PLUS REVIEW Q Quarterly Economic Indicators 18 Counties of Northeast Ohio

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1 For Q2, most of the economic indicators tracked in this report total employment, unemployment rate, change in employment by sector, gross regional product, industrial and office vacancy, and Ohio Utica well activity show signs of improvement. Specifically, employment in Northeast Ohio Network Regional Partner continues to grow, up 40,000 jobs from Q1 and 3,000 jobs year-over-year. This report also takes an in-depth look at employment growth in PLUS REVIEW Q2 Quarterly Economic Indicators 18 Counties of Northeast Ohio headquarters locations from 1990 to. Northeast Ohio is home to more than 500 headquarters, which are significant contributors to the region s employment and economy. These major corporations continue to demonstrate their commitment to Northeast Ohio by investing in both their facilities and workforce.

2 Employment climbs in Northeast Ohio headquarters* locations Eaton Corp., Goodyear Tire & Rubber Co. and J.M. Smucker Co. are among the dozens of corporations that have invested in their headquarters here in recent years. The region ranks fourth in the nation in terms of headquarters employment share and has been outpacing the nation in headquarters employment growth since CAPITAL INVESTMENTS IN HEADQUARTERS Amtrust financial Cleveland $20 million Headquarters renovation Austen bioinnovation institute Akron $13 million New headquarters, research and training center Eaton Corp. Cleveland $170 million New operational headquarters in Beachwood Goodyear tire & rubber co. Akron $161 million New global headquarters housing 3,000 employees J.M. Smucker co. Orrville $165 million Expansion of headquarters and production capabilities Nestle Solon $80 million Expansion of headquarters and global research facility Rosetta Cleveland $10 million Headquarters location and renovation * Headquarters in this report is defined as NAICS Code 55 - Management of Companies and Enterprises Vitamix Cleveland Headquarters expansion to support international sales growth $10 million total headquarters employment in neo: NEO Headquarters Employment Strong HQ Employment 60,000 50,000 40,000 30,000 20,000 Northeast Ohio headquarters employment is climbing steadily, growing from 19,000 employees in 1990 to nearly 49,000 in. While headquarters employment makes up about 3% of Northeast Ohio employment, it represents more than 6% of all wages in the region. Source: Economy.com 10, change in headquarters employment: neo vs us, = 1990 Employment The Northeast Ohio area offers sophisticated financial, legal and professional communities, an outstanding workforce and an excellent quality of life. Steven J. Demetriou Chairman & Chief Executive Officer Aleris 2.50 Percentage Change HeadquarterS employment grows 160% Headquarters employment in Northeast Ohio has grown nearly 160% from 1990 to as major corporations embrace the region s assets. Over the same time span, US headquarters employment has increased only 22%. Source: Economy.com NEO HQ Employment US HQ Employment

3 Share of Headquarters Employment: Top 20 US Markets NEO Headquarters employment Share 4th Highest in Nation Northeast Ohio has the fourth-heaviest concentration of HQ employment, at 38% higher than the national average. Proportionately, the region outpaces much larger markets, including Chicago, Atlanta, New York and Los Angeles hq lq Minneapolis St. Louis San Francisco NEO Boston Detroit Chicago Atlanta New York Tampa Seattle San Diego Los Angeles Phoenix Dallas Miami Houston Baltimore Riverside- San Bernardino KEY: Location Quotient (LQ) compares Northeast Ohio and other regions with the US as a whole. An LQ of 1.0 represents the national average. An LQ of 1.2 is 20% higher than the national average. An LQ of 0.8 is 20% less than the national average. Philadelphia, PA and Washington, DC are excluded due to lack of data. Headquarters continue to be a driving force of the region s employment and economy. Ned Hill Dean, Levin College of Urban Affairs Cleveland State University Development Activity PEPPERIDGE FARM COMPANY EXPANDS When exploring expansion options to boost its production of Goldfish crackers, Pepperidge Farm chose Northeast Ohio, where the Willard plant has been making cookies since The $94 million expansion will add 50 new jobs to the region. Pepperidge Farms cited the quality of Northeast Ohio s workforce and the low cost of doing business in the region as reasons for selecting the Willard location. NESTLé BUILDS PRODUCT TECHNOLOGY CENTER Nestlé has broken ground in Solon on its new $53 million, 144,000-square-foot global Product Technology Center (PTC), an R&D facility dedicated to frozen and chilled foods research. The PTC will house offices and labs for approximately 100 scientific, professional and technical staff. It joins other major Nestlé facilities in Solon, including Nestlé Prepared Foods Company, located there since 1968, and employing 1,900 in its offices and operational facilities. ADVANCED ENERGY FUELS STARK COUNTY ACTIVITY The Timken Company and Stark State College collaborated to open a cutting-edge, 18,000-square-foot technology and test center, the first of its kind in America. The $14 million center tests ultra-large bearing systems on sophisticated equipment that simulates harsh operating conditions such as those found in large wind turbines. The new test facility will shorten development cycles and improve the reliability and cost-effectiveness of large rotating systems. The test center also houses a classroom/lab to train Stark State students in electrical and mechanical engineering as well as energy programs including solar and wind energy, oil and gas, and fuel cells. In May, Stark County dedicated Energy Drive, the $5.1 million highway project that opens access to the Beck Industrial Park. Although it spans less than a mile, Energy Drive is vital to the county s oil and gas industry. It provides a route for employees and contractors of Chesapeake Energy to travel from the company s regional field office to the developing Utica Shale fields. The Beck complex, which includes a five-story office building slated for completion within a year, will house 500 to 700 employees. SIEMENS INVESTS IN YOUNGSTOWN-WARREN REGION Recognizing the potential of additive manufacturing with the founding of the National Additive Manufacturing Innovation Institute in downtown Youngstown, Siemens announced in May a $440 million in-kind grant to Youngstown State University s Science, Technology, Engineering and Mathematics (STEM) College for state-of-the art product lifecycle management (PLM) engineering software and training. Siemens also has completed the acquisition of Cortlandbased rolling mill repair and refurbishing specialist Service Guide Inc. an acquisition that will enable Siemens to broaden its product line. DOWNTOWN CLEVELAND PROJECTS COMPLETE AS MORE EMERGE Two major downtown Cleveland projects are complete: The $465 million Global Center for Health Innovation (formerly known as the Medical Mart) and attached Convention Center opened to the public in June. Among the Convention Center s inaugural events: the National Senior Games, held July 19 - August 1. The $275 million first phase of the Flats East Bank is in full swing with the opening of the 150-room Aloft hotel and a variety of restaurants. The 450,000-square-foot Ernst & Young office tower also began welcoming tenants. Many more construction projects are under way: The $290 million Innerbelt Bridge is scheduled to open this November. A major renovation of the former Ameritrust complex will transform it into a mixed-use space that will house a hotel, apartments, retail operations and offices, including the new headquarters for the Cuyahoga County government. The $64 million overhaul of the Westin Hotel is progressing. Plans for a $260 million, 650-room convention center hotel are also taking shape.

4 Northeast Ohio Total Employment (not seasonally adjusted) TOTAL EMPLOYMENT GROWS TO 2.02 MILLION Total NEO employment reached 2.02 million workers in Q2, up 40,000 jobs from Q1. Year-over-year employment is up 3,000 jobs. This marks the 12th consecutive quarter of employment growth. Source: Current Establishment Survey (CES), a survey of 145,000 businesses and government agencies throughout the country. Data includes 18 county aggregate employment % unemployment rates through june 12% 11% 10% 9% 8% OHIO US 7% 6% NEO 5% 4% Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 NEO OHIO US change in employment by sector through june 1.0 = average SERVICES Government Manufacturing.60 CONSTRUCTION.60 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Total employment in millions Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q1 Q2 Q3 Q4 NEO UNEMPLOYMENT LOWER THAN NATIONAL RATE With an unemployment rate of 7.1% in Q2, Northeast Ohio is similar to the state of Ohio (7.0%) and lower than the US rate of 7.4%. Year-over-year the unemployment rate remained unchanged. Source: Current Population Survey (CPS), a survey of 60,000 households nationwide SERVICES EMPLOYMENT OUTPACES The services sector gained 5,000 jobs year-over-year, averaging 1.23 million workers in Q2. Construction grew 8% year-over-year, averaging 63,500 workers. Both the government and manufacturing sectors declined slightly. Source: Current Establishment Survey (CES), a survey of 145,000 businesses and government agencies throughout the country. Data only avilabe for Cleveland, Akron, Canton and Youngstown MSAs. Manufacturing Services Construction Government

5 NEO REAL regional Gross Product (GRP) In Billions NEO GRP PROJECTED TO GROW NEO REAL GRP In Billions $210 $200 $190 $180 $170 $160 $ % 4.0% 5.3% 1.3% 2.7% 1.9% 1.4% (-2.4%) 1.2 % 2.0%.5% (-1.5 %) (-0.1%) (-2.1%) 2.3% (-6.4%) 2.7% 2.3% 0.9% Moody s Economy.com continuously revises projections for GRP. For the 18 counties of Cleveland Plus, the projected estimate for is.9% growth. Since 1994, our economy has grown nearly 21%. Source: Economy.com $140 $130 12% 11% 10% Northeast Ohio Industrial & Office Vacancy INDUSTRIAL SPACE VACANCY LOWEST SINCE The vacancy rate for industrial space is at 8.9%, the lowest rate since Q1. Occupied square feet is at 509 million square feet for industrial space. Class A, B and C office vacancy rate is at 11.9%, up from Q1. Vacancy Rate 9% 8% Source: CoStar 7% 6% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q Real GRP Average Annual Growth = 1% OFFICE INDUSTRIAL Ohio Utica Well Activity (noncumulative) WELL ACTIVITY JUMPED IN Q2 This graph shows the status of Utica shale wells originally permitted in each quarter. Since tracking results in Q2, there have been 739 total permits issued of which 447 have been drilled. Of those 447, there are 114 wells in production in the state. After plateauing for much of, well activity is at a record high in Q2 with 175 permitted wells, of which 55 have been drilled. Source: Ohio Department of Natural Resources Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Permitted Drilled Producing

6 Generous Support Provided by: Data SOurces Team Northeast Ohio uses a number of data sources for the Regional Economic Review. One of the primary sources is Moody s Economy.com (economy.com) data for Northeast Ohio. Moody s Economy.com county-level output, employment and payroll historical data are estimated from several publicly available sources and are summarized into the Team NEO regional footprint. It is important to understand data provided by Economy.com are estimates of economic activity. Team NEO also uses data from federal and state sources as part of the report. We rely heavily on data from the U.S. Bureau of Labor Statistics (bls.gov) and Ohio s Labor Market Information (lmi.state.oh.us) for information on wages, unemployment and both general and industry-specific employment. Industrial and office real estate data for this edition were derived from the CoStar Group. Due to market limits within the CoStar database, historic trend data for the Team NEO region are reflective of 14 of the 18 counties forming the regional footprint. These counties include: Ashtabula, Cuyahoga, Erie, Geauga, Huron, Lake, Lorain, Mahoning, Medina, Portage, Richland, Stark, Summit and Trumbull. Recession employment data for this edition reflect a 16-county footprint. Employment sector data reflect MSA data (Cleveland-Akron-Canton-Youngstown). ABout TEam NEO and The Cleveland Plus 18-County Region Team NEO is a nonprofit business attraction and growth organization that markets Northeast Ohio to the world, attracts new businesses and helps those that are here grow. We are the Northeast Ohio regional partner for JobsOhio, a private, nonprofit corporation that drives economic development and job creation for the state. We also work closely with economic development organizations across our 18 counties. Since, we have attracted 72 new company operations, more than 6,200 new jobs and $266 million in annual payroll to Northeast Ohio. Since becoming a JobsOhio regional partner in, we also have helped 162 companies within Northeast Ohio create or retain almost 45,000 jobs and add more than $3 billion in capital investment. For more information, visit connect with us Check out clevelandplusmakesthings.com our microsite Network Regional Partner 737 Bolivar Road, Suite 2000, Cleveland, Ohio NEO