Ohio Ranks Fourth Most Competitive State in Prosperity Cup

Key Economic Insights

• Global: WHO gives Sinopharm COVID-19 vaccine Emergency Use Listing; BioNTech to open mRNA manufacturing site in Singapore.
• U.S.: The April Manufacturing PMI registered 60.7%. Births fell for the sixth consecutive year to the lowest levels since 1979.
• Ohio: Site Selection magazine ranked Ohio #4 on its Prosperity Cup for the most competitive states in economic development.

Global Insights

Confirmed cases of COVID-19 have passed 158M globally, according to Johns Hopkins University.  The number of confirmed deaths stands at more than 3.29M.  More than 1.28B vaccination doses have been administered globally, according to the World Economic Forum.  The WHO has given Emergency Use Listing to the Sinopharm Beijing’s COVID-19 vaccine – the sixth vaccine to receive WHO approval.  BioNTech has announced plans to establish a regional headquarters for south-east Asia in Singapore, with plans for an mRNA manufacturing facility in the city state.  mRNA is the technology behind the COVID-19 vaccine the company has developed with Pfizer.  The company hopes the site could be operational as early as 2023.

Taiwan Semiconductor Manufacturing expects to be able to catch up with the “minimum requirement” of customer demand for auto chips by the end of June.  Posco aims to crack the growing field of lithium-ion batteries, as the South Korean company strives to expand beyond its traditional business into areas with a bright future such as electric vehicles.  Over the past decade, China has provided billions of dollars of subsidies to state-owned companies to acquire Western manufacturing rivals and to build factories beyond its own borders.  Now, these overseas factories are roiling global markets with low-price goods in sectors ranging from automotive tires and rail equipment to fiberglass and steel.

U.S. Insights

Total nonfarm payroll employment rose by 266,000 in April, and the unemployment rate was little changed at 6.1%, the U.S. Bureau of Labor Statistics reported Friday. Notable job gains in leisure and hospitality, other services, and local government education were partially offset by employment declines in temporary help services and in couriers and messengers.  U.S. Treasury Secretary Janet Yellen conceded that interest rates may have to rise to keep a lid on the burgeoning growth of the U.S. economy brought on in part by trillions of dollars in government stimulus spending. The U.S. foreign-trade gap in goods and services expanded 5.6% from the prior month to a seasonally adjusted $74.4 billion in March. The April Manufacturing PMI registered 60.7%, a decrease of 4 percentage points from the March reading of 64.7%.

Births fell for the sixth consecutive year to the lowest levels since 1979, the CDC said. The U.S. birth rate is so low, the nation is “below replacement levels,” meaning more people die every day than are being born, the CDC said. There are more job openings in the U.S. than before the pandemic hit in March 2020, and fewer people in the labor force, according to the Labor Department and private recruiting sites. Manufacturers say it is 36% harder to find talent today than in 2018 even though the unemployment rate is much higher today, according to the report. More than three-quarters of manufacturing executives (77%) surveyed said they expect to have trouble attracting and retaining workers this year and beyond.

The hyper-efficient auto supply chain symbolized by the words “just in time” is undergoing its biggest transformation in more than half a century, accelerated by the troubles car makers have suffered during the pandemic. Toyota is stockpiling up to four months of some parts.  Volkswagen AG is building six factories so it can get its own batteries.  And, Tesla is trying to lock up access to raw materials. Ford plans to produce its own battery cells domestically by 2025. Lyft is selling its self-driving division to a unit of Toyota for $550M, a move the ride-hailing giant said will help it turn a profit sooner than previously expected.

The survey by Kabbage, an American Express Company, shows 85% of small businesses reported they were fully open for business in March 2021, a 51% increase since the first Small Business Recovery Report which covered February 2021. JPMorgan Chase said it is opening its U.S. offices to all employees May 17 while adhering to a 50% occupancy cap. The S&P Dow Jones Indices launched new cryptocurrency indexes, further mainstreaming digital currencies by bringing them to the trading floors of Wall Street. SpaceX has received more than 500,000 orders so far for its satellite internet service, the company announced. IBM claims it has taken a major step forward in chip technology by making the first 2nm chip – squeezing 50B transistors onto a chip the size of a fingernail.  Record demand and material costs are causing a cardboard price surge.

Ohio Employment & Economic Insights

Site Selection magazine ranked Ohio fourth on its Prosperity Cup state rankings for 2021, which is awarded to the most competitive states in economic development. In addition, JobsOhio regional network partners One Columbus and REDI Cincinnati were recognized as Top Region Economic Development Offices. The Prosperity Cup Rankings are based on an index of 10 criteria, including project, capex and job creation data from Site Selection and data from the Tax Foundation, ACT and Beacon Hill Institute.

Positive Company-Specific News

• Path Robotics, the Columbus-based AI Robotics company responsible for designing the world’s first truly autonomous robotic welding system, received $56M in Series B funding, bringing the total invested in the company to $71M.
• The Kroger Co. and Drone Express announced a pilot to offer grocery delivery via autonomous drones, expanding the retailer’s seamless ecosystem and providing customers with anything, anytime, anywhere.
• Scotts Miracle-Gro continues to shatter sales records, with record-high revenue for its busiest spring quarter: $1.83B, one-third higher than the same period in the record-setting 2020.
• Evergreen has launched a project to double its food-grade recycled PET (RPET) plastic capacity to 80M pounds per year. A company leader noted the initiative harnesses “the latest and greatest technology.”
• Workhorse Group entered into a supply agreement with Coulomb Solutions the North American distributor of Contemporary Amperex Technology Co., Commercial Vehicle Battery Systems, to provide battery systems for their electric delivery vehicles.
• Sherpa Technologies, a leading digital transformation solutions provider, and Juniper Payments, the largest non-bank, cloud-based service provider of inter-bank transactions and reporting systems in the U.S., have formed a strategic partnership to provide a comprehensive portfolio of payment solutions through integration between their respective payment hubs.
• Shoe-maker Crocs plans to reach over 1M square feet, 1,200 jobs in Dayton following the latest expansion.

Negative Company-Specific News

• Cardinal Health reported third-quarter fiscal 2021 adjusted earnings of $1.53 per share (EPS), which lagged the Zacks Consensus Estimate of $1.58 by 3.2%. The bottom line declined 5.6% year over year.
• The truck driver shortage is a real issue for Northeast Ohio business that could soar prices. Supply chain issues can cause a slowdown of the economy and a truck driver shortage could be a trigger. Cleveland Express Trucking said the company has idle trailers sitting in the yard on Rockefeller Avenue, just south of downtown Cleveland.

Resources

• Ohio Department of Health’s COVID-19 Website: www.coronavirus.ohio.gov
• JobsOhio’s information about Open, Secure Supply Chains in Ohio