Economic Development Projects Should Continue Unabated in 2015
By Hans Rosebrock NORED President Manager, Economic Development, Ohio First Energy Corp.
2014 was certainly a year in which economic activity in the NORED region accelerated. Many member economic development organizations saw investment and employment increases in their respective jurisdictions. Significant office developments that were announced for the Toledo urban area included Dana,
ProMedica, and The Anderson’s headquarter projects. In the manufacturing sector, projects at Toledo Refining, Faurecia Automotive Systems, GT Technologies, and Allermuir represent noteworthy expansions of production capacity.
In the outlying areas of the region, Standard Technologies based out of Fremont, TRW Automotive in Fayette, Webster Industries of Tiffin, Valfilm NA within Findlay, and FirstEnergy’s Davis-Besse nuclear plant near Oak Harbor made considerable investments.
FirstEnergy’s Davis-Besse $600 million steam generator replacement and refueling project, which I had extensive involvement in, provides a perfect example of how large scale private sector investments impact our regional economy. At the height of the project in February, 3,200 contract personnel, from engineers to welders, were employed to perform an array of duties to install two Babcock & Wilcox 470 ton steam generators, do ancillary work associated with these heat exchangers, and refuel the plant’s reactor.
This project, along with the plant’s regular operations, provided a total economic impact on the State of Ohio equating to $944 million in 2014. This figure includes direct, indirect, and induced impacts along with fiscal influences on state and local governments. Direct impacts include wages paid to employees and other inputs used directly by the Davis-Besse plant. Indirect impacts, or what some economists’ term as spin-off or ripple effects, result from the purchases made by Davis-Besse. As such, these businesses increase employees, wages, and also purchase goods/services from business who supply them, thus a spin-off or ripple effect. Induced impacts include all household purchases made by Davis-Besse, contractor, and supplier employees. Total state and local tax impacts are estimated to be $13.2 million.
As can be seen by this example -- in this case energy -- but also manufacturing, or corporate headquarter undertakings, considerable monetary benefits are derived from such projects and this is exactly the reason why collaborative economic development efforts are needed at the local, regional, and state levels to help facilitate these.
If all commercial indicators can be trusted, economic development projects in the NORED region, similar to ones mentioned previously, should continue unabated. Gross Domestic Product grew at an annualized rate of 3.9% in the 3rd quarter of 2014. Unemployment in the State of Ohio fell to 4.5% in November. Consumer confidence in November, as measured by the University of Michigan/Reuters, was the highest since July 2007. These trends combined with lower fuel prices and added automotive purchases, now predicted to hit close to 17 million units in 2015, bode well for the NORED region in the coming year.