Ohio needs to add about 133,000 jobs to return to pre-pandemic levels

Intel CEO Pat Gelsinger speaks at the groundbreaking ceremony in September for Intel's $20 billion microchip manufacturing project in New Albany.

The string of recent announcements that Intel, Honda, Ford and others plan to invest billions of dollars in Ohio promises to create thousands of high-paying manufacturing jobs in a state that needs them in the coming years.

For now, however, adding jobs of any kind to Ohio’s economy has become difficult.

Ohio employers cut 7,600 jobs in September, the most of any state, according to state and federal government data.

The unemployment rate held steady at the low of 4% in September, but only because the number of people in the workforce shrank by 10,000, employment data shows.

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“The overall trend for job growth in Ohio has stagnated in recent months with fewer than 6,000 jobs since April,” senior economist Ben Ayers said in a research note after the state’s jobs report was released.

The September job loss means Ohio now needs about 133,000 jobs to get back to where it was before COVID-19 started in 2020.

“Labour demand in Ohio has declined in recent months with a sharp decline in the number of reported job openings,” Ayers said. “But there are still fewer unemployed than job openings, indicating a tight labor market.”

DeWine: No better place than Ohio

When Honda released details of its joint venture with South Korean company LG Energy Solution to build a $3.5 billion electric vehicle battery factory in Fayette County, southwest of Columbus, Governor Mike DeWine celebrated the announcement. in front of hundreds of people in the Statehouse.

“Honda and LG Energy Solution now join a long list of companies that have searched across the country for the best place to do business, choosing Ohio because we have the ideal economic climate and an innovative and talented workforce,” he said. announcement is further proof that right now there is no better place to be than in the great state of Ohio.”

The two companies say they will create 2,200 jobs at its southwest Ohio plant, and Honda says it will add 327 jobs at three Ohio plants west of Columbus that will be converted to make electric vehicles and components.

Honda announced at the Statehouse in October that it will build a $3.5 billion battery plant in Fayette County with LG Energy Solution.

The announcement follows Intel, which says it will create 3,000 jobs in Licking County; Ford’s plans to add 2,000 jobs at Avon Lake, near Cleveland, to make electric commercial vehicles; and Chinese company Semcorp Manufacturing USA’s plan to create 1,200 jobs in western Ohio’s Sidney for operations that will make materials used in electric vehicle batteries and other products.

While the announcements are good news, they need to be put into context, said Mike Hicks, an economics professor at Ball State University in Muncie, Indiana, who studies Midwestern economics.

“New job announcements make up a small fraction of total employment,” he said, citing studies over the past 20 years showing that 1.3% to 1.8% of job growth comes from such announcements. while the rest comes from existing employers adding jobs.

While these manufacturers will add thousands of jobs in Ohio, they are still a fraction of the 5.5 million jobs in Ohio.

Manufacturing was the pinnacle of Ohio’s September jobs report, with 8,700 jobs, more than any other industry. Ohio now has 690,300 manufacturing jobs, almost as many as before the pandemic began in March 2020.

Meanwhile, the state is losing jobs in all service sectors.

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The leisure and hospitality sector, one of the hardest hit by the coronavirus, lost 5,400 jobs last month, followed by 5,300 jobs in the private education and health care sector. A broad sector of the economy called “other services,” which includes everything from zookeepers to funeral directors, lost 5,000 jobs, and the sector that includes professional and business services lost 3,200 jobs.

Hicks believes that manufacturing jobs will continue to decline over time as companies invest in automation. The workers in these factories will be highly educated and skilled, he said.

With the rise of remote work, cities in the Midwest, where population growth has largely stagnated, need to do more to show people that the cities are good, affordable places to live, he said.

“A lot of people leave unattractive places and move to attractive places,” Hicks said.

Is a recession coming?

If a recession is coming, you can’t tell by last week’s rising GDP figures or the financial results released by Huntington Bancshares last week.

The bank’s third quarter figures for the period from July 1 to September 1. 30 were records, with earnings of $594 million, more than 50% higher than the same quarter a year ago.

“This is one of the neighborhoods you dream of,” said Steve Steinour, the bank’s chairman, president and CEO.

But Steinour acknowledged that the economy is slowing and the bank’s corporate clients are preparing for a recession.

“We are now heading for a recession, if not one,” Steinour said.

Companies say inflation is the main problem, followed by their need for workers, Steinour said.

Meanwhile, the Federal Reserve wants to slow the economy as a way to cool inflation from its 40-year high, raising interest rates that are already taking their toll.

Finding employees can be difficult, said Nationwide’s Ayers.

“September showed no improvement in the labor supply within the state as the labor force shrank again modestly,” he said. “Even with high wages and widespread job opportunities, many potential Ohio workers remain on the sidelines, limiting hiring options for employers and reducing the number of jobs.”

mawilliams@dispatch.com

@BizMarkWilliams

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