Northeast Ohio

Kusama “Infinity Mirrors” and FRONT International helped art museum break attendance, membership records

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CLEVELAND, Ohio – Attendance boosted by the popular Yayoi Kusama “Infinity Mirrors” exhibition and the FRONT International: Cleveland Triennial for Contemporary Art this year helped the Cleveland Museum of Art break a 26-year record for the number of visitors attracted in any single summer.

Between July 1 and September 30, the museum said it attracted 305,692 visitors, the largest summer total in the institution’s 102-year history, and the largest since the same period in 1992, when the exhibition “Egypt’s Dazzling Sun: Amenhotep III,” helped the museum pull in 290,000 visitors.

Visitors this summer came from all 50 states and 23 foreign countries, generating $6.9 million in museum revenues, including $2.3 million in new memberships, the museum announced Thursday.

“We were really thrilled to see so many people come from so far away as well as close to home to celebrate the summer with us,” said Elizabeth Bolander, director of audience insights and services at the museum, who described the new information in an interview Wednesday.

The Amenhotep exhibition, organized to celebrate the museum’s 75thanniversary, drew 186,139 visitors, far more than the 120,000 attendees for the Kusama show, which surveyed the artist’s 65-year career.

The museum had to limit the number of attendees for “Infinity Mirrors,” which involved circulating small numbers of viewers in and out of specially constructed mirror rooms in 30-second shifts.

But with FRONT and other exhibitions and a full calendar of events and programs, the museum cruised past its 1992 summer attendance record.

The museum reported that it topped 30,000 memberships this summer for the first time in its history, exceeding the total of 29,491 membership households reached on June 30, 2016, the middle of the museum’s centennial year.

Shows during that period included “Painting the Modern Garden: Monet to Matisse,” and “Pharaoh: King of Ancient Egypt.”

The museum said it created 120 temporary jobs to support the Kusama exhibition, and recruited 100 volunteers.

Data crunched by Cleveland economist Jack Kleinhenz show that the Kusama exhibition contributed $5.5 million in economic impact in Cuyahoga County.

The figure includes $3.2 million in direct spending by visitors from outside Cuyahoga County, plus additional sums calculated for the ripple of indirect and induced spending triggered by the new dollars flowing into the local economy. The increased spending created 58 new jobs in the county, according to the analysis.

Kleinhenz said the data were calculated from 732 visitor surveys, which represented a 33 percent response rate among those polled by the institution.

Figures extrapolated from the survey indicate that 44,522 visitors came to see the Kusama show from outside Cuyahoga County.

“It goes beyond pure economics,” Kleinhenz said of the museum’s impact on Cleveland and Northeast Ohio. “It’s such a unique brand, like the Cleveland Orchestra, the Cleveland Browns and the Cleveland Clinic.”

Bolander said the summer of 2018 helped the museum understand how its recently expanded and renovated complex could accommodate a million visitors a year – a major goal of a new strategic plan unveiled in 2017.

Attendance has averaged 630,000 in recent years. Attendance this summer – if annualized – would nearly double that number.

“It was actually very exciting this summer,” Bolander said. “We were able to test if, you will, what it meant to be at that level of attendance for a sustained period.”

By Steven Litt, The Plain Dealer

Cleveland’s economy fails to gain traction

Posted on by katiecmorgan

A better job of measuring performance is key to turning around region’s fortunes

Illustration by Daniel Zakroczemski for Crain’s

While there is some question about whether he actually said it and exactly how he said it, business thinker Peter Drucker is credited with a mantra that has wide acceptance in management circles: “You can’t improve what you don’t measure.”

Expanding on that maxim, the need to better measure the strengths and weaknesses of the Northeast Ohio economy, as a prelude to improving it, may end up being a key takeaway from Jon Pinney’s June 8 speech at the City Club of Cleveland. There, the managing partner of the Kohrman Jackson & Krantz law firm pronounced that the Northeast Ohio economy was “dead last or near the bottom in most economic metrics.”

He cited recent national media coverage, such as Forbes’ “Best Cities for Jobs”survey, which ranked Cleveland last out of 71 major metro areas, and Business Insider’s ranking of the country’s 40 best and worst regional economies, where Cleveland also placed last.

As Business Insider reported, Cleveland had the highest February 2017 unemployment rate, at 5.7%, among the 40 biggest metro areas, and its job growth was the second-lowest, with non-farm payroll employment rising just 0.3% between February 2016 and February 2017.

The struggles of the region’s economy are nothing new. Some data make that point when they are periodically announced, such as Census Bureau reports that show the region’s population decline and when the Labor Department announces the monthly unemployment rate.

Pinney was highlighting the need to pay more attention on a regular basis to those and other measurements of the region’s performance and to compare that performance to other regions. He closed his comments by making a “grand challenge” to business and civic leaders to face up to the region’s poor showing when compared to the rest of the country and find solutions to the region’s economic sluggishness.

Before that can happen, however, the region needs better data — data that have not been as readily available in Northeast Ohio as they are in some other areas.

In Columbus, for example, Columbus 2020, the region’s economic development agency, posts on its website updated monthly data on the size and composition of the regional workforce, including a graph which shows if the employed workforce is growing or declining and a pie chart of which industries employ the most people.

It’s a barebones example of what economists call an “economic dashboard.”

Greater MSP, an economic development agency in the Minneapolis-St. Paul region, goes further. Its “Regional Indicators Dashboard” tracks changes in more than 50 economic, environmental and social outcomes and how the region ranks with a peer group of regional economies. It includes everything from average weekly wages to percentage of the population with a college degree to the cost of electricity.

Don Iannone, a Highland Heights-based economic development consultant, produced a dashboard for Ashtabula County after becoming CEO of the Growth Partnership for Ashtabula County in 2014. It provided a wide variety of regularly updated information for several years covering data on employment and business formation in the county.

But because the economy was struggling, business and civic leaders weren’t always happy to see their economic difficulties on display on the internet.

“People didn’t like the bad news. They just didn’t,” he said. But to him, it was a necessary regular assessment. “I said, it’s actually like going in for a physical and the doctor gives you all the news, good and bad,” Iannone said.

In 2005, the Federal Reserve Bank of Cleveland produced an economic dashboard proposal for the Fund for Our Economic Future, a collaboration of foundations and other philanthropies that focuses on regional economic development. The goal was “to encourage and advance a common and highly focused regional economic development agenda that can lead to a long-term economic transformation of the Northeast Ohio (NEO) economy.”

The work, said one economist who worked on the project, was noble, but was overwhelmed by other priorities at the time.

“The great recession had a major influence on how we could approach this activity,” said Jack Kleinhenz, an economist now running Kleinhenz & Associates in Cleveland Heights. “In 2005, the economy started to go in the tank and everybody was preoccupied, I hate to say it, more by survival.”

That effort is being revived.

Earlier this year, the Fund for Our Economic Future released “2 Tomorrows,” a report on the challenges facing the 18-county Northeast Ohio economy. “We are not innovating and investing to the level needed to drive and sustain global competitiveness,” the report stated. “We need to change what we consider success.”

Beyond basic economic concerns, the report focused on the concentration of poverty in the region and on racial inequalities in economic outcomes and challenges to create good jobs and rising incomes across the region.

It also offers a set of measurements to track how well the region is succeeding at meeting those challenges. “What gets measured gets done,” the study argued.

“In ‘2 Tomorrows,’ we put forth what we think is an effective way to measure the economy that looks like the right things,” fund president Brad Whitehead said. “We’ll be doing it quarterly, and it’s an open question whether anyone else will salute it.”

Its measurements look beyond the basic economic metrics and create a “Growth & Opportunity Scorecard” that creates measurements for metrics such as the growth of young businesses, the effort to improve prosperity and how well economic growth is shared across all people in the region.

“We began by thinking, blank slate, what would a successful regional economy look like?” said Peter Truog, director of civic innovation and insight at the fund. He called it an effort to “look at a group of peer cities and see how we stack up.”

Team Northeast Ohio, the regional economic development nonprofit, does gather information on the region’s economy and workforce. While it issues quarterly data to news media, it uses the data primarily to encourage businesses and site selectors considering expanding in the region.

Its president, Bill Koehler, does see the need for greater sharing of the information its researchers gather and would like to see some organization, not his, take a lead role in gathering and sharing that information.

“We need a common place where (this) data resides,” Koehler said. “But even if there is a centralized place where all the data is, we still have to have a common understanding of what the right performance drivers and metrics are, and all of us have to align our strategies around that. It’s not happening enough and people are starting to recognize and challenging those of us in the economic development community to take on the responsibility of doing a better job.”

Retail decline in region is ‘a permanent shift’

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As more people do their shopping online, retailing in Northeast Ohio is changing. And while most brick-and-mortar stores are not in danger of going the way of the dinosaur, in a region where the population isn’t expanding, every online sale has a cost in the malls, in the storefronts and in jobs lost.

By more than one estimate, including by local economist Jack Kleinhenz, the chief economist for the National Retail Federation, online sales now make up 10% of retail sales. Sales, buoyed by rising prices, continue to grow modestly, though accurate regional sales figures are not available.

“The decline in store traffic is not a trend anymore. It’s a shift, a permanent shift,” said Elad Granot, dean of the Dauch College of Business and Economics at Ashland University. “So brick-and-mortar retailers have to figure out what they can offer that Amazon can’t, and it’s getting to be a shorter and shorter list.”

Granot was referring to online retailer Amazon.com‘s move into the grocery business with its purchase of Whole Foods, and its expanding role in logistics. The logistics push includes a growing fleet of cargo airplanes and its fulfillment centers, such as the ones it is building in North Randall and Euclid, on sites of former shopping malls.

Granot said some retail categories are relatively safe. He said, for example, that shopping for makeup can entail trying out different products with an in-store stylist — what he calls an experience. The categories that should be worried about Amazon, he believes, are the categories that have no experience attached to consumption.

“If I need Band-Aids, I’m not going to wait until the next time I’m at CVS, I’m going to order them on Amazon right now,” Granot said, noting that he recently was on a flight of stairs with a student who was ordering a pair of sneakers online as they walked. “CVS provides me with no experience when I shop for Band-Aids.”

According to the Ohio Department of Jobs and Family Services, the retail trade in the seven-county Cleveland metropolitan area lost 8,758 jobs, 5.9% of total jobs in retailing, in the decade between 2006 and 2016. During the same time period, the number of retail establishments dropped 6.5%, a net loss, since new stores keep opening, of 601 establishments.

Much of that loss was in Cuyahoga County as new retail developments sprout up in neighboring counties. Over the decade, the core county lost 5,927 jobs, or 8.6% of its retail jobs, and 464, or 10%, of its retail establishments.

And the decline is continuing, according to preliminary jobs numbers for 2017.

While employment in major Northeast Ohio sectors such as manufacturing, financial services and education and health services held steady or rose, the region continued to lose retail jobs between January 2017 and January 2018, according to the state data.

Regional retail sales are growing, according to Alex Boehnke, manager of public affairs at the Ohio Council of Retail Merchants (OCRM), though regional sales are not well tracked.

The best estimate of the trend in retail sales in Ohio and its metropolitan areas is done by the Economics Center at the University of Cincinnati for OCRM. In November, as the holiday shopping season was beginning, the center estimated that retail sales in the Cleveland metropolitan area for the 2017 holiday season would grow only 3.1%. Sales in the Akron metro were expected to grow only 1.2%. Estimates of national holiday sales growth ranged from 4% to 6%.

“We don’t have the population coming in,” Kleinhenz said. “The pie is not growing.”

CBRE, a national real estate brokerage with a large Cleveland operation, calculates that only two metropolitan areas have more retail square feet per person than Northeast Ohio, where there is 29.9 square feet of retail for every person in the area. In its August 2017 report, “Dead Malls: a boost for retail?,” which is subtitled, “Is retail in Cleveland dying, or is it just overbuilt,” Cleveland-based research analyst Brandon Isner found that only Orlando, with 30.4 square feet per resident (a deceptive figure for a tourist city), and Atlanta, with 30 square feet per resident, top Cleveland.

“It is clear that Cleveland has a supply issue in regard to retail real estate,” Isner wrote. “(W)ithout the population growth that other metro areas have enjoyed, extra retail will weaken what remains.”

In Cuyahoga County, retailers in two mixed-use developments will be opening their doors in the coming months. Opening in the spring, Pinecrest, in Orange Village, has lured several dozen retailers, including Whole Foods, Pottery Barn and Williams Sonoma. In Shaker Heights, the Van Aken District will add about 100,000 square feet of retail space come summer.

Similarly, retail building booms in Avon in Lorain County and in and around the site of the former Geauga Lake amusement park in Geauga County have cost Cuyahoga County retail sales.

“There is no doubt there is a shift going on,” Kleinhenz said. “Are we overstored? In many cases, that is accurate. It’s just that it’s not necessarily that retail is declining broadly.”

Joseph Khouri, a real estate broker with CBRE in Cleveland, agrees with Granot. He, too, believes the retailers who survive will be the ones who sell an experience and activity related retail. He pointed to Toys R Us, which recently announced it was closing all of its stores nationwide after declaring bankruptcy.

“They didn’t differentiate themselves from online sellers,” he said. “People are gravitating toward experiential retail. Specialty food retailers, arts and crafts, home goods products that you have to touch and feel — unique offerings that are hard to mimic online.”

That ability of local retail to be an experience leads Granot to say that he believes local, boutique retailers can also survive.

“Shopping local, especially in Northeast Ohio, is a point of pride,” he said. “There is a lot of room for local retailers to do well, as long as they offer an additional benefit beyond the actual product and price, because it’s going to be increasingly harder to beat Amazon.”

Jay Miller

Crain’s Cleveland

ACE Report: Jobs jumped in July, but longer-term data is down

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ACE Report: Jobs jumped in July, but longer-term data is down

Scott Suttell

July was a good month for jobs in Northeast Ohio, as the region added 6,200 positions on a seasonally adjusted basis from June, according to the latest Ahola Crain’s Employment Report.
But dig a little deeper into the numbers and there’s less to be excited about.

For one, the July increase followed declines in the previous two months — losses of 5,527 jobs in June and 3,708 in May in the seven-county Northeast Ohio region. And, as Cleveland Heights economist Jack Kleinhenz, who developed the ACE Report economic model, pointed out in an analysis of the most recent data, the region’s estimated total employment of 1,173,216 in July represents 3,577 fewer jobs than the like month a year earlier.

The July total payroll estimate for the region also was ever-so-slightly below the six-month trend, which is 1,173,492, according to the ACE Report data.

Service-producing firms registered a larger share of the July increase, at 3,944 jobs, while the goods-producing sector showed a gain of 2,256 jobs, Kleinhenz reported. The report is based on payroll data from about 3,000 employers and is gathered by The Ahola Corp., a Brecksville-based payroll and human resources firm.

In his analysis, Kleinhenz wrote that the growth in regional employment last month “is consistent with July’s national employment release showing a solid increase of 209,000 jobs. The job gains are consistent with 2%-plus economic growth, steady consumer spending and Fed policy as currently projected for a December rate hike.”

The so-so ACE Report results are consistent with a Federal Reserve Bank of Cleveland report released on Thursday, Aug. 17, that found employment growth in Cleveland “has been weak,” and stated that while the economy here is growing, it’s doing so at a slower pace than that of Ohio and the nation as a whole.
Stronger growth could be ahead, Kleinhenz noted, as the U.S. economy “bounced back in the second quarter, growing at an estimated 2.6% on an annualized basis. This is more than twice the pace of the first quarter and brings expansion in the first half of 2017 close to the 2% underlying trend pace.”

ACE Report: NEO goods-producing sector takes biggest jobs hit in June

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The regional employment roller coaster continued in June with Northeast Ohio losing 5,518 jobs from the May total, as total private sector employment dropped to a projected 1,167,386 — a 0.47% loss. Looking year-to-year, past the monthly fluctuations, the job loss in the seven-county metropolitan area since June 2016 is 0.02%, or 290 jobs, according to the Ahola Crain’s Employment, or ACE, Report.

The June job loss was heaviest in the goods-producing section, which includes manufacturing and construction — 3,380 jobs lost between May and June versus 2,138 jobs lost in the larger service sector, which accounts for 82% of the private sector jobs tracked in the ACE survey.

Year over year, the goods sector lost 4,912 jobs versus a gain of 4,621 jobs in services.

Jack Kleinhenz, the Cleveland Heights economist who created the ACE Report model, said the losses are not a serious concern.

“Too much should not be made out of June’s decline,” he said. “It does not point to any major concerns for regional growth. The national and regional economies continue to wander forward at a moderate pace.”

Kleinhenz attributed part of the decline to the auto industry, a large employer in the region, and the summer shutdowns of auto plants.

The July 12 Beige Book, the Federal Reserve Bank’s report on the economy, noted that payrolls in the Fourth District, which includes all of Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia, continued to expand since the last Beige Book report released May 31, although at a slightly slower pace.

Longer term and nationally, Kleinhenz noted that the Institute for Supply Management (ISM) reported the manufacturing sector nationally grew in June and the overall economy grew for the 97th consecutive month. The ISM manufacturing employment index showed a 3.7% increase over May.

“The labor market remains very healthy and continues to show the confidence in workers willing to leave one job for another,” Kleinhenz said.

Closer to home, the recent Ohio Department of Jobs and Family Services, in its “2024 Job Outlook,” is projecting that employment in the region will grow by 74,700 jobs to 1,475,300 by 2024. That’s a 5.3% increase over the 1,400,600 employed in the 2014 base year. The projected growth will come despite a loss of 7,200 manufacturing jobs.

The growth sectors include health care (27,400 jobs), food preparation and serving (7,100) and transportation and material handling (5,000). Many of the jobs that are expected to grow the fastest were in low-paying occupations such as home health aide and restaurant cooks. The report also projected significant demand for registered nurses and computer systems analysts.

Seasonally Adjusted Data

Month Non-Farm Small (1-49) Mid-Sized (50+) Goods-producing Service Producing
Dec 2016 Actual 1,169,560   476,230  693,330 210,690 958,870
Jan (est) 1,175,104   478,434  696,670 212,456 962,648
Feb (est) 1,177,120   479,248  697,872 212,924 964,196
March (est) 1,175,534   478,604  696,930 212,610 962,924
Apr (est) 1,176,482   479,069  697,413 211,641 964,841
May (est) 1,172,905   477,697  695,208 209,786 963,119
June (est) 1,167,386   475,617  691,770 206,406 960,980

July 21, 2017

By  

ACE Report: ‘Tightening’ NEO job market loses 2,505 jobs last month

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The Cleveland-Akron area lost 2,505 jobs last month, a 0.21% decline from April, according to the Ahola Crain’s Employment Report, or ACE Report.

The report estimates that the seven-county Northeast Ohio region employed 1,174,540 people in May, down from 1,177,045 in April.

The report is based on payroll data from 3,000 employers, gathered by The Ahola Corp., a Brecksville payroll and human services firm.

Cleveland Heights economist Jack Kleinhenz, who developed the ACE Report economic model, said the decline in the May seven-county employment estimate, “while perhaps a bit discouraging, can be an indication that labor markets are tightening.”

He cited a National Federation of Independent Business (NFIB) jobs report from May that found business owners are upbeat about sales and are looking to add staff, but that firms say it’s hard to find qualified workers.

Kleinhenz said two factors are key to the shrinking labor pool.

Northeast Ohio’s unemployment rate fell to 5.1% in April from 6.2% in March, according to data from the Ohio Department of Job and Family Services. That translates into a decline in the jobless of 14,200 people, from 85,900 to 71,700. At the same time, baby boomers are retiring.

To Kleinhenz that suggests that “there are not enough people out of work to go back to work.”

Also, Kleinhenz sees a longer-term upward trend, with regional employment growing by 2,647 in the 12-month period ending in May, though that gain was accomplished by five up months overcoming seven months of job declines. By comparison, national employment has registered 80 straight months of increase.

The greatest loss in jobs came in the goods-producing sector, which includes manufacturing and construction, a loss of 1,655 jobs versus the loss of 850 service sector jobs. That correlates, Kleinhenz said, to recent U.S. Census figures showing that factory orders declined 0.2% in May.

Manufacturing production was down 0.4%, Kleinhenz said, including a 2% decline in motor vehicle output.

“I continue to expect a pickup in the pace of economic activity in the second quarter and modest growth for the remainder of 2017,” Kleinhenz said. “The second-quarter 2017 National Association for Business Economics outlook median forecast calls for average annual GDP growth of 2.2% for 2017 as a whole.”

Seasonally adjusted data

Month Non-Farm Small (1-49) Mid-Sized (50+) Goods-producing Service Producing
Dec 2016 1,169,560   476,230   693,330   210,690 958,870
January 1,173,253   477,635   695,618   212,773 960,480
February 1,175,747   478,633   697,113   213,467 962,280
March 1,175,054   478,338   696,715   213,524 961,530
April 1,177,045   479,227   697,818   212,773 964,273
May 1,174,540   478,291   963,423   963,423 963,423
 June 16, 2017

ACE Report: March jobs are down, but year-over-year stats are up

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The Cleveland-Akron metropolitan area lost 798 jobs between February and March of this year, but that slight dip means little to the long-term outlook since the region gained 708 jobs between March 2016 and March 2017 with employment in March at 1,175,598 on a seasonally adjusted basis.

“We are still holding our own relative to last year, but at a slower pace currently,” wrote Jack Kleinhenz, the Cleveland Heights economist who created the ACE Report model, in his analysis. “The economy is attempting to turn the corner toward a bit faster growth, but the momentum has been slower than expected. The unexpected backsliding in March car sales and February’s flat consumer spending confirm a sluggish start to the spring selling season.”

Kleinhenz wrote that policy uncertainties due to the wrangling of issues by the Trump administration and Congress — in particular the size, composition and the timing of any tax cut and infrastructure spending package — are complicating the outlook.

Kleinhenz added that a conundrum within the labor market is a resistance to wage growth in the face of growing job openings and a shortage of qualified workers for skilled positions.

“Until wage gains accelerate, overall economic spending is expected to continue on a moderate path,” he wrote.

In its annual Labor Day report last year, Policy Matters Ohio, the labor-backed Cleveland think tank, focused on those wages. It argued that while pay in Ohio has been growing — to $16.61 an hour for the median worker — it remains far behind what the median wage was in 1979 when adjusted for inflation.

“Wages are behind in large part because our fastest-growing sectors and our most common jobs are low wage,” the report, “Still Struggling: The State of Working Ohio 2016,” said. “Of our 13 most common occupations, only two pay more than 200% of the official poverty line for a family of three.”

The state lost 75,000 relatively well-paying manufacturing jobs between December 2007 and June 2016, Policy Matters reported, while gaining 176,700 lower-paying jobs in education and the health services and the leisure and hospitality industries.

A pair of economic analysts at the Federal Reserve Bank of Cleveland see wage growth a little differently.

In an “Economic Commentary” released in March, Roberto Pinheiro and Meifeng Yang contend that wage growth nationally has been sluggish since the Great Recession due mostly to weak growth in labor productivity and lower-than-expected inflation. But they argue that “wage growth since late 2014 has actually been above what would be consistent with realized labor productivity growth and inflation, and this trend in wages reflects an increase in labor’s share of income.”

This, they write, shows “evidence that this increase in the labor share may be due to a reversal of the trend to replace labor with capital.”

 

Seasonally adjusted employment

Month Non-Farm Small (1-49) Mid-Sized (50+) Goods-producing Service Producing
Sept 2016 (act) 1,175,448   478,642 696,805 211,538 963,910
Oct (est) 1,163,140   473,584 689,555 209,986 953,154
Nov (est) 1,165,227   474,391 690,837 210,986 954,241
Dec (est) 1,164,811   474,220 690,591 210,926 953,885
Jan (est) 1,174,442   478,124 696,318 212,913 961,530
Feb (est) 1,176,396   478,901 697,495 213,530 962,866
Mar(est) 1,175,598   478,561 697,037 213,607 961,990

 

April 21, 2017
By JAY MILLER

ACE Report: Economy is ‘inching forward’ this year

Posted on by katiecmorgan

The seven counties of Northeast Ohio added 943 jobs in February, a modest number, but the second straight month of job increases, according to the Ahola Crain’s Employment (ACE) Report.

Year-over-year, payrolls were up by 5,422 jobs on a seasonally adjusted basis, a 0.46% increase.

February payrolls for the Cleveland Akron Metropolitan Area equaled 1,180,415 on a seasonally adjusted basis. Between February 2016 and February 2017, most of the increase in jobs came from the service section, 5,137 jobs, while the goods-producing sector showed a gain of 285 jobs.

“Recent economic data releases are very encouraging about the near-term outlook for the U.S. economy, and (we) should in turn have a similar expectation for economic activity in Northeast Ohio,” said Jack Kleinhenz, the Cleveland Heights economist who created the ACE model.

“The data in many cases continues on a roller coaster pattern, which makes the strength of the momentum hard to detect,” Kleinhenz said. “Nonetheless, (the data) include the NFIB’s small business optimism index that remains elevated; housing starts increased in February; the job opening and labor turnover survey was unchanged but positive; February’s retail sales were tepid; business inventories increased; and industrial production was unchanged after dipping in January.”

That forecast agrees with a recently released estimate from economists at Pittsburgh-based PNC Financial Service Group, which described the Northeast Ohio economy as “inching forward” during the first quarter of 2017.

“The region’s economic growth is hamstrung, however, by a manufacturing industry that is struggling on multiple fronts,” the report stated. “Steel production and employment in 2016 had been hit hard by cheap imports and the collapse in energy prices that reduced investment in oil and gas wells.”

The PNC economists did see hopeful signs — the oil and gas rig count began to edge up in the last half of 2016, high steel tariffs are expected to help domestic producers, and the auto industry is coming off a record year — at least in the short term.

“Longer term, continued population loss will cause Northeast Ohio to be a below-average performer in terms of job growth,” the report stated before ending on a more optimistic note.

“Though still only in their early development stages, manufacturing hubs for the machinery of new energy technologies and transportation equipment hold great promise for those regions that can attract and cultivate them,” according to the report. “The (Northeast Ohio) region’s lower costs and availability of underutilized assets will be an important tool in attracting new industries and opportunities into the region in the years ahead.”

Seaonally adjusted data

Month Non-Farm  Small  (1-49) Mid-Sized (50+) Goods-producing Service Producing
Sept 2016 (act) 1,175,448  478,642   696,805   211,538 963,910
Oct (est) 1,173,393  477,608   695,784   213,994 959,399
Nov (est) 1,174,298  477,939   696,359   214,709 959,589
Dec (est) 1,172,037  476,994   695,043   214,643 957,394
Jan (est) 1,179,472  480,031   699,441   215,846 963,626
Feb (est) 1,180,415  480,404   700,011   216,172 964,243
 By  March 24, 2017

ACE Report: Service sector keys Northeast Ohio job growth

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Employment in the Cleveland-Akron metropolitan area was up by 8,017 jobs in January, recovering from a decline in December, according to an estimate from the Ahola Crain’s Employment (ACE) Report.

Seasonally adjusted, the region saw employment rise to 1,179,851 from 1,171,834 a month earlier, a 0.68% increase. Most of the growth, 6,900 jobs, was in the service sector, though the goods producing sector saw a rise of 1,196 jobs. In December, the region lost 1,879 jobs.

The estimates also show a 0.35% increase over the number of people working a year earlier, an increase of 4,102 jobs.

“January’s employment estimates exceeded both the three-month and six-month average,” said Jack Kleinhenz, the Cleveland Heights economist who created the ACE model. “The pace of job creation suggests that growth in regional economic activity appears to be at a modest pace early in 2017.”

Kleinhenz attributed that optimism to key regional and national trends affecting the estimates. He said unemployment claims for the region decreased by 20% compared with the like month a year ago, and, nationally, construction and retail sales both show growth.

Despite the occasional month-to-month wobble, employment in the region has been rising steadily, if slowly. Since January 2013, the region’s seasonally adjusted employment has grown by 30,654 jobs, a 2.67% increase. During the same time period, the unemployment rate has dropped from 7.8% to 5.1%, according to the Ohio Department of Jobs and Family Services.

That labor market tightening may be putting pressure on wages to rise. Wal-Mart Stores Inc., for example, said in late January that it would shrink a training program that new employees must complete to earn $10 an hour to three months from six months. Two years ago, the company increased its minimum wage to $9 an hour.

More broadly, the Society for Human Resource Management reported at the end of January that wages are forecast to grow by an average of 3.2% year over year during the first quarter of 2017. Over 2016, the federal Bureau of Labor Standards reported, the average hourly wage grew by 2.9%.

Glassdoor, the online job site, reported on Jan. 31 that annual median base pay hit 3.2%.“The tight U.S. labor market continues to drive wages up in many cities across the country,” said Glassdoor chief economist Andrew Chamberlain in a news release. Glassdoor labor market reports, he said, “show a picture of a strong labor market.”

SEASONALLY ADJUSTED DATA

Month Non-Farm Small (1-49) Mid-Sized (50+) Goods-producing Service Producing
June 2016 1,167,272   475,237    692,035   211,159    956,113
July  (est) 1,175,426   478,218    697,208   217,488    957,938
Aug (est) 1,171,406  476,740    694,667   214,497    956,909
Sept (est) 1,170,029  476,266    693,763   213,003    957,026
Oct (est) 1,173,327   477,567    695,759   214,185    959,142
Nov (est) 1,174,185  477,878    696,306   214,891    959,294
Dec (est) 1,171,834  476,901    694,934   214,765    957,070
Jan (est) 1,179,851  480,192    699,659   215,821    964,031

Recent Month’s Estimated Change

Month Non-Farm Small (1-49) Mid-Sized (50+) Goods-producing Service Producing
Dec ’16 to Jan ’17 8,017 3,291.49   4,725   1,056   6,961
Diff from Jan 2016 4,102 1,733   2,369   (160)   4,262

Trend

Date Non-Farm Small (1-49) Mid-Sized (50+) Goods-producing Service Producing
3-month 1,175,290  478,324   696,967    215,159    960,131
6-month 1,173,439  477,591   695,848    214,527    958,912

By

February 24, 2017

ACE Report: NE Ohio job-creation engine sputtered at the end of 2016

Posted on by katiecmorgan

by SCOTT SUTTELL
The end of 2016 was not kind to Northeast Ohio’s job market, according to the latest Ahola Crain’s Employment (ACE) Report.

Seasonally adjusted employment in December for the seven-county area of Cleveland and Akron measured by the report was 1,170,985, a decline of 1,879 jobs from 1,172,864 in November. And November was no great shakes, either; its total job number was just 286 higher than the October figure calculated in the ACE Report.

Jack Kleinhenz, the Cleveland Heights economist who created the ACE Report model, noted in an analysis of the December data that the seasonally adjusted jobs figure for last month “is below its three-month and six-month average and suggests economic activity and job growth has lost some momentum from the faster pace that was evident in prior months.”
But it’s impossible to draw firm conclusions from one subpar month in one statistical category.

Kleinhenz wrote in his analysis, “We are not sure that the regional economy has made a fundamental change, nor has the national economy, since employment is only one gauge that measures economic activity.” He noted, for instance, that a gauge of economic activity created by the Federal Reserve Bank of Philadelphia rose in Ohio by 2.2% on a year-over-year basis, and recent construction and retail sales data “also show gains.”

Kleinhenz added that “choppy employment” around the end of a calendar year “is not unusual given shifting seasonal hiring patterns. It is typical for the trajectory of monthly employment to be pared significantly back. We expect a similar pattern to take place and recognize that some dampening of the pace of employment gains is projected.”

Kleinhenz wrote in his analysis that regional initial unemployment claims, a factor in the ACE Report model, had been at “historically low levels” but then “kicked up in the middle of December.” Such claims “are usually variable around the holidays because of winter weather, school closures and shifting seasonal hiring patterns,” according to Kleinhenz.

Meanwhile, he wrote, January employment “looks to be a better month based upon a reduction in initial unemployment claims.” Also, he noted that “most measures” of consumer and business sentiment “have shown notable improvement since the November election, raising expectation that economic activity will accelerate at the national and regional levels.”

The national economy “is expected to gain further traction in 2017,” according to Kleinhenz. “Regional growth during 2016 might have been stronger had it not been for weakness in metals production and the energy industry. In addition, the weak global economy and a strong dollar hurt export related firms output and associated employment.”

Despite these developments, he wrote, “the regional outlook (is) promising as national indexes tracking production and new orders in the most recent ISM (Institute for Supply Management) survey rose to levels posted in late-2014.”

Month Non-Farm Small(1-49) Mid-Sized Goods Service
(50+) Producing Producing
June 2016 (act) 1,167,272 475,237 692,035 211,159 956,113
July (est) 1,175,080 478,077 697,003 217,432 957,648
Aug (est) 1,171,211 476,665 694,546 214,391 956,821
Sept (est) 1,169,702 476,139 693,563 212,852 956,851
Oct (est) 1,172,614 477,287 695,327 213,914 958,700
Nov (est) 1,172,864 477,358 695,506 214,400 958,463
Dec (est) 1,170,985 476,588 694,397 214,137 956,848

Recent Month’s Estimated Change
Nov ’16 to Dec ’16 (1,879) (770.15) (1,108) (264) (1,615)
Diff from Dec 2015 1,757 883 874 (2,085) 3,842

Trend
3-month 1,172,154 477,078 695,077 214,150 958,004
6-month 1,172,076 477,019 695,057 214,521 957,555