.

The Ohio Office of Budget and Management transferred $727M into the Ohio Budget Stabilization Fund, bringing the cash balance to nearly $3.5B, the largest balance in the state’s ‘rainy day fund’ history. The Ohio Department of Jobs and Family Services will receive $48M in federal grant dollars over the next three years to support access to quality early child care and education. The Office of Workforce Transformation has allocated $12M in grants to support Ohio’s Broadband & 5G Sector Partnership via federal funds.

A report from the Argonne National Laboratory finds that Ohio is poised to be a leader in EV battery manufacturing in the U.S. by 2030, along with Georgia, Kentucky, Michigan, Kansas, North Carolina, and Tennessee. DriveOhio will begin testing automated semi-truck platoons along Rt. 33 and passenger vehicles on two-lane roads in Athens and Vinton counties, supported in part by a $7.5M grant from the U.S. DOT to show how connected and automated vehicles can improve safety in rural settings. Ohio ranked as the #4 state in PWC’s 2022 Aerospace Manufacturing Attractiveness Rankings report.

The seasonally adjusted economic output of Ohio manufacturers surpassed $130B annually during Q3 2022, according to data from the U.S. BEA, up from $118.3B a year earlier. The Ohio Manufacturers’ Association recently released the 2023 Ohio Manufacturing Counts Report, highlighting the economic impact of Ohio manufacturing which contributes to 16% of the state’s total output and nearly 692,000 jobs earning $44B in annual payroll.

Forbes has named 10 Ohio corporations in its 2023 list of America's Best Small Companies (market value between $300M and $2B); Ohio-based companies include Arhaus (#6); Nacco Industries (#13); Rex American Resources (#26); Andersons (#29); TimkenSteel (#31); Myers Industries (#33); Olympic Steel (#63); Preformed Line Products (#68); Franchise Group (#79); and TravelCenters of America (#86).

Ohio Company News

• International Food Solutions won a $9.6M grant from the USDA to help redevelop and expand a vacant building in Cleveland into a poultry processing plant, creating a planned 227 jobs.
• Spectrum expects to add 200 jobs at their new Columbus call center by end of 2023.
• Western Alliance Bank plans to expand into Westerville, creating 150 jobs for a new technology hub.
• GM plans to invest $55M at its Defiance facility to build castings for V8 engines and EV strategies.
• Bullen Ultrasonics plans to invest more than $14M to expand its Technology Development Center (TDC) in Eaton and in new technologies advancing R&D efforts.
• NEO Battery Materials intends to establish a new subsidiary, NBM America, in Ohio focused on developing its silicon anode business for the EV battery market in the U.S.
• Honda announced plans to create an Electrification Business Development Operations division to speed up EV development.
• Foxconn intends to build a Mobility in Harmony Consortium Innovation Hub in Lordstown.
• Battelle will partner with Viking Global Investors to found a new company, Revive Environmental, focused on using new Battelle technology to clean up PFAS contamination sites.
• ECHO Health in Westlake has acquired Massachusetts-based Prelude Software, provider of PayPilot.
• JTM Foods in Harrison has acquired Texas-based dessert maker Cookies-n-Milk.
• American Airlines will add a direct flight from Cincinnati/Northern Kentucky International Airport to Raleigh-Durham, its 12th market from CVG.
• Digital Access Ohio has launched a new wireless broadband tower in Tuscarawas County, facilitating access for as many as 2,400 households and 125 businesses in the rural area.
• Battelle, AmplifyBio, and Andelyn Biosciences have won a National Institutes of Health contract to be one of three teams allowed to bid on individual jobs over an eight-year period in a $149M program.
• BIOHM announced it raised a $7.5M equity financing for accelerating microbiome research.
• Ohio State University has won a $3.9M grant from the U.S. DOE’s Electric Vehicles for American Low-Carbon Living (EVs4ALL) program to test fast-charging, extended life EV batteries.
• Ohio University has received a $50,000 grant from the Appalachian Regional Commission to explore Advanced Air Mobility (AAM) for business, transportation, medical, and logistical needs.
• Intel has a name for its central Ohio semiconductor campus being built in New Albany: Ohio One.
• Folio Photonics has won a Business Intelligence Group’s 2023 BIG Innovation Award.