Thursday, March 7, 2019

Manufacturers and Suburbs Winning it For Ohio, Again!

Site Selection magazine's coveted Governor's Cup was one state away for Ohio again this year.  For the fifth straight year, Ohio came out in the top of the race among the states for economic development prowess.

Second place is a really good place to be if you can't be number one.

Ohio's good showing is, for longer than five years in a row, the result of manufacturing projects and suburban/exurban projects carrying more than their fair share.   That's clear.

Here's some key metrics from my annual analysis of the "Ohio Private Investment Survey," the tool Ohio's development agency uses to report to Site Selection on projects meeting the magazine's project criteria.

  •  97% of Ohio's manufacturing project wins were from Ohio's 'burbs.  That's an all-time high.
  •  78% of all Ohio projects were from Ohio's less urban counties.  That's also an all-time high.
  • 55% of all Ohio projects were from the manufacturing sector.  That's up again in 2018.
  • 94% of Ohio's mega projects (greater than $50 million) were also from the 'burbs.
  • 100% of Ohio's mega manufacturing projects were from Ohio's smaller communities.

It sure makes the case for why Ohio is fortunate to have a breadth of investment-attracting local communities not dominated by just a handful of higher-profile places.  Policies that strengthen more communities' ability to compete globally are critical to Ohio's future success.

The data makes this point very clearly:  Ohio Governor Mike DeWine and his Administration, especially JobsOhio, needs to embrace manufacturing as well as embrace suburban, exurban, and rural areas for the key role they play in Ohio's development success.  Winning job-creating projects depends on it.


More background
This analysis comes from eleven years of reviewing the data that has been used to rank Ohio.  The trends remain consistent.  

Let's start with what makes the list.  Site Selection magazine counts announcements of manufacturing, distribution, headquarters, and R&D projects that meet at least one of three criteria:
  • investment of $1 million or more
  • square footage of 20,000  sq. ft. or more
  • job creation of 20 or more
The 2018 version of the Ohio Private Investment Survey was recently published.  It shares the list of projects Ohio's Development Services Agency used to self-report to the magazine.  Ohio submitted 434 projects fitting the magazine's criteria.

Check it out yourself.  This analysis is easily reproduced.

Ohio reports 55% (238 of the 434) classified as manufacturing projects.

The list shows Cleveland, Columbus, and Cincinnati combined for seven of the 238 manufacturing projects in the state.  That means 97.1% came from outside of Ohio's three largest cities--a record.

Ohio's suburbs, exurbs, and rural areas have averaged 94% of manufacturing projects over eight years.  The number has never been lower than 89%.

Eight years of data shows how that pace has played out since 2011 when this analysis was first performed:

2018: 97%
2017: 94%
2016: 95%
2015: 89%
2014: 95%
2013: 94%
2012: 94%
2011: 94%

Ohio's smaller counties brought 78% of all overall development projects to Ohio.  That's up from last year and higher than any of the last 11 years.

Of the total 434 total projects, 338 occurred outside of Ohio's three largest counties--Cuyahoga, Franklin, and Hamilton.  That's 77.9% of the overall projects--a record.

Eleven years of data show, consistently, that Ohio's success it owed to it's less urban counties.

2018: 78%
2017: 69%
2016: 66%
2015: 70%
2014: 74%
2013: 72%
2012: 74%
2011: 68%
2010: 71%
2009: 73%
2008: 74%

Ohio's DSA report indicates 28 projects achieved $50 million or more in capital investment.  One of those was in Columbus, so 27 of 28 came from outside of the 3C's.  14 of these mega projects were in the manufacturing sector.  All 14 were from Ohio's smaller communities.

Bottom Line:  This report shows the reason to care about what happens in all of Ohio and shows that Ohio is more than just three or six places of focus.  The reason to reach the places that have been left behind is because Ohio's success is broad and wide and can be broader and wider.  Let's get better.

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