Transcript NEO Horizons: A Look Forward

CoreNet Global
Real Estate CEU Course
Jim Robey, PhD
Team NEO
Regional Economic Development
Who is Team NEO?
Team NEO: The Region’s Sales Force
Team NEO’s Mission
Team NEO advances Northeast Ohio's economy by attracting
businesses worldwide to the 16-county Cleveland Plus region.
Team NEO’s Strategic Focus
Generate
Business
Attraction
Opportunities
Execute
with State and
Communities to
Close Deals
Promote Regional
Teamwork
3
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%
-20
Mar-10
Nov-09
Jul-09
Mar-09
Nov-08
75
Source: Kleinhenz and Associates
NFIB Index
80
Jul-08
0
Mar-08
85
Nov-07
20
Jul-07
90
Mar-07
40
Nov-06
95
Jul-06
60
Mar-06
100
Nov-05
80
Jul-05
105
Mar-05
100
Nov-04
110
Jul-04
120
Mar-04
CEO Index
Optimism in Place?
CEO Economic Outlook
Index
NFIB Small Business
Optimism Index
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
11
Source:
Moody’s Analytics
Cleveland Plus
Tracking Close to U.S. Rate
Unemployment Rates Through October 2010
13.00%
12.00%
11.00%
10.00%
9.00%
8.00%
NEO
Ohio
U.S.
7.00%
6.00%
5.00%
4.00%
Source: Ohio LMI
14
2007 Average
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
A Slight Up Tick:
Manufacturing Employment
Cleveland+ Change in Manufacturing Employment
270,000
260,000
250,000
240,000
230,000
220,000
210,000
200,000
190,000
180,000
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
21
2010-07
2010-04
2010-01
2009-10
2009-07
2009-04
2009-01
2008-10
2008-07
2008-04
2008-01
2007-10
2007-07
2007-04
2007-01
2006-10
2006-07
2006-04
2006-01
2005-10
2005-07
2005-04
2005-01
2004-10
2004-07
2004-04
2004-01
2003-10
2003-07
2003-04
2003-01
2002-10
2002-07
2002-04
2002-01
2001-10
2001-07
2001-04
2001-01
Capacity Utilization in US
90
Beginning
85
80
End
75
70
65
60
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
26
For the State of Ohio
Unemployment Rate by Educational Attainment in the State of
Ohio: 2010
Bachelor's degree or higher
Some college, less than 4-yr
degree
High school or equivalent
No high school diploma
0.0%
Source: US Census, Current Population Survey
5.0%
10.0%
15.0%
20.0%
25.0%
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
29
Organizations that Budget for Education and Training
N
133
Mean Percentage
of Annual Compensation Budget
3.69%
Range
1-25%
Trends in the Budget for Education and Training
Over the Last Three Years
Response
Stayed the same
Increased over the last 3 years
Decreased over the last 3 years
Did not respond
Total
30
Frequency
133
57
51
181
422
Percent
31.52%
13.51%
12.09%
42.89%
100.00%
Participants’ Ranking of Challenges to Making New Employees
Successful Over Time –
Frequency of Participants Who Ranked Each Challenge
as Their Most Commonly Experienced
Challenge
Frequency
Ability to learn (e.g., acquiring the right skills and experience for
109
the job)
48
Attendance/showing up ready to work on time
39
Willingness to learn new skills
Behavioral issues (e.g., attitude, employee conflicts, substance
30
abuse)
Attrition due to workers moving on to another employer
17
Organized labor requirements
16
31
Frequency of the Usage of Various Methods of Recruitment by Type
of Position
Type of Position
Recruitment Methods
Non-Entry
Newspaper
144
137
Temporary agency
121
89
Employee referral
175
159
Internet
148
173
Promotions
104
186
50
42
Other
Of 422 responses
32
Entry
Labor Pool: Broad & Deep
29 colleges and
universities
nourish talent pool
• 175,000 students
• 26,000 BA/BS
degrees awarded
annually
33
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 On
71 Active Leads
18 Advanced Energy Opportunities
14 Manufacturing Facilities
17 Bioscience Opportunities
5 Manufacturing Facilities
Potential Investment:
Jobs: 10,420
Payroll: $265,355,645
Capital 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
[email protected]
216-363-5420
38