The CHIPS Act Advances
This report is a summary of third-party economic research and perspectives to foster communication with business and economic development stakeholders.
Key Economic Insights
- U.S.: Consumer prices rose at fastest annual pace (9.1%) since November 1981. Retail sales rose more than forecasted during the month. Industrial production posted the first monthly decline of 2022.
- Ohio: Unemployment rate remained at 3.9% in June. Labor force participation rate held at 62%. Venture capital investment totaled $507M in Q2 2022.
U.S. consumer prices in June accelerated at the fastest annual pace since November 1981, with the Consumer Price Index (CPI) rising at a 9.1% annualized rate during the month. Core CPI rose 5.9%, down from 6.0% in May. The Producer Price Index (PPI) rose at an 11.3% annual rate in June, the highest reading since March 2022. Core PPI advanced 6.4%, a deceleration from the 6.8% gain seen in May. The Conference Board Leading Economic Index (LEI) for the U.S. decreased for a fourth consecutive month, falling 0.8% in June. The index fell 1.8% over the first half of 2022, a reversal from its 3.3% growth in the second half of 2021. The Conference Board expects economic growth to continue to cool throughout the remainder the year.
U.S. retail sales rose more than forecasted in June, advancing 1.0% from the previous month. U.S. Industrial production fell 0.2% in June, marking the first monthly decline in output this year. Despite the monthly decline, total production advanced at a 6.1% annual rate in Q2 of 2022. Manufacturing output declined 0.5% for a second consecutive month in June, but still recorded a 4.2% annual gain to end the quarter. Capacity utilization decreased 0.3% to 80% during the month but remains above its long-run (1972–2021) average.
The NFIB Small Business Optimism Index fell to 89.5 in June, marking the sixth consecutive month below the 48-year average of 98. Small business owners expecting better business conditions over the next six months decreased to a net negative 61%, the lowest level on record in the 48-year survey. Initial jobless claims hit an eight-month high for the week ended July 15, rising to 251,000. Continuing claims made the largest advance since November 2021, rising by 51,000 to 1.384M.
The Semiconductor Industry Association (SIA) applauded the U.S. Senate advancing CHIPS Act on July 19. The legislation would provide $52B for semiconductor manufacturing incentives and research investments and include an investment tax credit for semiconductor manufacturing.
Ohio Employment & Economic Insights
Ohio’s unemployment rate was 3.9% in June, unchanged from May. The number of unemployed has decreased by 81,000 over the past 12 months. The labor force participation rate in Ohio was 62.0% in June, unchanged from May and up from 61.7% in June 2021.
Ohio ranked #15 in CNBC’s Top States for Business 2022, ranking among the top 5 states on sub-categories including Infrastructure (#2), Access to Capital (#3), and Cost of Doing Business (#4) and receiving favorable rankings for Technology & Innovation (#11) and Cost of Living (#12). The state ended Fiscal Year 2022 with a $4.3B surplus, the strongest year on record from a fiscal perspective, according to the latest financial report from the Ohio Office of Budget and Management. The report shows the state’s total revenues for the fiscal year were 12% above estimates. Tax receipts finished $2.7B (10.8%) above estimates and $1.7B (6.4%) over the previous year. The Commercial Activity Tax took in $196.1M (10.9%) above estimates.
The U.S. Economic Development Administration awarded a $5M grant to the Athens County Port Authority to build a 60,000 SF facility to house biomedical, biotechnology, and advanced manufacturing companies. The investment is expected to create 150 jobs and generate $5M in private investment.
Ohio Company News
- Green Dot, a Texas-based fintech company, plans to open a customer service and support site in Blue Ash with plans to hire roughly 100 new employees.
- Atlantic Emergency Solutions will invest $4.7M to expand its operations in Morgan County, creating 17 new jobs and retaining 18 existing positions.
- B. & L. Transport will invest $4.5M in its operations in Millersburg, creating 12 new jobs and retaining 33 existing positions.
- ThinkPath Engineering Services landed a 3-year $18M contract with Lockheed Martin. The 3-year award resulted in dozens of additional employees and more than 60% growth for the Dayton-area business.
- Ernst Metal Technologies will soon break ground on a roughly 24,000 SF addition to its plant in Moraine. The project represents a $7-8M investment and will result in 5-10 new jobs.
- BankiFi, a UK-based fintech company offering payment solutions for small-to-medium businesses, will open its North American offices in Columbus.
- The Cleveland Foundation announced a $28-30M, 95,000 SF Phase II investment, called the MidTown Collaboration Center, next to its new $22M HQ in Hough as part of the Cleveland Innovation District.
- CommuniCare Health Services, based in Cincinnati, will acquire Stonerise Healthcare Transitional Care’s 17 facilities across WV and OH.