Ohio Ranked Third in Site Selection’s 2020 Top State Business Climate Rankings
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: International FDI fell by 49%; outlook remains negative.
- U.S.: U.S. unemployment rate falls to 6.9%, Federal Reserve holds rates at zero amid considerable risks as economy continued to recover.
- Ohio: Ohio ranked third in Site Selection’s 2020 Top State Business Climate Rankings.
Foreign direct investment (FDI) fell by 49% to $399B in the first half of 2020 according to UNCTAD. The European Union’s executive commission lowered its economic forecast for next year and doesn’t expect to reach pre-virus levels until 2023. The new forecast foresees economic growth of 4.2% in 2021 for the EU, revised down from the previous 6.1% projection. This comes after the third-quarter GDP increased by 12.7% from the previous quarter – the largest since statistics started being kept in 1995. The Bank of England announced a further £150B of support as policymakers kept interest rates at a record low of 0.1%. Tighter lockdown rules, including new restrictions in England, are expected to lead to a slower, bumpier recovery.
China announced rules barring non-Chinese travelers from Britain, France, Belgium, Philippines, and India. Passengers from the U.S., France, Germany, and Thailand must take a nucleic acid test and a blood test for COVID-19. China plans to import more than $22T worth of goods over the next decade. Indonesia has fallen into its first recession in 22 years as the pandemic continues to take its toll.
Total nonfarm payroll employment rose by 638,000 in October, and the unemployment rate declined to 6.9%, the U.S. Bureau of Labor Statistics reported today.These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the COVID-19 pandemic and efforts to contain it. New applications for unemployment benefits held nearly steady last week, an indication that layoffs stabilized at an elevated level as virus cases surged in several states. Federal Reserve leaves interest rate unchanged as the economy continues to face considerable risks ahead.
The Institute for Supply Management (ISM) index of national factory activity increased to a reading of 59.3% for the month of October, up 3.9% from September, its highest level in 2 years, amid a shift in spending toward goods like motor vehicles. The big 3 automakers earned billions in profits – just a quarter after posting losses. GM pulled in $4B in profit for the quarter, while Ford recorded $2.4B, and Fiat Chrysler recorded $1.4B. Still, for GM, sales were down 9.9% from a year ago.
The nation has exceeded 100,000 new daily coronavirus cases for the first time. The Federal Communications Commission announced its Rural Digital Opportunity Fund that will target $16B to serve up to 10.25M Americans that currently lack access to fixed broadband service meeting benchmark speeds. Nearly half of New York City residents earning more than $100,000 a year said they considered leaving the city recently, with cost of living being the top factor, according to a Manhattan Institute survey. Some executives are considering no longer maintaining offices and seek to determine how this would affect collaboration and teamwork, and affect new employees joining the organization. Two major consulting firms, McKinsey and Deloitte, have won coronavirus-related contracts worth at least $182M from states.
Florida voters approved a ballot initiative to raise its minimum wage to $15 per hour. Voters in Illinois rejected an amendment to allow a graduated income tax to replace the flat tax currently mandated in the state constitution. Voters in the city of Austin approved propositions for a property tax rate increase that will help fund Project Connect, a $7.1B public transit plan.
Positive Company-Specific News
- Progressive reported earnings to common shareholders of $1.5B, or $2.59 per diluted share, on revenues of $10.9B during the quarter ended Sept. 30.
- Cardinal Health reported first quarter fiscal 2021 revenues of $39.1B, an increase of 5% from a year ago. First quarter operating loss was $624M due to a pre-tax accrual related to litigation.
- Phoenix Quality Manufacturing (PQM) will open its first U.S. based manufacturing facility in Jackson, Ohio. The facility will begin its first product line of manufacturing PPE for civilian use.
- The Ohio State University partnered with Vancouver biotech company BioVaxys Technology to collaborate on the company’s COVID-19 vaccine candidate.
- AEP Energy Partners is seeking proposals for off-take from new solar and new wind facilities located in Ohio.
- Dunkin' Brands Group is looking to fill 1,000 positions in Northeast Ohio, including in Cleveland, Youngstown and Akron.
- Ohio-based Neuromodulation technology developer Neuros Medical filed with the SEC to confirm the sale of $37M in equity.
- Core Molding Technologies reported net income for third quarter 2020 of $3.3M, a $9.4M improvement compared to the $6.1M loss reported for the same period in 2019.
- QQE Summit will move its headquarters from California to Dayton while expanding manufacturing operations, creating 14 jobs and investing $15.8M in their local operations.
- Steris PLC reported 3% revenue growth for their fiscal 2021 Q2. Their revenue growth reflected strength in segments “with exposure to COVID-19 related products and services.”
- Avient Corporation posted better-than-expected performance with sales up $924M from $705M for the same quarter 2019.
- Myers Industries’ net sales increased 5.4% and gross margin increased by 4.1% compared to the same quarter 2019.
Negative Company-Specific News
- Teamster workers at the Coca-Cola Consolidated facility in North Toledo went on strike Monday amid contract negotiations.
- S&P Global Ratings downgraded FirstEnergy and its subsidiaries to BB+ from BBB.
- Marathon Petroleum reported a $1B quarterly loss as its fuel-making business posted a $1.6B loss from operations, compared with $989M in operating income during the same period last year.
- Wendy’s posted Q3 2020 financials showing recovery from the previous quarter but overall, revenue was down 1.7% from 2019 year-to-date and net income was down 28.4%.
- SCI Engineered Materials’ Q3 2020 financials showed a 54% drop in revenue from a year ago and a 25% drop year-to-date. Gross profit also fell 24% year-to-date.
- GrafTech International posted declines in revenue and net income on steel production levels and continued customer “inventory destocking.” Revenue for the quarter was $287M compared to $421M for 2019’s Q3.
- Eaton posted revenue and net sales declines for the quarter and year-to-date. Sales were $4.5B compared to $5.1B a year ago. The CEO is pleased with their results despite the impact of COVID-19.