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.
Key Economic Insights
- Global: IMF expects global GDP to grow 5.5% in 2021.
- U.S.: U.S economy contracted 3.5% in 2020. President Biden signed an executive order to bolster “Buy American” efforts.
- Ohio: Cleveland Innovation District unveiled. Ohio is positioned to lead.
The IMF raised its projections for global growth, due in large part to expectations of seeing “low levels” of COVID-19 across the world by the end of 2022. The IMF now expects global GDP to grow 5.5% in 2021, an upgrade from its 5.2% projection last year. The UN’s World Tourism Organization shows global tourism suffered its worst year on record during 2020 with international arrivals dropping by 74%. Destinations worldwide welcomed a staggering 1B fewer international arrivals in 2020 than in 2019. The 2009 Great Recession saw a 4% decline. Job losses or reduced work hours due to COVID-19 cost the world the equivalent of 255M jobs in 2020, the UN International Labour Organization said. The “massive impact” was nearly four times the number lost during the 2009 global financial crisis.
Major Taiwanese chipmakers are willing to prioritize supplies for automakers amid a global shortage of chips for the industry. Automakers around the world are shutting assembly lines due to the shortages, which in some cases have been exacerbated by the former U.S. administration’s actions against Chinese chip factories. Renewables overtake fossil fuels for first time in UK as Europe transitions to green energy.
Jobless claims dropped to 847,000 last week, down from a revised 914,000 the week before. The 4-week moving average was at the highest level since September. The U.S. economy grew at an annual rate of 4% in Q4 2020, reflecting both the continued economic recovery from the sharp declines earlier in the year and the ongoing impact of the pandemic. Overall, the economy contracted by 3.5% in 2020, the worst performance since 1946 and the first overall decline since the Great Recession of 2007-09. The President signed an Executive Order to strengthen “Buy American” provisions that encourage the federal government to purchase from U.S. companies. The move was cast as a first step in what was promised will be an aggressive push to steer more federal dollars to American suppliers.
Business activity in the private sector expanded January at the second-fastest pace in nearly six years. The composite index rose to 58.0 from 55.3 in December. Rates of expansion in business activity accelerated at manufacturers and service providers, with goods producers registering the sharpest upturn in output since August 2014, according to IHS Markit. S&P’s national home price index posted a 9.5% annual gain in November – the highest level since 2014. Prices for corn, soybeans and wheat are at their highest levels in more than six years due to dry weather and strong export demand from China. The rising commodity prices are rippling through the food chain, helping drive a sharp increase in U.S. farm income and lifting the prospects of rural businesses.
Amazon, the nation’s second largest employer, is adding 3,000 corporate jobs in Boston. United Parcel Service will sell its freight business to rival TFI International for $800M, pulling out of the domestic trucking market to focus on the soaring small-package-delivery business. GM has set a 2035 target date for phasing out gasoline- and diesel-powered vehicles from its showrooms globally, among the first major auto makers to put a timeline on transitioning to a fully electric lineup. Airbnb expects travel in 2021 to be focused on regional destinations rather than international tourist meccas 56% of people surveyed, saying they prefer a domestic or local destination versus 21% who are keen to visit someplace international and far away this year.
Ohio Employment & Economic Insights
Ohio Governor Mike DeWine and Lt. Governor Jon Husted were joined by the Ohio Development Services Agency, JobsOhio, Cleveland Clinic, University Hospitals, The MetroHealth System, Case Western Reserve University, Cleveland State University, City of Cleveland, and state legislators to unveil the Cleveland Innovation District. The Innovation District will be a point of collaboration among healthcare, higher education, and business institutions, creating significant research, development, and job opportunities.
Columbus is viewed as the Hub for American insurance innovation. US Ignite and Spectrum awarded a multi-year grant and resources to the State of Ohio for designing and implementing smart transportation initiatives. JumpStart announced “Access Tech” digital training initiative to connect Cleveland residents with the education and tools needed to thrive in the digital economy.
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