Ohio Startups Raised $900 Million in Q1

This report is a summary of third-party economic research and perspectives to foster communication with business and economic development stakeholders.

• U.S.: Consumer prices rose at fastest annual rate since 1981 in March. IMF lowered the U.S. GDP growth to 3.8% for 2022.
• Ohio: Unemployment rate declined to 4.1%; Labor force participation rate rose to 61.7% in March. Venture Capital investment surpassed $900M in Q1 2022, more than the full-year total for 2019.

In the World Economic Outlook Report, The International Monetary Fund (IMF) revised forecasts for U.S. GDP growth to 3.7% for 2022, down from 4.0% growth projected in January.  NFIB Small Business Optimism Index fell to a two-year low of 93.2 in March, with owners reporting inflation as their largest concern. Public expectations for 1-year inflation rates rose to 6.6% according to a Federal Reserve Bank of New York survey, up from 6% in February and the highest figure recorded since the survey began in 2013.  The Conference Board’s Leading Economic Index (LEI) for the U.S. increased by 0.3% in March to 119.8 (2016 = 100).

Consumer prices rose at the fastest annual rate since 1981 in March, with the Consumer Price Index (CPI) rising at an 8.5% annual rate. Core CPI, which excludes food and energy, rose at a 6.5% annual rate. The Producer Price Index (PPI) increased at an 11.2% annual rate in March, marking the largest annual rise since November 2010.  Consumer spending remained strong in March, but showed signs of decelerating as consumers continue to face rising prices.  Retail sales rose 0.5% in March, following a revised gain of 0.8% in February.

U.S. Import prices rose 2.6% during the month, largely attributed to rising costs for transportation, commodities, labor and materials. On an annualized basis, import prices increased 12.5%, the highest annual increase since 2011. U.S. Export prices rose 4.5% during the month, doubling economist forecasts. On an annualized basis, U.S. export prices increased 18.8%, the largest gain since tracking began in 1984.

Ohio’s labor market continues to show signs of strength. In March, Ohio’s unemployment rate fell to 4.1%, down from 4.2% in February. The labor force participation rate increased to 61.7% during the month.

Nonagricultural wage and salary employment increased by 18,300 during the month, totaling 5,467,700. The number of workers unemployed in Ohio fell by 5,000 in March and has decreased by 90,000 in the last 12 months.

Ohio recorded more than $900M in Venture Capital (VC) deal activity in the first quarter of 2022 according to preliminary data from Pitchbook, continuing positive momentum from 2021’s record year. VC deal activity in the first quarter alone has already surpassed the full-year total for 2019 when the state saw $887M in total deals. Just last year (2021), Ohio set a full-year record for VC deal activity, totaling $2.43B.

Developing a Hydrogen Economy in Ohio: Challenges and Opportunities, a comprehensive study released by JobsOhio and the Stark Area Regional Transit Authority (SARTA), asserts that Ohio is poised to become a leader in the clean hydrogen-fueled, zero-emission economy of the 21st Century.  Team NEO and the Fund for Our Economic Future, aided by the Lincoln Institute of Land Policy, recently launched a new digital tool called ESG to the Power of Place to provide racial equity and environmental scores for regional job sites.

Ohio OBM’s latest monthly financial report shows state tax revenues in March beat estimates by $324M (20.8%), the largest whole-dollar and percentage variance experienced this fiscal year. For the fiscal year-to-date, the state’s tax revenue is beating the forecast by $1.4B (7.7%).  Industrial vacancy rates across Ohio’s major metro areas declined further during the first quarter of 2022, according to preliminary estimates from Cushman & Wakefield. Vacancy rates in Cincinnati (3.0%) and Columbus (1.7%) remain below the national average of 3.3%. Cleveland (3.4%) continues to see improvement from the fourth quarter of 2021.

A recent analysis from Ownerly ranked Cincinnati (#9), Ashland (#11) and Toledo (#14) among the top 25 best cities in the U.S. for remote workers. The study analyzed 445 cities across the U.S. on metrics including rent, housing prices, cost of living, safety data, level of broadband and free Wi-Fi coverage, and added metrics including cost and availability of childcare, restaurants and coworking spaces.

• Facebook plans to expand its data farm in New Albany; will raise the company's total investment in the campus to more than $1.5B. The expansion will support more than 300 direct jobs.
• Kettering Health plans to open a new medical center in Wilmington in 2023, marking its first operation in the city. The 32,000 SF facility will employ approximately 100 full-time positions.
• Mikesell's has proposed a new project to bring its puffcorn product line manufacturing back to its Dayton HQ. The company also plans to make additional capital investments including $1.8M in equipment, renovations and installation expenses, creating 10 new jobs and retain 62 existing positions.
• W.Britain Toys will invest over $226,000 to add manufacturing capabilities to the company’s operations in Chillicothe, creating 8 new jobs.
• FlightSafety International held a ribbon-cutting ceremony at its new HQ in Columbus. The new 35,000 SF facility will support long-term growth, talent recruitment and workforce retention in the Columbus area.
• TrustedSec will open its new 20,000 SF corporate complex in Fairlawn in May. The new facility includes state-of-the-art cybersecurity features, including a Cyber War Room, Digital Forensics Lab, Cyber Incident Intrusion Center and a Device Hacking Lab for testing Internet of Things (IoT) devices.
• Tark Inc. has relocated operations to Miamisburg. The move increases the firm’s footprint to 51,000 SF. The expansion also gives the firm 20,000 SF of additional production space.
• Fifth Third Bancorp will raise its minimum wage to $20 per hour beginning July 4, and will provide a wage adjustment for the first four job levels that are above the Bank’s new minimum wage. In total, more than 40% of the Bank’s workforce will receive a midyear compensation increase.
• Northwest Bank is committing $250M to a loan fund for small business, commercial loans and home mortgages within low- and moderate-income neighborhoods in the Columbus region. The fund will go toward economic development, including affordable housing and commercial development in historically disinvested communities.
• United Airlines announced plans to resume daily nonstop service to San Francisco from John Glenn Columbus International Airport starting in June. The Columbus Regional Airport Authority described it as a “critical route connecting the Columbus region with business and tourism opportunities.”
• Hughey & Phillips LLC was awarded a $37.4M contract from the U.S. Navy for the production and delivery of up to 16 approach lighting systems, as well as associated accessories, data, interim spares and engineering support.
• Horizon has completed the acquisition of Consolidated Cooperative's commercial fiber business, adding approximately 450 route miles of fiber to Horizon's existing all-fiber network, further expanding its footprint through Delaware, Marion and Richland counties.