Ohio Recognized as a Top State for Small Business
This report is a summary of third-party economic research and perspectives to foster communication with business and economic development stakeholders.
Published: Tue Mar 28 2023
Key Economic Insights
- U.S.: The Federal Reserve raised interest rates by 25-basis points to a target range of 4.75-5.00%. CPI rose at a 6.0% annual rate in February, the lowest level since September 2021.
- Ohio: The unemployment rate declined to 3.9% in February; labor force participation rate increased to 61.4%. Fintech company Lendio ranked Ohio as the #3 best state for small business in 2023.
The Federal Reserve implemented a 25-basis point interest rate increase to bring the federal funds target range to 4.75–5.00%. The Fed expressed caution about the recent banking crisis and noted that future rate increases will be dependent on incoming data. In conjunction with their interest rate decision, the FOMC also released their Summary of Economic Projections. The median projection for GDP growth in 2023 was 0.4%, down slightly from 0.5% projected in December but still indicating modest growth in the economy this year. The median projection for the peak federal funds rate was 5.1%, unchanged from December and indicating that consensus expectations are for one additional rate increase this year.
The Consumer Price Index (CPI) advanced 0.4% in February to a 6.0% annual rate, the lowest level since September 2021. Core CPI increased 0.5% during the month to a 5.5% annual rate, the lowest level since December 2021. The Producer Price Index (PPI) declined 0.1% in February to a 4.6% annual rate. Core PPI increased 0.2% during the month to a 4.4% annual rate. U.S. retail sales declined 0.4% in February. Industrial production was unchanged in February, and manufacturing output rose 0.1% during the month. Capacity utilization was unchanged at 78.0%, remaining 1.6% below its long-run (1972–2022) average. Durable goods orders declined 1.0% in February, the second consecutive month of decline.
The NFIB Small Business Optimism Index increased to 90.9 in February, remaining below the 49-year average of 98. 28% of owners reported inflation as their single most important business problem, up slightly from January. The Conference Board Leading Economic Index (LEI) for the U.S. fell 0.3% in February to 110.0. The LEI declined 3.6% over the six-month period between August 2022 and February 2023; a steeper rate of decline than the 3.0% contraction over the previous six months (February–August 2022). Weekly jobless claims fell by 1,000 to a seasonally adjusted 191,000 for the week ended March 18. Continuing claims increased 14,000 to 1.694M during the week ending March 11.
Ohio Employment & Economic Insights
Ohio's unemployment declined to 3.9% in February 2023, down from 4.0% in January. Nonagricultural wage and salary employment increased by 900 during the month, and the labor force participation rate increased to 61.4%, up from 61.2% in January. Ohio saw a second consecutive record month for new business creation with 16,065 new business filings in February, the highest February number of filings in Ohio history. This continues on the momentum set in January when 17,006 new business filings were recorded, the largest January number of filings in state history.
Fintech company Lendio ranked Ohio as the #3 state in the U.S. for small businesses in 2023, considering metrics including lending, cost of living, real estate data, educated worker migration, corporate taxes, and state-level incentives. The Association for Uncrewed Vehicles Systems International (AUVSI) named JobsOhio and the Ohio Department of Transportation, Propelling AAM in Ohio as a finalist in the Operations category of the AUVSI XCELLENCE Awards, which recognizes innovators committing to advancing the safe adoption of drones, robotics, and autonomous technologies.
A total of $50M in development grants will be awarded as part of the first round of funding through Ohio’s Appalachian Community Grant Program. This initial round of funding will be used to launch four transformational projects impacting communities across 11 Ohio counties. In addition to these grants, 21 organizations will receive approximately $7.7M in technical assistance grants. A total of 345 employers across the state were approved for funding during the January round of Ohio’s TechCred program, providing the opportunity for Ohioans to earn 4,237 tech-focused credentials.
Ohio Company News
- Honda announced key next steps in establishing its EV Hub in Ohio, retooling its Marysville Auto Plant, East Liberty Auto Plant, and Anna Engine Plant for the production of EVs and components.
- Illuminate USA intends to hire 850 in Pataskala with a $220M investment into a new 1.1M SF solar panel manufacturing facility.
- Norwood Medical plans to expand their HQ in Dayton, adding 72,000 SF to their existing footprint with plans to create 100 jobs.
- Pegasus Industries plans to invest $2M in a new 200,000 SF addition in Chillicothe. Over 30% of Pegasus’ workforce are second-chance employees in recovery from substance abuse disorders.
- The Andersons intends to add a new 10,000-ton storage building at its wholesale fertilizer distribution terminal in Lordstown.
- Synergy Building Systems will open a Class A facility for defense contracting R&D in Dayton.
- AVANGRID is constructing a 202.5 MW solar farm in Putnam County.
- Altafiber will invest $100M to bring gigabit fiber access to 52,000 addresses in Warren County.
- Cleveland Clinic and IBM unveiled the first deployment of an onsite private sector IBM-managed quantum computer in the U.S. The Quantum System One will be the first quantum computer in the world to be dedicated to healthcare research with an aim to accelerate biomedical discoveries.
- Cincinnati/Northern Kentucky International Airport was ranked as the second-best regional airport in North America by London-based Skytrax, which surveys passengers.
- Sense Neuro Diagnostics received $250K in funding from St. Elizabeth Healthcare to advance its clinical trials as the company moves toward commercialization.
- TransDigm plans to acquire New York-based Calspan for $725M in cash.