PLUS REVIEW OCTOBER Quarterly Economic Indicators 18 Counties of Northeast Ohio

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1 NETWORK REGIONAL PARTNER PLUS REVIEW OCTOBER 2014 Quarterly Economic Indicators 18 Counties of Northeast Ohio The Cleveland Plus economy continues to show gradual improvement, with all employment sectors trending up yearover-year. The 18-county region gained an average of more than 10,000 jobs from Q1 to Q1 2014, representing 15 consecutive quarters of year-over-year employment growth. This report takes an in-depth look at the automotive sector how it has performed since and projections for the next decade. It is anticipated that automotive output will reach $4.5B by In addition, automotive employment is expected to grow 19%.

2 Northeast Ohio automotive jobs and gross regional product (GRP) are expected to grow, outpacing the US in the next decade. Historically, manufacturing has been the backbone of the Cleveland Plus economy. GRP in the manufacturing sector is projected to grow 43% from to 2024, but most manufacturing employment is expected to decline due to ongoing efficiencies in production. The automotive sector is one of only two manufacturing sectors forecasted to add new jobs in the coming decade. Food manufacturing is the other sector, but it will experience only modest growth. Automotive GRP is expected to grow as well, and outpace the US growth rate for this sector by almost 20%. AUTOMOTIVE EMPLOYMENT: NORTHEAST OHIO VS. U.S., AUTOMOTIVE EMPLOYMENT TO OUTPACE THE NATION Automotive employment in Northeast Ohio grew from 24,200 employees in to 26,200 employees in 2014, or about 8%. Between and 2024 Cleveland Plus automotive employment is projected to grow 19% to 28,800 employees. Over the same time span, US automotive employment is forecasted to decrease by 3% U.S. AUTOMOTIVE EMPLOYMENT NEO AUTOMOTIVE EMPLOYMENT 1.0 = EMPLOYMENT IN AUTOMOTIVE GROSS PRODUCT: NORTHEAST OHIO VS. U.S., AUTOMOTIVE GRP PROJECTED TO GROW 79% BY 2024 Automotive GRP in Northeast Ohio has grown 15%, from $2.5B to $2.9B, for the time period to The GRP is expected to grow to a $4.5B sector, or 79%, by This increase outpaces the US automotive projection of 60% growth from to U.S. AUTOMOTIVE GROSS PRODUCT NEO AUTOMOTIVE GROSS PRODUCT 1.0 = GRP IN

3 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $ COMPONENTS OF AUTOMOTIVE GROSS PRODUCT IN NORTHEAST OHIO SUPPLY CHAIN REMAINS STRONG IN CLEVELAND PLUS Nearly 10% of all Tier 1 auto suppliers have a presence in Ohio second in number only to Michigan. From raw materials to original equipment manufacturers, the entire automotive supply chain exists in Northeast Ohio. Further, the supply chain is projected to grow even stronger in the next decade. Motor vehicle parts are estimated to increase more than 80% from to 2024 to become a $2.7B sector. For this same time period, motor vehicle manufacturing is projected to grow 77%, to become a nearly $1.3B sector. MOTOR VEHICLE PARTS MFG MOTOR VEHICLE BODY AND TRAILER MFG MOTOR VEHICLE MFG ENGINE AND POWER TRANSMISSION EQUIPMENT MFG DEVELOPMENT ACTIVITY BORGERS ADDS NORTH AMERICAN FACILITY IN NORWALK Borgers USA, a German-based Tier 1 automotive supplier, broke ground on a $60 million plant in Norwalk that will employ 230 people in Huron county. The company produces textile products mostly trim, carpeting and insulation for passenger cars and commercial vehicles. TRUBRIDGE TO EXPAND IN NORTH CANTON TruBridge, Inc., an organization that provides healthcare education and plan choices for the Medicare eligible population, has decided to expand in North Canton. The company will add 100 full-time positions by the end of The expansion will retain $5.8 million in payroll and add another $2.5 million. ARCELORMITTAL GROWS IN SHELBY ArcelorMittal Shelby, a tubular product facility, is expanding its cold drawing and finishing capabilities at the Shelby location. The $30 million investment will increase cold drawing and finishing capacities to meet the market demand for increased production of drawn over mandrel (DOM) tube, a product supplied to the fluid power market. The facility currently has more than 630 employees. This new investment is expected to create another 45 jobs when fully operational. MATALCO EXPANDS IN LORDSTOWN In September Matalco, Inc. broke ground on a $100 million, 200,000-square-foot remelt aluminum billet manufacturing plant in Lordstown. The investment will allow the company, which operates one of its two existing plants in Canton and the other in Ontario, to be closer to its current customers and strengthen its North America market. The facility is set to open in early 2016 and will result in 60 new jobs with an annual payroll of $4 million. HEINZ FROZEN FOOD GROWS IN MASSILLON Heinz Frozen Food Co. just completed an approximately $28 million expansion to its processing facility in Massillon with plans to add about 250 local manufacturing jobs by the end of The facility currently has 467 employees. Heinz chose to expand in the city last fall mainly due to an existing distribution center at the Massillon plant and a successful employee efficiency rate of 90 percent. Logistically, the distribution facility shortens deliveries to the east coast. DOWNTOWN CLEVELAND PROJECTS SET TO BE COMPLETED FOR REPUBLICAN NATIONAL CONVENTION IN 2016 Development activity continues in downtown Cleveland, with targeted completion in time for the Republican National Convention in 2016: Work is concluding on a $250 million project at the corner of E. 9th and Euclid, where the new Cuyahoga County Administration Building recently opened and the renovation of the former Ameritrust complex into apartments, offices, a hotel and grocery store is nearly complete. The $150 million second phase of the Flats East Bank project is in full swing, with steel construction nearly finished on the eight-story apartment and retail building near the river. A new $272 million Hilton Cleveland Downtown hotel is going up adjacent to both the Global Center for Health Innovation and the Cleveland Convention Center. Planning work for the $30 million redesign of Public Square, which recently received major financial commitments from The Cleveland Foundation, Gund Foundation, KeyBank Foundation, Kent Hale Smith Foundation and Northeast Ohio Regional Sewer District is progressing. In addition, initial design concepts are being developed for a $25 million pedestrian and bicycle bridge from the northern edge of downtown to North Coast Harbor.

4 NORTHEAST OHIO TOTAL EMPLOYMENT (NOT SEASONALLY ADJUSTED) TOTAL EMPLOYMENT IN MILLIONS TOTAL EMPLOYMENT GROWS YEAR-OVER-YEAR Total Northeast Ohio employment averaged 1.85 million workers in Q1 an increase of approximately 10,000 jobs year-over-year. This marks the 15th consecutive quarter of year-over-year employment growth. Source: Quarterly Census of Employment and Wages (QCEW). This is the most current, reliable data available for total jobs in Northeast Ohio Q1 Q2 Q3 Q4 UNEMPLOYMENT RATES THROUGH MARCH % 12% 11% 10% 9% 8% US OHIO NORTHEAST OHIO UNEMPLOYMENT DECLINES YEAR-OVER-YEAR Northeast Ohio s unemployment rate decreased year-over-year from 8.3% in Q1 to 7.6% in Q The state and US also experienced lower unemployment rates both dropping from 8.1% in Q1 to 6.9% in Q % 6% NEO Source: Current Population Survey (CPS), a survey of 60,000 households nationwide. 5% 4% NEO OHIO US CHANGE IN EMPLOYMENT BY SECTOR THROUGH MARCH = AVERAGE 1.10 ALL SECTORS POST YEAR-OVER-YEAR INCREASES MANUFACTURING SERVICES The service sector gained nearly 8,700 jobs year-over-year, averaging 1.26 million workers in Q Construction employment continued to increase, adding more than 1,400 workers year-over-year, while manufacturing grew more than 1,200 jobs year-over-year..70 CONSTRUCTION Source: Quarterly Census of Employment and Wages (QCEW) 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 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 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 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 MANUFACTURING SERVICES CONSTRUCTION

5 NORTHEAST OHIO REAL REGIONAL GROSS PRODUCT (GRP) IN BILLIONS NEO REAL GRP IN BILLIONS $210 $200 $190 $180 $170 $160 $ % 3.4% 1.5% 2.7% 5.3% 1.9% 1.4% (-2.3%) 1.2 % 2.0% (-0.1%).5% (-1.5 %) 2.3% 0% (-2.1%) 2.7% 2.3% (-6.4%) 1.2% MODEST GROWTH PROJECTED FOR NORTHEAST OHIO GRP Moody s Economy.com continuously updates projections for GRP. For the 18 counties of Cleveland Plus, the estimate for 2014 is 1.2% growth. $140 $ REAL GRP AVERAGE ANNUAL GROWTH = 1% NORTHEAST OHIO INDUSTRIAL AND OFFICE VACANCY VACANCY RATE 12% 11% 10% 9% 8% INDUSTRIAL SPACE VACANCY LOWEST SINCE The vacancy rate for industrial space is at 8.0%, the lowest rate since Q4. Occupied square feet is at 521 million square feet for industrial space. Class A, B and C office vacancy rate is at 11.3%, down from Q2. Source: CoStar 7% 6% 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 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 OFFICE INDUSTRIAL OHIO UTICA WELL ACTIVITY WELL ACTIVITY JUMPED IN Q3 PERMITTED/DRILLED WELLS (NON-CUMULATIVE) Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 PERMITTED DRILLED PRODUCING WELLS PRODUCING WELLS (CUMULATIVE) Well activity increased significantly from Q to Q with 187 new permits issued and 188 new wells drilled. Wells in production increased by 110, or 24%, for the same time period. Further, as mid-stream infrastructure projects are brought online, the number of producing wells increased 130% year-over-year. Since tracking Utica shale well activity in Q2, there have been 1,527 total permits issued of which 1,087 have been drilled and 572 are currently in production. Source: Ohio Department of Natural Resources

6 GENEROUS SUPPORT PROVIDED BY: Regional Marketing Alliance of Northeast Ohio DATA SOURCES Team Northeast Ohio uses a number of data sources for the Regional Economic Review. One of the primary sources is 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. ABOUT TEAM NEO AND THE CLEVELAND PLUS 18-COUNTY REGION Lake Ashtabula CLEVELAND LORAIN Cuyahoga Geauga Erie Trumbull Lorain Portage Huron Summit Medina AKRON YOUNGSTOWN Mahoning Ashland Richland Wayne CANTON MANSFIELD Columbiana Stark Team NEO is a regional, private-sector organization that markets Northeast Ohio to the world and collaborates with its partners and others to attract new businesses and help those that are here grow. We are the Northeast Ohio regional partner for JobsOhio, a private, nonprofit corporation that drives economic development and job creation for the state. As the JobsOhio regional partner, we support the retention and expansion work of our 18 county partners by connecting them, and their client companies, with both state and JobsOhio support as well as resources across Northeast Ohio. Since, we have attracted 93 new company operations, more than 8,100 new jobs and $356 million in annual payroll to Northeast Ohio. Since becoming a JobsOhio regional partner in, we also have helped 242 companies within Northeast Ohio create or retain almost 65,000 jobs and add almost $3.2 billion in capital investment. For more information, visit Tuscarawas CONNECT WITH US NETWORK REGIONAL PARTNER 737 Bolivar Road, Suite 2000, Cleveland, Ohio NEO