1. business and industrial
2. manufacturing

NETWORK
REGIONAL PARTNER
PLUS REVIEW APRIL 2015
Quarterly Economic Indicators
18 Counties of Northeast Ohio
This Cleveland Plus Economic Review takes an in-depth look
at manufacturing, the largest sector of the region’s economy.
While employment has declined due to efficiencies, gross
regional product (GRP) grew by 17% from 1990 to 2015, making
manufacturing a $43.6 billion industry. It is projected to be a
$53.3 billion industry by 2025, a 25% increase.
In looking at the overall health of the economy, Cleveland Plus
continues to show steady growth, with all economic indicators
trending up year-over-year. For example, the 18-county region
gained an average of 15,500 jobs from Q3 2013 to Q3 2014.
The unemployment rate was down 1.6% for the same time period.
Not only historically significant to Cleveland
Plus, manufacturing is also vital to the region’s
economy going forward. The importance of
our manufacturing efforts and expertise is
expected to grow throughout the next
decade, as manufacturing companies here
continue to build equipment and components
that power industries across the nation and
around the world.
+200%
+150%
+100%
+50%
0
-50%
-100%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Manufacturing
Plays a Pivotal
Role in Northeast
Ohio’s Future
MANUFACTURING PRODUCTIVITY IN NORTHEAST OHIO:
1990 - 2025 ( PROJECTED)
PRODUCTIVITY
GROSS PRODUCT
EMPLOYMENT
The relationship between gross regional product (GRP) and employee results
in productivity, or output per employee. GRP is projected to grow 25%, and
productivity 63%, over the next 10 years, following growth of 17% for GRP
and 92% for productivity from 1990 to 2015.
Source: Moody’s Economy.com
GRP Grows as Efficiency Soars
From 1990 to 2015, the gross regional product (GRP)
of Northeast Ohio grew by 17%, while productivity*
increased by 92%. GRP is projected to grow another 25%,
and productivity another 63%, over the next 10 years.
The $43.6 billion manufacturing industry represents 19.5%
of our region’s economy today. By 2025, it is expected to
grow to $53.3 billion, representing 22% of the economy.
Employment Opportunities
While manufacturing employment has declined in the
Cleveland Plus region, decreasing 40% from 1990 to 2015,
it is estimated that there will be 49,000 job openings in
production occupations over the next ten years.
Many of these positions will require technological
expertise, as advances in production practices and
processes are introduced with increasing regularity.
According to MAGNET, the Manufacturing Advocacy
& Growth Network, which supports, educates and
champions manufacturing in Ohio with the goal of
transforming the region’s economy into a powerful, global
player, manufacturers are looking to recruit not only
talented scientists, engineers and production technicians,
but also accountants, IT specialists, lawyers, marketing
and public relations specialists, and other professionals.
Recognizing that a highly skilled, qualified workforce is
vital to their success, these manufacturers are working
with MAGNET to collaborate with schools, universities,
community colleges and technical centers to ensure
that students understand the vast range of opportunities
available to them and that education and training
programs adequately prepare these students for successful
manufacturing careers. Co-op and internship programs,
plant tours, job shadowing and mentoring experiences are
all part of the opportunities manufacturers are providing
to better align the next generation of manufacturing
employees with the evolving needs of the industry.
*productivity represents ratio of output per employee
Sector Strength:
Where Northeast Ohio Excels
Northeast Ohio spans the spectrum of manufacturing –
from automotive manufacturers such as Chevy Cruz in
Lordstown and Ford in Avon Lake, to food manufacturers
including Daisy Brand in Wooster and Pepperidge Farm in
Willard. In total, 21 manufacturing sectors are represented
in this region.
Of these 21 manufacturing sectors, 15 are projected to
grow in the coming decade. The sectors projected to
become the largest (based on dollar volume) by 2025 –
fabricated metal product manufacturing at $8.6 billion,
transportation equipment manufacturing at $8.3 billion
and chemical manufacturing at $8 billion – are expected
to comprise 47% of total projected output. The six sectors
expected to decline represent only 4% of total output.
In addition, Northeast Ohio is anticipated to outpace
the US in sector growth in two important categories:
(1) transportation equipment manufacturing, projected
to grow 52% in this region over the next decade while
the US is estimated to grow 26%, and (2) computer and
electronic product manufacturing, projected to grow
50% here as compared to a 35% national increase.
> By 2025, the manufacturing industry
is projected to represent 22% of
Northeast Ohio’s economy
> It is estimated that there will be
49,000 job openings in production
occupations in the next ten years
> From 1990 to 2015, manufacturing
productivity in Northeast Ohio increased 92%
DEVELOPMENT ACTIVITY
MANUFACTURING SECTORS WITH THE HIGHEST
PROJECTED GROWTH RATES IN NORTHEAST OHIO: 2015 - 2025
Primary metal
Electrical equipment,
appliance, and component
Machinery
Plastics and rubber products
Food
Chemical
Fabricated metal product
Nonmetallic mineral product
Computer and
electronic product
Transportation equipment
0
10%
20%
30%
40%
50%
The top 10 manufacturing sectors in terms of projected
growth for the 2015 – 2025 timeframe include: transportation
equipment manufacturing (52%), computer and electronic
product manufacturing (50%) and nonmetallic mineral
product manufacturing (37%).
GERMAN AUTOMOTIVE
COMPANY OPENS OFFICE
IN AKRON
Gläser GmbH, a German
company that tests parts for
automotive OEMs, has relocated
its Alabama office to downtown
Akron to be closer to American
automotive OEMs. This move is
the result of an introduction at
IMTS (International Manufacturing
Technology Show) 2014 in Chicago
last fall, and Team NEO’s ongoing
relationship with the economic
development organization of the
state of Baden-Württemberg in
Germany. Gläser GmbH will
create at least 10 new jobs.
Source: Moody’s Economy.com
LARGEST PROJECTED MANUFACTURING SECTORS
IN NORTHEAST OHIO IN 2025
Computer and electronic
Electrical equipment,
appliance, and component
Plastics and rubber products
Primary metal
Food
Petroleum and coal products
Machinery
Chemical
Transportation equipment
Fabricated metal product
$-
$1B
$2B
$3B
$4B
$5B
$6B
$7B
$8B
These 10 sectors are expected to be the largest (of 21 total sectors)
in 2025. Fabricated metal product manufacturing, transportation
equipment manufacturing and chemical manufacturing are
anticipated to comprise nearly half of all manufacturing
volume in the region.
Source: Moody’s Economy.com
MAJOR ROADWAY
CONSTRUCTIONS
UNDER WAY IN CLEVELAND
Two major roadway construction
projects will be under way in the
city of Cleveland this spring. In
February, the initial phase of the
Opportunity Corridor project
broke ground along E. 105th
Street in University Circle. When
completed in 2019, the three-mile
stretch will connect numerous
east side neighborhoods to the
interstate system and provide
enhanced access to several
hundred acres of available
vacant and underutilized land.
On the west side, major reconstruction of the Cleveland
Memorial Shoreway as part of
the Lakefront West project is
schedule to begin in April. The
reconfiguration will transform
more than two miles of the 50-mph
freeway into a tree-lined, 35-mph
boulevard that will improve
connections between several
west side neighborhoods and
Edgewater Park. It is scheduled
for completion in August 2017.
$9B
LORDSTOWN LOGISTICS
CENTER POTENTIAL HOME
TO GM SUPPLIERS
Ground is expected to be broken
this summer on a parcel of land
adjacent to the General Motors
Lordstown plant where the
Chevrolet Cruze is built. Property
owner NorthPoint Development
says it intends to construct as
many as five buildings spanning
1.5 million to 2 million square
feet and housing up to 2,000
employees. NorthPoint purchased
the 173.5 acres of vacant industrial
property it calls Lordstown Logistics
Center in November 2014. GM
suppliers and possibly other
distributors will be invited to locate
their offices in the center.
OH-PA STATELINE EXPORT
INITIATIVE AIMS TO STRENGTHEN
LOCAL, REGIONAL BUSINESSES
Following six months of planning
spearheaded by Youngstown
State University’s International
Trade Assistance Center and the
Youngstown/Warren Regional
Chamber, the OH-PA Stateline
Export Initiative has been
introduced through the launch
of its Web site, OHPAexports.com.
Ten counties in eastern Ohio
and western Pennsylvania are
involved in this effort, designed
to help local and regional firms
expand into global markets,
and to build national and
international awareness of the
region’s competitive strengths.
NEW PARTNERSHIP SUPPORTS
NEO FARMERS
Recognizing recent growth
and future opportunities in the
food processing industry, the
Youngstown/Warren Regional
Chamber and the Ohio Farm
Bureau have established a new
economic development
partnership that will support
7,000 Northeast Ohio farms.
Designed to serve the agriculture
industry, including farming,
food manufacturing, processing
and distribution, the partnership
will offer business development
assistance and help companies
make connections within the
industry. Food-related industries
have invested nearly $50 million
in the Mahoning Valley over the
past three years, and represent
7.5 percent of manufacturing
jobs in the region.
NORTHEAST OHIO TOTAL EMPLOYMENT (NOT SEASONALLY ADJUSTED )
TOTAL EMPLOYMENT
GROWS YEAR-OVER-YEAR
2.05
Total employment averaged 1.9 million
workers in Q3 2014 – an increase of 15,500 jobs
year-over-year, and more than 4,000 from
Q2 2014. This marks the 17th consecutive
quarter of year-over-year employment growth.
1.95
1.90
1.85
Source: Quarterly Census of Employment
and Wages (QCEW). This is the most current,
reliable data available for total jobs in
Northeast Ohio.
1.80
1.75
Q1
Q2
Q3
2013
2012
2011
2010
2008
2009
2014
2007
2013
2012
2011
2010
2008
2009
2007
2014
2013
2012
2011
2010
2008
2009
2014
2007
2013
2012
2011
2010
2008
2009
1.65
2007
1.70
Q4
NORTHEAST OHIO UNEMPLOYMENT RATES THROUGH SEPTEMBER 2014
NEO YEAR-OVER-YEAR
UNEMPLOYMENT RATE DOWN 1.6%
13%
12%
The unemployment rate for Northeast Ohio
averaged 5.9% in Q3 2014, on pace with
the State of Ohio at 5.6% and slightly lower
than the US rate of 6.2%. This represents a
1.6% decrease in the unemployment rate as
compared with Q3 2013, when it was 7.5%.
OHIO
11%
10%
9%
US
8%
7%
Source: Current Population Survey (CPS),
a survey of 60,000 households nationwide.
NEO
6%
5%
NEO
OHIO
Q3 14
Q2 14
Q1 14
Q4 13
Q3 13
Q2 13
Q1 13
Q4 12
Q3 12
Q2 12
Q1 12
Q4 11
Q3 11
Q2 11
Q1 11
Q4 10
Q3 10
Q2 10
Q1 10
Q4 09
Q3 09
Q2 09
Q1 09
Q4 08
Q3 08
Q2 08
Q1 08
Q4 07
Q3 07
Q2 07
Q1 07
4%
US
CHANGE IN EMPLOYMENT BY SECTOR THROUGH SEPTEMBER 2014
ALL SECTORS CONTINUE TO GROW
1.10
Construction employment continues to
outpace 2013, adding more than 4,000
workers year-over-year, an increase of 5.2%.
At 1.3 million jobs, the service sector added
nearly 7,000 workers year-over year, while
the manufacturing sector added more
than 2,500 jobs.
SERVICES
1.00
.90
.80
MANUFACTURING
Source: Quarterly Census of Employment
and Wages (QCEW). This is the most current,
reliable data available for total jobs in
Northeast Ohio.
.70
CONSTRUCTION
.60
MANUFACTURING
SERVICES
CONSTRUCTION
Q3 14
Q2 14
Q4 13
Q1 14
Q3 13
Q2 13
Q1 13
Q4 12
Q3 12
Q2 12
Q4 11
Q1 12
Q3 11
Q1 11
Q2 11
Q4 10
Q3 10
Q2 10
Q1 10
Q4 09
Q3 09
Q2 09
Q1 09
Q4 08
Q3 08
Q2 08
Q1 08
Q4 07
Q3 07
Q2 07
.50
Q1 07
TOTAL EMPLOYMENT IN MILLIONS
2.00
NORTHEAST OHIO REAL REGIONAL GROSS PRODUCT (GRP) IN BILLIONS
$230
$220
2.1%
1.9%
$210
NEO REAL GRP IN BILLIONS
GRP PREDICTED TO REACH $223 BILLION
2.4%
2.7% 1.6% 0.6%
%
4.1% 1.9
$200
1.6%
-1.6%
1.2% -0.5%
-1.1%
-1.3%
1.6%
Northeast Ohio’s GRP is projected to
grow 2.4% in 2015, as set forth by
Moody’s Economy.com. The projection
for GRP for the 18-counties of Cleveland
Plus has grown almost 31% since 1994.
2.4%
-5.7%
2.9%
4.5%
$190
3.3%
$180
3.1%
Source: Moody’s Economy.com
$170
$160
$150
2015
2014
2013
2011
2012
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
$130
1994
$140
AVERAGE ANNUAL GROWTH = 1%
REAL GRP
NORTHEAST OHIO INDUSTRIAL AND OFFICE VACANCY
12%
INDUSTRIAL VACANCY RATE AT
LOWEST RATE IN SIX YEARS
11%
The vacancy rate for industrial space is
at 6.3%, the lowest rate since Q1 2008.
Occupied space is at 530 million square
feet. Office vacancy remained steady
at 10.7%, down slightly from 10.9% in
Q4 2014. Occupied space is currently
at 148 million square feet.
VACANCY RATE
10%
9%
8%
Source: CoStar
OFFICE
Q1 15
Q4 14
Q3 14
Q2 14
Q1 14
Q4 13
Q3 13
Q2 13
Q1 13
Q4 12
Q3 12
Q2 12
Q1 12
Q4 11
Q3 11
Q1 11
Q2 11
Q4 10
Q3 10
Q1 10
Q2 10
Q4 09
Q3 09
Q2 09
Q1 09
Q4 08
Q3 08
Q1 08
6%
Q2 08
7%
INDUSTRIAL
OHIO UTICA WELL ACTIVITY ( NON-CUMULATIVE )
WELL ACTIVITY JUMPS IN Q1 2015
900
800
200
700
600
150
500
400
100
300
200
50
100
0
0
Q4 12
Q1 13
Q2 13
Q3 13
PERMITTED
Q4 13
DRILLED
Q1 14
Q2 14
Q3 14
PRODUCING WELLS
Q4 14
Q1 15
PRODUCING WELLS (CUMULATIVE)
PERMITTED/DRILLED WELLS (NON-CUMULATIVE)
250
This graph shows the status of Utica shale
wells originally permitted, drilled and in
production for each quarter. From Q4 2014
to Q1 2015, there were 168 new permits issued
and 82 new wells drilled. Well production
increased by 132, to 845 total producing
wells, an increase of 19%.
Source: Ohio Department of Natural Resources
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 this 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.
ABOUT TEAM NEO AND THE CLEVELAND PLUS 18-COUNTY REGION
Lake
LORAIN
CLEVELAND
Geauga
Cuyahoga
Erie
Trumbull
Lorain
Portage
Summit
Huron
Medina
YOUNGSTOWN
AKRON
Richland
Ashland
MANSFIELD
Ashtabula
Wayne
Mahoning
CANTON
Stark
Tuscarawas
Columbiana
Team NEO is a private-sector, regional collaboration of Northeast Ohio’s major
businesses, foundations, chambers of commerce, economic development
organizations and JobsOhio, a private, nonprofit corporation that drives economic
development and job creation for the state. Together we work to advance a regional
economic competitiveness strategy designed to accelerate job and economic
growth and provide opportunities for all segments of Northeast Ohio’s population.
To facilitate this growth, Team NEO markets Northeast Ohio to the world and
collaborates with its partners and others to attract new businesses, help those that
are here grow, and accelerate the pace and impact of innovation in the region.
As the regional network partner for JobsOhio, we support the retention and expansion
work of our 18 county partners by connecting them, and their client companies,
with both state and JobsOhio programs and incentives as well as resources across
Northeast Ohio. We use our industry knowledge and connections to enhance
innovation among driver industries and to identify and develop emerging
technologies and markets where the region has a competitive edge. For more
information, visit www.teamneo.org and www.clevelandplusbusiness.com.
CONNECT WITH US
NETWORK
REGIONAL PARTNER
737 Bolivar Road, Suite 2000, Cleveland, Ohio 44115
888.NEO.1411 • www.clevelandplusbusiness.com