The Cleveland Plus economy continues to improve. unemployment is at its lowest rate in three years, and GrP is expected to grow in 2012 for the third consecutive year, with total GrP at more than $184 billion.

One of the industries contributing to this growth is food manufacturing, an industry that tends to be more resilient to economic downturns. in 2011, food manufacturing was a $2.6 billion industry in northeast Ohio. By 2019, it is projected to grown more than 13%.

PluS rEViEw Q4 2011Quarterly Economic indicators 18 Counties of northeast Ohio

ClEVElanD iS a huB OF inVESTMEnT aCTiViTy Greater Cleveland’s real estate investments, including more than $2 billion in our downtown central business district, continue to advance:

• Structural steel dominates the site of the $465 million Cleveland Medical Mart & Convention Center. The four-story medical showplace is mostly framed, and the northern portion of the underground exhibition space is fully covered.

• Steel and concrete continue to rise on the site of the $275 million Flats East Bank Phase 1, which will feature a 450,000-square-foot office tower, a 150-room hotel and new retail venues.

• At Public Square, work is near completion inside the historic Higbee Building, where the Cleveland Horseshoe Casino will open in 2012.

• Nearly all of the cement support pillars for the new $287 million Inner Belt Bridge have taken shape in the Cuyahoga River Valley just north of the existing highway span.

• A $60 million transformation of the former Crowne Plaza Hotel is under way as Greater Cleveland welcomes its first Westin Hotel. The 481-room hotel is expected to be guest-ready in time for the grand opening of the Medical Mart & Convention Center next door.

• A $20 million renovation is planned for the downtown building where AmTrust Financial Services Inc. plans to locate more than 1,000 employees. The New York-based insurance company will be the primary tenant of the 23-story office tower.

• Cleveland State University broke ground in November on the first phase of its $45 million mixed-use housing project at Campus Village. The complex will feature 300 market-rate apartments plus first-floor retail when completed this fall.

DEVElOPMEnTS iGniTE yOunGSTOwn/warrEn arEa In September, The Wall Street Journal reported that the Youngstown area is the nation’s new energy hot spot. Indeed the area is bustling with development in the energy industry as well as other areas. Among recent projects:

• VAM USA, LLC, manufacturer of premium pipe connections, has announced it will locate a 200,000-square-foot finishing plant in Youngstown.

• Anderson-Dubose, Inc., a minority-owned food distributor and supplier to McDonald’s, broke ground in August on a $30 million, 155,000-square-foot distribution center and headquarters in Lordstown.

• Universal Stainless & Alloy Products is investing more than $100 million to bring a new 205,000-square-foot specialty steel facility online in North Jackson.

• Two food manufacturers, PurFoods, LLC and Summer Gardens Food Manufacturing, are expanding in the Youngstown area – PurFoods in North Jackson and Summer Gardens in Boardman.

OlD DOMiniOn FrEiGhT OPEnS lEED-CErTiFiED FaCiliTy Old Dominion Freight Line Inc. has opened its newest service center in Canton: a 33,000-square-foot, LEED-certified terminal with 70 truck bays and space to add 40 more. To achieve LEED certification, the company employed a number of measures to save water and optimize energy efficiency. The service center is strategically located along Interstate 77, which provides easy access to Interstates 90, 80, 70 and 71.

SuarEZ BrinGS EDEnPurE ManuFaCTurinG OnShOrE Suarez Corporation Industries has opened its manufacturing facility in North Canton, relocating the production of its EdenPURE product line from China. Operating three shifts, seven days a week, Suarez is making 4,000-plus EdenPURE infrared space heaters daily for shipment to domestic and foreign retailers.

DEVElOPMEnT aCTiViTy

Fruit/Vegetable Preserving and

Specialty Foods

Bakeries and Tortilla

Other Food Manufacturing

Slaughtering and Processing

Dairy Products

Sugar and Confectionary

Products

Grain and Oilseed Milling

$0

2000

Millions

2011

$100 $200 $300 $400 $500 $600 $700

GrOwTh in FOOD ManuFaCTurinG GrOSS PrODuCT: 2000-2011

Fruit/Vegetable Preserving and

Specialty Foods

Bakeries and Tortilla

Other Food Manufacturing

Slaughtering and Processing

Dairy Products

0% 5% 10% 15% 20% 25%

Grain and Oilseed Milling

uS

nEO

-40%

-30%

-20%

-10%

0

10%

20%

30%

40%

50%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

nEO Food Mfg nEO all Mfg uS Food Mfg

FOOD ManuFaCTurinG

FEEDS ThE ECOnOMy OF ThE ClEVElanD PluS

rEGiOnNortheast Ohio supplies a

broad range of food products and services – from dairy

products, pretzels and chips, and jellies and jams to

meat processing – to markets across the nation and beyond.

Employing nearly 18,000 people, the Cleveland Plus

food manufacturing industry ranks sixth of 21 sectors for

manufacturing employment and accounts for 8% of the

region’s total manufacturing and 1.3% of total US

food manufacturing.

PrOjECTED GrOwTh in FOOD ManuFaCTurinG GrOSS PrODuCT nEO VS uS: 2011-2019

FOOD ManuFaCTurinG inDEx nEO VS uS: 2000-2019 (PrOjECTED)

a DECaDE OF GrOwTh, DESPiTE TwO rECESSiOnS From 2000 to 2011, food manufacturing grew 25% overall in Northeast Ohio, with growth in nearly every segment.

ThE MOMEnTuM COnTinuES: waTCh FOr 13% GrOwTh, 2011-2019 A $2.6 billion industry in 2011, Northeast Ohio food manufacturing is projected to grow to $3 billion by 2019. The region’s food manufacturing gross product is expected to grow almost 13% from 2011 to 2019. Sugar and Confectionery Products not projected to grow for nEO and u.S.

OuTPaCinG ThE naTiOn anD TOTal ManuFaCTurinG Food manufacturing in Northeast Ohio grew slightly faster than the US from 2000 to 2011. Food manufacturing also grew nearly 25% between 2000 and 2011, while total manufacturing declined 18%. The sector is projected to grow 2% more than the US between 2011 and 2019.

ClEVElanD PluS EMPlOyMEnT GrOwS Six COnSECuTiVE QuarTErS From Q3 2011 to Q4 2011 there was a seasonal decline of about 18,000 jobs. However, year-over-year employment growth continues. In Q4 2011, 27,000 (or 1.5%) more people were employed than in Q4 2010. Total

employment averaged 2.05 million workers. Source: Ohio Labor Market Information (LMI)

ClEVElanD PluS TraCKinG EVEn TO u.S. Through 17 quarters of the 2007 recession, the employment index for Cleveland Plus is trending the same as the US. This compares to a gap through 17 quarters of the 1981 recession, when Northeast Ohio’s index was 5% lower than the US. index. Source: Ohio Labor Market Information (LMI)

ManuFaCTurinG, SErViCES anD COnSTruCTiOn SEE yEar-OVEr-yEar GrOwTh Manufacturing saw a 4% increase year-over-year with more than 8,400 jobs gained. While services gained 11,000 jobs (1%) and construction also saw year-over-year gains (nearly 7% and 4,000 workers), government was down almost 5,000 workers (-2%) from Q4 2010. Source: Bureau of Labor Statistics (BLS)

2.05

2.10

2.15

2.20

2.00

1.95

1.90

1.85

1.80

2007

Q1 Q2 Q3 Q4

2008

2009

2010

2011

2007

2008

2009

2010

2011

2007

2008

2009

2010

2011

2007

2008

2009

2010

2011

nOrThEaST OhiO TOTal EMPlOyMEnT (nOT SEaSOnally aDjuSTED)

rECESSiOn EMPlOyMEnT COMPariSOn ChanGE in EMPlOyMEnT By SECTOr0=2007 aVEraGE

nEO unEMPlOyMEnT raTE lOwEST in ThrEE yEarS With an unemployment rate of 7.6% in Q4 2011, Northeast Ohio outperformed both Ohio (7.9%) and the US (8.3%). This is the first time the unemployment rate has fallen below 8% since Q4 2008. Year-over-year, the unemployment rate declined 1.6%. Source: Ohio Labor Market Information (LMI)

unEMPlOyMEnT raTESThrOuGh DECEMBEr 2011

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

Q1

07

Q2

07

Q3

07

Q4

07

Q1

08

Q2

08

Q3

08

Q4

08

Q1

09

Q2

09

Q3

09

Q4

09

Q1

10

Q2

10

Q3

10

Q4

10

Q1

11

Q2

11

Q3

11

Q4

11

nEO OhiO uS

uS

COnSTruCTiOn

OhiO

SErViCES

nEO

ManuFaCTurinG

GOVErnMEnT

-50%

-40%

-30%

-20%

-10%

0

+10%

Q1

07

Q2

07

Q3

07

Q4

07

Q1

08

Q2

08

Q3

08

Q4

08

Q1

09

Q2

09

Q3

09

Q4

09

Q1

10

Q2

10

Q3

10

Q4

10

Q1

11

Q2

11

Q3

11

Q4

11

Manufacturing Services GovernmentConstruction

0

+10%

5%

-5%

-10%

Q3

81

Q4

07Q

4 81

Q

1 08

Q1

82

Q2

08Q

2 82

Q

3 08

Q3

82

Q4

08Q

4 82

Q

1 09

Q1

83

Q2

09Q

2 83

Q

3 09

Q3

83

Q4

09Q

4 83

Q

1 10

Q1

84

Q2

10Q

2 84

Q

3 10

Q3

84

Q4

10Q

4 84

Q

1 11

Q1

85

Q2

11Q

2 85

Q

3 11

uS 81 uS 07nEO 81 nEO 07

Q3

85

Q4

11

+5%

EVEn

iniTial unEMPlOyMEnT ClaiMS DOwn yEar-OVEr-yEar Initial claims saw a typical seasonal increase to 5,800 in Q4 2011. However, this number is down from the average of 6,100 in Q4 2010. Continued claims in Q4 2011 averaged 35,800, up seasonally from Q3 2011. This represents a drop of nearly 8,000 continued claims, however, from Q4 2010. Source: Ohio Labor Market Information (LMI)

inDuSTrial SPaCE uSaGE rEMainS STaBlE In Q4 2011, Northeast Ohio’s occupied industrial space remained stable at 510 million square feet. The vacancy rate remained flat at 9.2%.Source: CoStar

nEO GrP ExPECTED TO GrOw in 2012GRP in the 18-county region is expected to grow approximately 1.1% in 2011, while GRP in 2012 is projected to grow 2.1%, with total GRP at more than $184 billion. Since 1994, our economy has grown by more than $31 billion, or more than 20%. Source: Economy.com

ManuFaCTurinG, SErViCES anD COnSTruCTiOn SEE yEar-OVEr-yEar GrOwTh Manufacturing saw a 4% increase year-over-year with more than 8,400 jobs gained. While services gained 11,000 jobs (1%) and construction also saw year-over-year gains (nearly 7% and 4,000 workers), government was down almost 5,000 workers (-2%) from Q4 2010. Source: Bureau of Labor Statistics (BLS)

OFFiCE SPaCE rEMainS COnSiSTEnT Class A, B and C office space in Cleveland Plus increased to 143 million square feet. The vacancy rate declined slightly, to 11.1% from 11.4% in Q3 2011. Source: CoStar

nEO rEal GrOSS rEGiOnal PrODuCT (GrP) in BilliOnS

nOrThEaST OhiO OCCuPiED inDuSTrial SPaCE

nOrThEaST OhiO ClaSS a, B anD C OFFiCE SPaCE

aVEraGE MOnThly unEMPlOyMEnT ClaiMS

0 0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

20,0000

40,0000

60,000

80,000

100,0000

120,0000

Q1

07

Q2

07

Q3

07

Q4

07

Q1

08

Q2

08

Q3

08

Q4

08

Q1

09

Q2

09

Q3

09

Q4

09

Q1

10

Q2

10

Q3

10

Q4

10

Q1

11

Q2

11

Q3

11

Q4

11

initial Claims

Continued Claims

initial Claims

Continuing Claims

500,000,000

520,000,000

540,000,000

480,000,000

460,000,000

440,000,000

420,000,000

400,000,000 4%

5%

6%

7%

8%

9%

10%

11%

Q1

08

Q2

08

Q3

08

Q4

08

Q1

09

Q2

09

Q3

09

Q4

09

Q1

10

Q2

10

Q3

10

Q4

10

Q1

11

Q2

11

Q3

11

Q4

11Occupied Spcae

Vacancy rate

average annual Growth = 1.2%real GrP

$180

$190

$200

$170

$160

$150

$140

$130

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

4.1%

3.4%

5.2%

2.8%

1.3%

1.9%

1.5%

1.3%

2.1%

0.1%

2.3% 1.1%(-2.4%)

(-1.4%)(-1.4%)

(-5.1%)

.4%

201

2

2.1%

144,000,000 12.0%

140,000,000

142,000,000

138,000,000

136,000,000

134,000,000

132,000,000

130,000,000 9.5%

10.0%

10.5%

11.0%

11.5%

Q1

08

Q2

08

Q3

08

Q4

08

Q1

09

Q2

09

Q3

09

Q4

09

Q1

10

Q2

10

Q3

10

Q4

10

Q1

11

Q2

11

Q3

11

Q4

11

Vacancy rateOccupied SpaceVacancy rateOccupied Space

Occupied Spcae

Vacancy rate

737 Bolivar Road, Suite 2000, Cleveland, Ohio 44115888.NEO.1411 • www.clevelandplusbusiness.com

Team Northeast Ohio uses a number of data sources for the Regional Economic Review. One of the primary sources is the Moody’s Economy.com (economy.com) data for Northeast Ohio.

Moody’s Economy.com county-level output, employment and payroll historical data are estimated from several publicly available sources and are summarized into the Team NEO regional footprint. It is important to understand data provided by Economy.com are estimates of economic activity.

Team NEO also uses data from federal and state sources as part of the report. We rely heavily on data from the U.S. Bureau of Labor Statistics (bls.gov) and Ohio’s Labor Market Information (lmi.state.oh.us) for information on wages, unemployment and both general and industry-specific employment.

Industrial and office real estate data for this edition were derived from the CoStar Group. Due to market limits within the CoStar database, historic trend data for the Team NEO region are reflective of 14 of the 18 counties forming the regional footprint. These counties include: Ashtabula, Cuyahoga, Erie, Geauga, Huron, Lake, Lorain, Mahoning, Medina, Portage, Richland, Stark, Summit and Trumbull.Recession employment data for this edition reflect former 16-county footprint. Employment sector data reflects MSA data (Cleveland-Akron-Canton-Youngstown).

Team NEO advances Northeast Ohio’s economy by serving as the 18-county region’s private-sector economic development hub. It builds collaboration among the region’s economic development organizations, attracts new businesses from around the world and connects the region to the state’s JobsOhio program. Since 2007, the organization has attracted 52 new company operations, 4,900 new jobs and more than $189 million in annual payroll to Northeast Ohio, leading to a total annual regional payroll benefit of $333 million. For more information, visit clevelandplusbusiness.com.

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