Ohio’s Target Industries Post Strong Job Gains in 2012

Each of Ohio’s nine target industries added employment¹ in 2012 and five of the nine sectors posted job growth far stronger than Ohio’s overall job growth of 1.8% during the year. Target industry job gains were led by Ohio’s BioHealth sector, which mostly comprises pharmaceutical and medical equipment manufacturing, posting 14.1% year-over-year growth in the fourth quarter of 2012. The Energy sector also saw strong gains, due in large part to the development of Ohio’s shale gas reserves. What is especially impressive about the job gains in the BioHealth and Energy sectors is that these are two target industries where Ohio is only beginning to develop a competitive cluster—as gauged by the state’s location quotient.

The location quotient is measure of how big these industries are given the overall size of Ohio’s economy. In this case, a location quotient less than one indicates an industry that is underweight in terms of what one might expect given the overall size of Ohio’s economy. In this context, given Ohio’s assets and labor market strengths, there can be optimism that these two industries will continue to expand employment over the next three to five years and Ohio will see the location quotient in these two sectors move from below to above one. If the location quotient of these two sectors approached the average for location quotient all of Ohio’s target industries (1.53), this would translate into the creation of more than 80,000 new jobs.

In addition to the strong growth in Ohio’s target industries in 2012 was the fact that these job gains were spread out across the state. Seventy two of Ohio’s 88 counties experienced at least some job growth in these nine target industries. In fact, some of the strongest year-over-year job gains were in rural communities which saw Ohio’s target industries collectively growing in excess of 5%. Only about 11% of Ohio’s counties saw job declines in aggregate employment in these target industries. Similarly, in the BioHealth, Energy, Financial Services, Food Processing, and Information Technology sectors, more than 75% of all Ohio counties with these industries experienced job growth in 2012. The BioHealth sector expanded last year in 95% of the counties where it was present. In the more traditional manufacturing groups—Advance Manufacturing, Automotive, Aviation and Aerospace, and Chemicals and Polymers—the employment gains were slightly more concentrated with only about two-thirds of Ohio’s counties registering employment gains in these sectors. Employment changes were the most mixed in the advanced manufacturing sector which registered job gains in 52 counties, but job losses in 34 counties.