Fast Food & Obesity: an Inside Look into the Heaviest Nation
Northeast Ohio has the second-heaviest concentration 187,000€¦ · In November 2016, Sterigenics,...
Transcript of Northeast Ohio has the second-heaviest concentration 187,000€¦ · In November 2016, Sterigenics,...
PLUS REVIEW AUGUST 2018Quarterly Economic Indicators 18 Counties of Northeast Ohio
Northeast Ohio has the second-heaviest concentration of headquarters employment
187,000
Northeast Ohio is an ideal location for headquarters and professional services companies, as it offers a low cost of doing business, a robust workforce and world-class educational institutions. Twenty Fortune 1000 companies have roots in this region, and companies such as Progressive Casualty Insurance, Nestle USA, Lubrizol, MCPc Inc. and The J.M. Smucker Company continue to grow and invest here. Employment has grown steadily from 2001 to 2017, as the region maintains the nation’s second-heaviest concentration of headquarters employment among the 20 largest metros in the U.S. This report explores this momentum.
TECHNOLOGY NETWORK continues to flourish
15%EMPLOYMENT GROWTH 2001- 2017
HEADQUARTERS AND PROFESSIONAL SERVICES FIRMS THRIVE IN NORTHEAST OHIO
TOTAL HEADQUARTERS
& PROFESSIONAL
SERVICES EMPLOYEES
The upward momentum in Northeast Ohio’s headquarters employment is projected to continue as the region is supported by financial, legal, insurance and other world-class professional services firms.
Almost 187,000 workers support headquarters and professional services operations including seven
law firms employing 100 or more attorneys, and major banks such as KeyCorp and The Huntington
National Bank. Northeast Ohio is also home to the Fourth Federal Reserve District, one of 12
regional Reserve Banks in the Federal Reserve System.
This region’s robust headquarters environment is significant for a variety of reasons. It helps drive
company innovation, growth and decision-making throughout the globe. Its strong multiplier
effect spurs and sustains a high level of economic activity throughout the region. And it provides
high-wage jobs that reward educational attainment and create opportunities for advancement,
attracting a pool of top-rated talent. Companies located in Northeast Ohio embrace our
headquarters strength as a true business advantage.
NEO HEADQUARTERS EMPLOYMENT SHARE IS SECOND-HIGHEST AMONG MAJOR METROSNortheast Ohio has the second-heaviest concentration of headquarters employment among the 20 largest metros in the U.S., with 68% more than the U.S. average. Proportionately, the region outpaces much larger markets, including Chicago, Atlanta and New York.
Source: Emsi
KEYOur Location Quotient (LQ) compares Northeast Ohio to the 20 largest U.S. metros on the
basis of headquarters employment. An LQ of 1.0 represents the average for the U.S. as a
whole. An LQ of 1.5 represents a 50% higher concentration of employment in any market
relative to the U.S., while an LQ of 0.5 is 50% lower. LQs above 1.0 generally represent sectors
that are exporting goods or services from a region.
Highest Concentration of Headquarters Employment in the Top 20 U.S. Metros
3.00
2.50
2.0
1.50
1.00
0.50
0.00
NEODetro
it
San Francisc
o
Philadelphia
Denver
Tampa
Atlanta
Boston
Chicago
New York
SeattleDalla
s
Houston
Los A
ngeles
Phoenix
Washington DC
Miami
Baltimore
Riversi
de
20
17 L
oc
ati
on
Qu
oti
en
t
Minneapolis
“ It is an exciting time in the digital commerce industry with tremendous opportunity for growth and innovation. We founded the company in Mentor more than a decade ago, and we look forward to continuing to be an important part of the community.” - Mike Keresman, Founder, Chairman, President and CEO, CardinalCommerce
8,000 NEW JOBS PROJECTED BY 2027Professional services and headquarters employment is also projected to grow another 8,000 jobs in the next decade, with marked increases expected for insurance and employee benefit funds (38%), specialized design services (27%), real estate-related activities (21%), computer systems design and related services (19%), and management, scientific and technical consulting services (18%).
Source: Emsi
Projected Growth in Professional Services and Headquarters Employment: 2017 - 2027
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
+5%
+4%
+3%
+2%
+1%
1.00
-1%
15% EMPLOYMENT GROWTH 2001 - 2017Northeast Ohio professional services and headquarters employment has grown steadily, from 162,000 workers in 2001 to nearly 187,000 in 2017, representing 15% growth. For example, growth has been remarkable in the area of company management, where employment has nearly doubled (93% growth) as companies recognize the advantages of Northeast Ohio’s supportive business environment. Other segments experiencing notable increases include real estate-related activities (76%); scientific research and development services (44%); management, scientific and technical consulting services (42%); computer systems design and related services (40%); agencies, brokerages and other insurance-related activities (29%); and specialized design services (22%).
Source: Emsi
Professional Services and Headquarters Employment Northeast Ohio: 2001 – 2017
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
+20%
+15%
+10%
+5%
1.00
-5%
-10%
“ Providing mission-critical healthcare services both domestically and internationally, we were attracted to Cleveland because of the strong labor pool, low cost of living and central geographic location.” - Michael Petras, CEO, Sotera Health
(formerly Sterigenics International)
1.00 = 2001 EMPLOYMENT
1.00 = 2017 EMPLOYMENT
PROFESSIONAL SERVICES SUBSECTORS SUPPORT THE BUSINESS COMMUNITYNortheast Ohio’s professional services segment encompasses a broad range of expertise — insurance, technology, legal, financial, real estate and more — that supports and strengthens companies here. Headquarters operations continue to thrive in this supportive environment, even in manufacturing, where the region and nation have experienced declines. Manufacturing companies see great value in locating their headquarters in Northeast Ohio.
Source: Emsi
Largest Sub-sectors of Professional Services in Northeast Ohio: 2017
50,00040,00030,00020,00010,0000
Lessors of Real Estate
Activities Related to Real Estate
Management, Scientific andTechnical Consulting Services
Architectural, Engineering and Related Services
Accounting, Tax Preparation, Bookkeeping and Payroll Services
Agencies, Brokerages and Other Insurance Related Activities
Computer Systems Design and Related Services
Insurance Carriers
Headquarters
Legal Services
IT Related Employment in Northeast Ohio: 2017
10,0008,0006,0004,0002,0000
Operations Research Analysts
Software Developers, Systems Software
Computer Network Architects
Computer Programmers
Computer Occupations, All Others
Network and Computer Systems Administrators
Computer User Support Specialists
Computer Systems Analysts
Software Developers, Applications
Computer Network Support Specialists
12,000
Average Earnings per Job by Sector in Northeast Ohio: 2017
$100,000$80,000$60,000$40,000$20,000$0
Construction
Manufacturing
Government
Wholesale Trade
Information
Mining, Quarrying, and Oil and Gas Extraction
Finance and Insurance
Headquarters
Utilities
Professional, Scientific and Technical Services
$120,000 $140,000 $160,000
HEADQUARTERS AND PROFESSIONAL SERVICES EARNINGS YIELD ECONOMIC GROWTHThere is a correlation between education attainment and economic growth. Occupations in headquarters and professional services are likely to require an advanced degree, translating into higher wages. For example, head-quarters occupations yield more than $121,000 average earnings while professional, scientific and technical services average $82,000. This is much higher than the regional average earning of $69,024.
Source: Emsi
TECHNOLOGY EMPLOYMENT CONTINUES TO GROWNortheast Ohio boasts a robust network of technology professionals, from software developers and computer systems analysts to support specialists and database administrators. Demand for technology expertise is growing in headquarters operations across industry segments throughout the region, offering these talented professionals outstanding employment opportunities.
Source: Emsi
DEVELOPMENT ACTIVITYBelow is a sampling of recent development projects in Northeast Ohio in the professional services and headquarters segment:
MCPc ADDS 150 POSITIONS, GROWING EMPLOYMENT TO 350MCPc, a growing technology company that works with banks, healthcare providers and other businesses, was looking to expand its operations in two different areas of the company. After considering other locations where it has operations, MCPc chose to expand its cybersecurity operation in Northeast Ohio. The expansion will add 150 positions.
PROGRESSIVE CASUALTY INSURANCE RENEWS COMMITMENT TO NORTHEAST OHIOProgressive, the nation’s fourth-largest auto insurer and a leading seller of other insurance products, has called Northeast Ohio home for 80 years and continues to grow here. In 2017, the company added 900 jobs to its 10,000-employee base and cited a business-friendly environment with a pool of qualified talent as the reason for expanding here. The company opened a 9,000-square-foot building to accommodate the new headquarters.
STERIGENICS U.S. RELOCATES HEADQUARTERS TO NORTHEAST OHIOIn November 2016, Sterigenics, a leading global provider of contract sterilization and lab services for the medical device industry, relocated its global headquarters from suburban Chicago to Broadview Heights, Ohio, bringing 30 key positions to the region.
LUBRIZOL CONTINUES TO GROW Lubrizol Advanced Materials, a leading global producer of advanced specialty polymers, polymer-based additives and chemical additives used in everyday consumer and industrial applications, has been rooted in Wickliffe since 1931. It continues to grow at this headquarter location, as well as operations facilities throughout Northeast Ohio. In late 2017, Lubrizol celebrated the opening of a new warehouse and packing building in Painesville Township.
CARDINALCOMMERCE BRINGS MORE HIGH-TECH JOBS TO THE REGION One of Ohio’s largest fintech employers and a leader in the e-commerce software industry, CardinalCommerce was growing rapidly and needed to expand. In November 2016,
this leader in digital commerce authentication constructed a new facility, doubling its original footprint and allowing for continued growth and additional high-tech jobs at the global headquarters in Mentor.
HYLAND SOFTWARE EXPANDS R&D CENTERHyland Software, creator of enterprise content management (ECM) software solution OnBase, was founded in 1991 and located its corporate world headquarters in Westlake. The company has become one of the largest independent ECM vendors in the world. Hyland has confirmed its commitment to Northeast Ohio in 2018 with the opening of a 70,000-square-foot addition to its research and development center, allowing for up to 400 more employees and a modern training center for internal and external events. The company boasts more than 2,200 employees globally with about 1,600 at Hyland world headquarters.
DISCOUNT DRUG MART CONTINUES TO THRIVE IN NORTHEAST OHIOOhio-based drug store chain Discount Drug Mart Inc. opened its first store in Elyria, Ohio, in 1969. It now operates 71 stores in more than 20 of Ohio’s 88 counties, with its corporate headquarters and warehouse based in Medina, Ohio. This month the company celebrated the opening of a fulfillment and call center, adding 62 new full-time positions in Avon Lake, further cementing the company’s commitment to the region.
“ Progressive has called Northeast Ohio home for 80 years. We know it’s a great place to live, work and play, and we’re pleased to be adding jobs here. We are committed to attracting and developing the top talent in this area to help us meet our goal of becoming the No. 1 choice and destination for auto and other insurance.” - Lori Niederst, Chief Human Resources Officer, Progressive
NEO STRATEGIC UPDATE:
Employment, Gross Regional Product, Per Capita Income, Productivity
In 2013, the philanthropic and business leadership in the region undertook a strategic planning process to understand Northeast Ohio’s competitiveness with the overall U.S. economy as it relates to four important measures, labeled aspirational metrics: Employment, Gross Regional Product, Per Capita Income and Productivity.
In our previous report, we announced that we would use this Economic Review as a mechanism to continue to track our progress against the regional strategy, featuring one of the four metrics each quarter. For this edition, we are looking at gross regional product, an area of the economy where Northeast Ohio’s performance relative to the U.S. has been better than planned. Looking back to 2013, the starting point of the strategy, the projection was to be at 50% of U.S. growth during the first five years of the strategy. Northeast Ohio’s gross regional product has grown 6% — below the U.S. rate of 9% but exceeding the projected 50%.
The region’s overall slower performance can be attributed in large part to the fact that, although we continue to have a disproportionately strong footprint in manufacturing (which has led to tremendous productivity increases over time), we have not seen enough diversification in non-healthcare-related sectors of the economy to drive growth in gross product. In particular, Northeast Ohio has lagged U.S. growth rates as they relate to finance, information, and professional, scientific and technical services (though as this report shows, we are catching up in the latter).
Gross regional product is an important signal of economic growth, as it measures the final market value of all goods and services produced in the region over the course of a year. It is a key measure of economic prosperity.
Change in Gross Productivity: NEO vs U.S., 2013 - 2017
U.S. NEO
2013 2014 2015 2016 2017
+12%
+10%
+8%
+6%
+4%
+2%
1.0
-2%
-4%
-6%
Gross regional product is an important signal of economic growth
1.00 = 2013 GROSS REGIONAL PRODUCT
US
OHIO
NEO
TOTAL EMPLOYMENT GROWS YEAR-OVER-YEARTotal employment averaged 1.938 million workers in Q4 2017, up more than 3,300 jobs year-over-year.
Source: Quarterly Census of Employment and Wages (QCEW). This is the most current reliable data available for total jobs in Northeast Ohio.
CONSTRUCTION SECTOR SEES YEAR-OVER-YEAR GROWTHThe construction sector added more than 3,200 jobs year-over-year in Q4, exceeding 72,000 workers. The manufacturing sector added just over 1,000 jobs, while the services remained relatively flat.
Source: Quarterly Census of Employment and Wages (QCEW). This is the most current, reliable data available for total jobs in Northeast Ohio.
TOTA
L EM
PLO
YM
ENT
IN M
ILLI
ON
S
1.90
1.95
2.00
2.05
1.85
1.80
1.75
1.70
1.65
Q1 Q4
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Q2
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Q3
2015
2016
2014
2007
2008
2009
2010
2011
2012
2013
-40%
-30%
-20%
-10%
0
+10%
MANUFACTURING SERVICES CONSTRUCTION
CHANGE IN EMPLOYMENT BY SECTOR THROUGH DECEMBER 2017
NORTHEAST OHIO UNEMPLOYMENT RATES THROUGH DECEMBER 2017
2008
2007
2009
2010
2011
2012
2013
2014
2015
2017
2016
0 = 2007 AVERAGE
Q1
07Q
2 07
Q3
07Q
4 07
Q1
08Q
2 08
Q3
08Q
4 08
Q1
09Q
2 09
Q3
09Q
4 09
Q1
10Q
2 10
Q3
10Q
4 10
Q1
11
Q1
12Q
2 12
Q2
11Q
3 11
Q4
11
Q3
12Q
4 12
Q1
13Q
2 13
Q3
13Q
4 13
Q1
14
Q1
15Q
2 15
Q3
15Q
4 15
Q1
16
Q2
14Q
3 14
Q4
14
SERVICES
CONSTRUCTION
MANUFACTURING
Q2
16Q
3 16
Q4
16Q
1 17
Q3
17Q
2 17
Q4
17
Q1
09
NEO OHIO US
12%
11%
10%
9%
8%
6%
4%
Q1
07Q
2 07
Q3
07Q
4 07
Q1
08Q
2 08
Q3
08Q
4 08
Q2
09Q
3 09
Q4
09Q
1 10
Q2
10Q
3 10
Q4
10Q
1 11
Q1
12Q
2 12
Q2
11Q
3 11
Q4
11
Q3
12Q
4 12
Q1
13Q
2 13
Q3
13Q
4 13
Q1
14Q
2 14
Q3
14Q
4 14
7%
5%
Q1
15Q
2 15
Q3
15Q
4 15
Q1
16Q
2 16
Q4
16Q
3 16
Q1
17Q
2 17
Q3
17
NEO YEAR-OVER-YEAR UNEMPLOYMENT RATE SEES SLIGHT DECREASEThe unemployment rate for Northeast Ohio averaged 4.8% in Q4 2017, down from 5.1% for the same quarter in 2016. The state of Ohio averaged 4.4%, while the U.S. averaged 3.9%.
Source: Current Population Survey (CPS), a survey of 60,000 households nationwide.
NORTHEAST OHIO TOTAL EMPLOYMENT (NOT SEASONALLY ADJUSTED)
2017
OHIO UTICA WELL ACTIVITY (NON-CUMULATIVE)
GRP PROJECTED TO REACH $236 BILLIONNortheast Ohio’s GRP is projected to grow 2.7% in 2017, as set forth by Moody’s Economy.com. Source: Moody’s Economy.com
INDUSTRIAL AND OFFICE VACANCY CONTINUE TO TREND DOWNIn Q4 2017, the vacancy rate for industrial space is at 4.2% — its lowest rate since Team NEO began tracking in Q1 2008 — while the vacancy rate for office space is at 7.9%. More than 567 million square fee of industrial space and 160 million square feet of office space is available.
Source: CoStar
OHIO UTICA WELL ACTIVITY (NONCUMULATIVE)This graph shows the status of Utica shale wells originally permitted, drilled and in production for each quarter. Since Q4 2012, when tracking began, 2,651 total permits have been issued, of which 1,805 have been drilled. Of those drilled, 1,030 are currently in production in the state.
Source: Ohio Department of Natural Resources
OFFICE INDUSTRIAL
10%
11%
9%
8%
7%
VAC
AN
CY
RA
TE
6%
5%
4%
Q1
08
Q2
16Q
3 16
Q4
16Q
1 17
Q2
17Q
3 17
Q4
17Q
1 18
Q2
18
Q2
08Q
3 08
Q4
08Q
1 09
Q2
09Q
3 09
Q4
09Q
1 10
Q2
10Q
3 10
Q4
10Q
1 11
Q2
11Q
3 11
Q4
11Q
1 12
Q2
12Q
3 12
Q4
12Q
1 13
Q2
13Q
3 13
Q4
13
Q3
14
Q1
14
Q4
14Q
1 15
Q2
15Q
3 15
Q4
15Q
1 16
Q2
14
NEO
REA
L G
RP
IN B
ILLI
ON
S
AVERAGE ANNUAL GROWTH = 1%REAL GRP
$150
$170
$190
$210
$230
$250
$130
1994
1995
1996
3.0%
1997
4.4%
4.0%1.6% 1.3%
-2.0%1.4%
2.1%
2.4% 0.6% -0.8%-0.4%
1998
1999
2000
2002
2003
2004
2010
2011
2001
2006
201
2
2007
2009
201
3
201
4
201
5
201
6
201
7
2005
-1.5%
3.0%
3.3% 1.4% 0.7% 2.2% 0.5%0.9%
2008
3.3%
-5.3%
2.7%
0
DRILLEDPERMITTED PRODUCING WELLS
250 1200
0
200
150
100
50
PER
MIT
TED
/DR
ILLE
D W
ELLS
(N
ON
-CU
MU
LATI
VE)
PRO
DU
CIN
G W
ELLS
(C
UM
ULA
TIV
E)
800
1000
600
400
200
Q4
12
Q1
13
Q2
13
Q3
13
Q4
13
Q1
14
Q2
14
Q3
14
Q4
14
Q1
15
Q2
15
Q3
15
Q4
15
Q1
16
Q2
16
Q3
16
Q4
16
Q1
17
Q2
17
Q3
17
Q41
7
Q1
18
NORTHEAST OHIO INDUSTRIAL AND OFFICE VACANCY
NEO REAL GROSS REGIONAL PRODUCT (GRP) IN BILLIONS
Q2
18
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.
SPECIAL THANKS FROM TEAM NEO TO OUR FUNDERS
DATA SOURCES ECONOMIC DEVELOPMENT PARTNERS ACROSS 18 COUNTIES OF NORTHEAST OHIO
Ashland Area Economic Development
Columbiana County Port Authority
Erie County Economic Development Corporation
Geauga Growth Partnership, Inc.
Greater Akron Chamber
Greater Cleveland Partnership
Growth Partnership for Ashtabula County
Huron County Development Council
Lake County Ohio Port & Economic Development Authority
Medina County Economic Development Corporation
Portage Development Board
Richland Community Development Group
Stark Economic Development Board, Inc.
Tuscarawas County Community Improvement Corporation
Youngstown/Warren Regional Chamber
Wayne Economic Development Council
For a complete list of funders, visit clevelandplus.com/teamneo/invest-in-us/funders.
Team NEO is an economic development organization focused on creating jobs for Northeast Ohio’s residents. In collaboration with our partners, it leads the region’s business attraction efforts, supports business retention and expansion work as Northeast Ohio’s JobsOhio affiliate, accelerates the impact of innovation in the region, and aligns strategies and resources within the economic development network to maximize its impact. In addition, Team NEO provides tools to assist employers in attracting talent to the region.
The Northeast Ohio economic development network provides business decision-makers with access to customized solutions that accelerate growth, foster innovation and mitigate risk through a connected and collaborative ecosystem. For more information, visit clevelandplus.com.
ABOUT TEAM NEO AND THE CLEVELAND PLUS 18-COUNTY REGION CONNECT WITH US
AshtabulaLake
Geauga
Portage
Stark
Wayne
SummitMedina
Cuyahoga
Lorain
Ashland
AKRON
CANTON
YOUNGSTOWN
Richland
Huron
Erie
Tuscarawas
Trumbull
Mahoning
Columbiana
CLEVELANDLORAIN
MANSFIELD
Economic Development Board