Manufacturing is the largest sector of Northeast Ohio’s gross regional product (GRP), and is projected to remain the largest sector as the region transitions from traditional manufacturing sectors to advanced manufacturing sectors, reports the quarterly Cleveland Plus Economic Review released today by Team NEO.
“Our manufacturing economy continues to transition as companies leverage automation and technology to maintain global competitiveness,” said William Koehler, CEO of Team NEO. “While declining as a percent of the total economy, manufacturing is playing a much larger role in higher value growth sectors and overall productivity is outpacing national averages.”
The Northeast Ohio economy is more balanced today as manufacturing accounts for 20 percent of the total GRP versus 40 percent in 1970. As a result, the economy is less sensitive to economic cycles that have created significant challenges for the region in past recessions. Northeast Ohio produces more products today than 25 years ago and continues to see a surge in export activity, which has increased 16 percent since 2006. Projections through 2025 indicate continued increases in productivity, providing greater opportunities across our region that will ensure Northeast Ohio companies maintain their global competitiveness.
“If the last 20 years was characterized by lowering costs through process improvements to compete overseas, the next decade will be focused on adopting new technologies that both lower costs and create competitive advantages to products and customer service,” said Ethan Karp, CEO and President of MAGNET, the Manufacturing Advocacy and Growth Network that works hand-in-hand with thousands of small and medium manufacturers across Northeast Ohio as they look to grow and expand.
Statistics from the Team NEO report include:
- Manufacturing is A Strong Traded Sector
- In 1970, manufacturing accounted for 58% of the top 10 traded sectors.
- Today, the top 10 traded sectors look similar to the U.S., although manufacturing still leads the pack with 26% of traded sectors in NEO, compared to the U.S. at 18%.
- Manufacturing Employment Base is Diversifying
- Looking back to 1970, we see a shift from traditional manufacturing sectors such as iron, steel mills and foundries, to advanced manufacturing sectors, including higher value-add products, such as plastics, and machine shops making more precise products.
- Productivity Continues to Climb
- From 1990 to 2015 manufacturing productivity in NEO increased 92%.
- It is anticipated to increase another 73% by 2025.
- High-Value Sectors Projected to Grow in Next Decade
- Computer and peripheral equipment manufacturing is anticipated to grow 104%.
- Semiconductor and other electronic component manufacturing is predicated to grow 89%.
In addition, most of the economic indicators tracked in the report are trending upward year-over-year:
- Total Employment Reaches 1.935 Million
- Up 15,000 jobs year-over-year
- NEO Unemployment Rate Decreases Year-over-Year
- The Northeast Ohio unemployment rate averaged 4.5% in Q4 2015, a decrease from 5.1% in Q4 2014.
- Services Sector Sees Year-Over-Year Growth
- The services sector is up about 12,150 jobs from Q4 2014 to Q4 4015.
- Ohio Utica Well Production Slows in Q2 2016
- From Q1 2016 to Q2 2016, 67 new permits were issued and 41 new wells drilled.
Team NEO publishes the Cleveland Plus Economic Review quarterly to provide a holistic picture of Northeast Ohio’s economy. It is the only regular source of collective economic data for the 18-county region. The nonprofit organization uses the information to attract new businesses and jobs to Northeast Ohio and help those that are here grow.
Team NEO uses Moody’s Economy.com and U.S. Bureau of Labor Statistics data and Ohio’s Labor Marketing Information to aggregate regional figures.
About Team NEO
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. For more information, visit www.teamneo.org and www.clevelandplusbusiness.com.