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News & Press

Ohio’s Economic Diversification Continues to be Top 10 in the U.S.

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

Wed Oct 26 2022
Economic Insights graphic

Key Economic Insights

  • U.S.: Headline inflation remained at 40-year highs in September. The Consumer Price Index rose to an annual rate of 8.2%. Bloomberg forecasts probability of recession in 12-months at 100%.
  • Ohio: Unemployment remained at 4.0% in September. Honda and LG Energy Solution announced a combined investment of $4.2B that is expected to create more than 2,500 new Ohio jobs.

U.S. Insights

The Consumer Price Index (CPI) rose 0.4% in September, an annual increase of 8.2%. Core CPI accelerated 0.6%, an annual increase of 6.6%, marking the largest 12-month gain since August 1982. The Producer Price Index (PPI) for final demand rose 0.4% in September, the first monthly increase since June 2022. On an annualized basis, PPI has increased 8.5%. Core PPI rose 0.4% during the month to an annual increase of 7.2%.

Consumer spending showed signs of cooling in September as retail sales remained flat after rising 0.4% in August. Industrial production in the U.S. exceeded forecasts in September, rising 0.4% after declining 0.1% in August. Stronger than expected growth came as manufacturing output rose 0.4% during the month, continuing momentum in August. Capacity utilization in the industrial sector rose to 80.3% in September from an upwardly revised 80.1% in August.

The Conference Board Leading Economic Index(LEI) for the U.S. decreased 0.4% in September after remaining unchanged in August. The LEI is down 2.8% over the six-month period between March and September 2022, a reversal from its 1.4% growth over the previous six months. The report noted that weakness among the leading indicators was widespread. The Conference Board forecasts real GDP growth will be 1.5% year-over-year in 2022 before slowing further in the first half of 2023. The Conference Board’s CEO Confidence Index also deteriorated to levels not seen since the Great Recession.

The NFIB Small Business Optimism Index rose 0.3 points in September to 92.1, the ninth consecutive month below the 48-year average of 98. Thirty percent of owners reported that inflation was their #1 problem. U.S. homebuilder sentiment declined for the tenth consecutive month in October. Existing home sales fell in September for the eighth straight month – the longest decline since 2007. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) fell eight points to thirty-eight during the month, the lowest level since 2012. Builders cited rapidly rising interest rates for the decline. Weekly jobless claims declined to 214,000 during the week ended Oct. 15. Continuing claims rose by 21,000 to a total of 1.385M.

Bloomberg forecast of recession within the next 12 months was increased to 100% from 65% in the last forecast.

Ohio Employment & Economic Insights

Ohio’s unemployment rate was 4.0% in September, unchanged from August. Nonagricultural wage and salary employment decreased 7,600 to 5,480,500, and the labor force participation rate decreased to 61.7%, down from 61.8% in August. Ohio recorded 14,493 new business filings in September 2022. A total of 138,167 new businesses were created in 2022 so far, averaging 15,352 per month.

Ohio startups have raised a total of $1.83B across 150 deals through the first three quarters of 2022, according to the latest data released by Pitchbook and the National Venture Capital Association. Through the first three quarters of the year, Ohio companies rank #15 nationally in total VC investments. In 2021, Ohio companies secured a record $2.38B in venture capital funding across 200+ deals, the most in the state’s history.

Moody’s Investors Service affirmed the State of Ohio's Aa1 Issuer Rating and revised the state’s outlook to positive from stable. The positive outlook is based on evidence of new economic developments that could diversify the state's economy, improve growth, and strengthen demographic trends over the medium term.

Honda and LG Energy Solutions announced a combined investment of at least $4.2B that will create 2,527 new jobs in Ohio. Honda and LG Energy Solution will invest $3.5B in a new Fayette County battery plant, which will create at least 2,200 new jobs. A total of $700M will be invested by Honda to retool its Marysville Auto Plant in Union County, Anna Engine Plant in Shelby County, and East Liberty Auto Plant in Logan County, creating 327 new jobs on top of its current workforce. Honda will host over 1,000 students in October at manufacturing plants, including in East Liberty and Anna, Ohio, highlighting modern manufacturing and promoting STEM education.

Ohio will receive nearly $2B in funds from the Bipartisan Infrastructure Investment and Jobs Act for projects to improve bridges, roads, tunnels, and other surface infrastructure. The Ohio Department of Development has announced $182M in support to small businesses, funded by the Federal Small Business Credit Initiative. For employers with annual gross receipts of at least $371,000, Ohio’s minimum wage will increase from $9.30 an hour for non-tipped employees to $10.10 an hour beginning Jan. 1, 2023.

The Appalachian Regional Commission awarded $8.5M to nine projects in Ohio through its Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative to support economic diversification in coal-impacted communities. Honeywell has selected Cleveland, along with four other U.S. cities, to be part of its Smart City Accelerator Program. A new report from Heartland Forward named the University System of Ohio the 4th best system for tech transfer in the U.S.; the report also named Cleveland Clinic as the 8th best research institution for tech transfer.

Ohio Company News

  • Kroger will acquire Albertsons for $24.6B; combined, they will employ over 700,000 across 5,000 stores.
  • P&THE Manufacturing will add 175 jobs and $5M in investment to revitalize Ross Aluminum in Sydney.
  • Cirba Solutions will add 150 jobs as part of a $200M investment into its Lancaster battery recycling facility; it will also get $75M as one of 20 battery projects funded by the Bipartisan Infrastructure Law.
  • STAR Turbine will expand to a new Marion location with $1M in capital and nineteen new jobs.
  • Redi.Health has raised $3.7M toward a goal of doubling by mid-2023.
  • Flexjet will go public through a SPAC, merging with Horizon Acquisition Corp. II, valuing it at $3.1B.
  • The Sherwin-Williams Co. plans to acquire Industria Chimica Adriatica S.p.A. – an Italian designer, manufacturer, and distributor of industrial wood coatings – by the end of 2022.
  • Hillenbrand has finalized its acquisition of French company Linxis Group for roughly $579M.
  • Lincoln Electric has agreed to acquire Michigan-based Fori Automation for $427M in cash.
  • Sequioa Financial will get a minority stake investment of over $200M from Valeas Capital Partners.
  • Core Specialty Insurance, HQ’d in Cincinnati, has acquired Hallmark Financial’s E&S lines for $40M.
  • Trailhead Biosystems, HQ’d in Cleveland, has completed a $10M Series A-2 equity financing.
  • PatientPoint, HQ’d in Cincinnati, will acquire Baltimore-based healthcare software company Rendia.
  • Refinery Ventures has pledged $3M to fund Cincinnati boomerangs – entrepreneurs who return home.
  • Cleveland Clinic’s Global Center for Pathogen & Human Health Research, was awarded a five-year, $2.9M grant from the National Institutes of Health to study a tick-borne virus pathogen.
  • Cleveland Clinic and IBM have begun deployment of the first quantum computer in healthcare.
  • Breeze Airways will begin operations at the Cincinnati/Northern Kentucky International Airport with low-cost direct flights to San Francisco and Charleston, starting February 2023.
  • Clarametyx Biosciences, a Nationwide Children’s spinoff, has received approval from the FDA to perform human trials on a new pneumonia treatment aimed at fighting antibiotic-resistant infections.