CoreNet GlobalReal Estate CEU Course
Jim Robey, PhDTeam NEO
Regional Economic Development
Who is Team NEO?
Team NEO: The Region’s Sales Force
Generate Business Attraction
Opportunities
Executewith State and
Communities to Close Deals
Promote Regional Teamwork
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Team NEO’s Strategic Focus
Team NEO advances Northeast Ohio's economy by attracting businesses worldwide to the 16-county Cleveland Plus region.
Team NEO’s Mission
NEO Regional Economic Development System
What Are the Economic Gurus Saying for 2011?
What the Gurus say for GDP in 2011, or who is zooming who?
• RSQE/Michigan: 2.1% (2.9 in 2012)• Kleinhenz and Associates: 2.9%• FRB Philadelphia (% of forecasters)
– Negative growth: 3.9%– 0 to .9% 4.3%– 1.0 to 1.9% 12.2%– 2.0 to 2.9% 32.4%– 3.0 to 3.9% 28.3% 79.4%– >= 4.0% 18.7%
Other Forecast Factors (US)• Inflation: 1.4% (‘11)—some energy basis• Real Disposable Income:
– 2011: 1.5%– 2012: 1.7%
• Light Vehicle Sales: returning markets– Annualized 2002 to 2007: ~17 million– 2009: 10.4 million (actual)– 2010: 11.5 million– 2011: 12.7 million– 2012: 14.8 million
• T-bills: cheap money– 2011: .1%– 2012: .2%
Optimism in Place?
Source: Kleinhenz and Associates
News of the Week
• Precision Metal Forming Association: 15% of members have staff on layoff versus 85% in April 2009 (Crains)
• NEOSA CIO Survey for 2011 (www.NEOSA.org)
– 55% expect budget increases
– 53% expect compensation to increase (44% no change)
– 49% expect to increase head count
• 3rd Quarter GDP growth (annualized) is estimated at 2.5%
• October Statistics
– US existing home sales: 4.43 million
– US new home sales 283k (under expectations)
– Durable goods orders: -3.3
– All factory orders: -.9%
– Construction spending: .7% (consensus was -.4)
More Recent News
• November Statistics– Michigan Consumer Sentiment: 71.6 (up)– Consumer Confidence: 54.1 (up and above consensus)– US employment growth 39k (138k expected)
• FOMC (economy.com) :– Fed funds rate: 00-.25 for “an extended period” – Low risk of inflation
• Moody’s Survey of Business:– Global business in “funk”– Weak expect but continued growth
11Source: Moody’s Analytics
Cleveland Plus Tracking Close to U.S. Rate
Source: Ohio LMI
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A Slight Up Tick:Manufacturing Employment
Source: BLS
Access to Light Vehicles: 12+ Million
United Airlines CEO Smisek says Cleveland must 'earn its hub status every day‘
Crains: 11-10-10
Capital: Balancing the Costs for Energy
Advanced Energy Portfolio Standard
• At least 25% of supply for each Ohio utility must come from “advanced energy” sources by 2025– At least ½ (12.5%) from renewable– At least ½ from inside Ohio
• Requirements begin at end of 2009, ramp-up to 2025
• Alternative compliance payment if utilities fail to comply
What is Advanced Energy?
• Wind• Solar• Storage• Smart Grid• Nukes• Biomass• E Transportation• Energy Efficiency• Clean Coal (carbon sequestration) • Fuel Cells
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Capacity Utilization in US
End
Source: CoStar
24 Source: CoStar
A Good Overbuilt Transportation Infrastructure
Source: US Census Bureau
US Forecast for Holiday Sales
• National Retail Federation– 2010
• Up 2.3% from 2009• Forecast at $447.1 Billion• 25 to 40% of all sales for some retailers are in this
period
– 2009• Up .4% over 2008• Total retail last Holiday season $437 Billion
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For the State of Ohio
Source: US Census, Current Population Survey
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Need to Ramp Up: Population 25+ Educational Attainment
CLE MSA Raw
CLE MSA Share US Share
Less than 12th grade
236,871 16.7% 15.5%
High School Grad
450,977 31.8% 29.6%
Some College/Associates
389,302 27.5% 27.5%
Bachelors or Higher
340,462 24.0% 27.4%
Source: Claritas
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Organizations that Budget for Education and Training
NMean Percentage
of Annual Compensation Budget Range133 3.69% 1-25%
Trends in the Budget for Education and TrainingOver the Last Three Years
Response Frequency PercentStayed the same 133 31.52%Increased over the last 3 years 57 13.51%Decreased over the last 3 years 51 12.09%Did not respond 181 42.89%Total 422 100.00%
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Participants’ Ranking of Challenges to Making New EmployeesSuccessful Over Time –
Frequency of Participants Who Ranked Each Challenge as Their Most Commonly Experienced
Challenge FrequencyAbility to learn (e.g., acquiring the right skills and experience for the job)
109
Attendance/showing up ready to work on time 48
Willingness to learn new skills 39Behavioral issues (e.g., attitude, employee conflicts, substance abuse)
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Attrition due to workers moving on to another employer 17
Organized labor requirements 16
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Frequency of the Usage of Various Methods of Recruitment by Type of Position
Recruitment Methods
Type of Position
Entry Non-Entry
Newspaper 144 137
Temporary agency 121 89
Employee referral 175 159
Internet 148 173
Promotions 104 186
Other 50 42
Of 422 responses
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29 colleges and universities
nourish talent pool• 175,000 students• 26,000 BA/BS
degrees awarded annually
Labor Pool: Broad & Deep
Ned Hill: The Competitive Advantage of Northeast Ohio
•Required areas of product improvement•Education & workforce (incumbent workers)•Entrepreneurial management•Workplace flexibility
•Areas of demonstrated competitive competence•Headquarters, insurance, banking & health care•Materials production/fabrication•Chemistry•Industrial design•Secondarily: logistics
What We are Working On71 Active Leads
18 Advanced Energy Opportunities14 Manufacturing Facilities
17 Bioscience Opportunities5 Manufacturing Facilities
Potential Investment:Jobs: 10,420Payroll: $265,355,645Capital Investment: $1,549,854,268
Factors Affecting Decisions
• Energy Costs– Oil/Diesel: Deepwater Drilling?– Marcellous Shale: 50 Trillion FT3 potentially
recoverable
• Currency: is the US a good investment?– Near par with Canada– Weakening against the Euro (closer to low than
high)– Losing strength against Pound– Weakening against Yen
Additional Factors
• Mid Term Elections– Federal: control of House and Senate– Ohio: Governor and Senate
• Affecting:– State Deficit: estimated as high as $8.8 billion– Health Care– Tax Structure– Spending – Policies
Thank you.Comments or Questions?
Jim Robey, PhD
VP for Research
Team NEO
www.clevelandplusbusiness.com
216-363-5420
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