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

jrobey@teamneo.org

216-363-5420

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