I N S I G H T F R O M O H I O B U S I N E S S L E A D E R S

PROSPERITYPULSE

S U M M A RY R E P O RT 4 Q | 2018

Thank you for participating in the Ohio Chamber Research Foundation’s 4th Quarter 2018 Prosperity Pulse survey. The quarterly survey is an invaluable opportunity to hear directly from business leaders across the state regarding not only the current conditions of Ohio’s economy, but expectations for the future, and would not be possible without your participation.

This quarter saw the Prosperity Pulse drop from its previous record high of 139.9 in 3Q down to 103.5, a figure that still indicates “above average” economic conditions but gives reason to take a closer look as to what may have caused such a sharp drop.

The data shows that two main factors are most attributable to the decrease in the Prosperity Pulse index. The first is a reduction in future planned capital expenditures. Where in 3Q, 72% of respondents said they were planning on capital expenditures in the next three months, only 15% said the same in 4Q. The second is a decrease in companies with reported job openings. Where 35% of firms indicated they had either skilled or unskilled positions open in 3Q, just 10.5% of firms reported open positions in 4Q.

While we don’t know with certainty what may have caused those shifts, there may be a few clues regarding a changing political environment and poor stock market performance. The November elections led to divided control of Congress, creating uncertainty that may have caused most business owners to put capital projects and hiring on hold until some of the initial dust had settled in Washington. The first political skirmish of the new Congress led to the partial federal government shutdown, over which negotiations extended through the entire window of the survey period and thus may have led to concerns about further instability. Widespread hesitation in the stock markets, due in part to reports of a rough holiday retail season that turned out not to be true, ended with the worst December market performance in history.

The cost of healthcare, employee benefits and the impact of taxes remain among the top concerns of business leaders in Ohio. However, several bright spots can still be found throughout the survey: Every respondent (100%) indicated they added jobs in 4Q AND planned to add jobs in the next quarter. Also, a strong majority of business leaders remain optimistic about the future economic health of their companies.

Please enjoy the highlights of the latest Prosperity Pulse, and again, thank you for sharing your insights!

ABOUT THE OHIO CHAMBER OF COMMERCE RESEARCH FOUNDATION

The Ohio Chamber of Commerce Research Foundation, Inc. is a 501(c)(3) nonprofit organization whose mission is to provide non-partisan, educational resources on public policy issues that may impact Ohio’s economy, job creation, and long-term competitiveness.

H I G H L I G H T S | 4Q | 2 0 1 8

Highlights ...........................................................................2

Survey Results ............................................................3-6

Demographics ............................................................7

2

S U RV E Y R E S U LT S | 4Q | 2 0 1 8

THE PROSPERITY PULSE INDEXThe Prosperity Pulse is an index measurement of the economic health of Ohio companies, taking into consideration the future outlook of five key indicators: profits, employment levels, unfilled openings, capital expenditures, and overall economic optimism.

<100Below Average

100Average

>100Above Average

1 00 = Ave rage Economic Conditions

1Q 2017

100

2Q 2017

102

3Q 2017

100

4Q 2017

108

1Q2018

116.3

2Q 2018

115.6

103.5

4Q 2018

3Q 2018

139.9

Prosperity Pulse Components 4Q Positive Change from 3QAnticipated Profits 25% -23

Plans to Add Jobs 100% +2

Unfilled Jobs 11% -24

Planned Capital Expenditures 15% -57

Overall Economic Outlook 40% -9

3

S U RV E Y R E S U LT S | 4Q | 2 0 1 8

OPTIMISMPercentage of business leaders that are OPTIMISTIC about the future economic health of their company:

1Q 2017

2Q 2017

3Q 2017

4Q 2017

1Q2018

2Q 2018

3Q 2018

4Q 2018

69% 74

%

71% 74

%

92%

91%

91%

91%

49.5%GOOD

21.3%EXCELLENT

19.9%FAIR

9.3% POOR

ECONOMIC CLIMATEPercentage of business leaders that say the economic climate is…

4

S U RV E Y R E S U LT S | 4Q | 2 0 1 8

TOP CONCERNS by REGION:I N O R D E R O F M O S T C O N C E R N E D

• Cost of Healthcare• State & Local Taxes• Poor Sales

• Cost of Healthcare• Competitive Business

Environment• Ohio’s Political Environment

• Ohio’s Political Environment• Attracting/Retaining

Qualified Employees• Inflation

• Competitive Business Environment• State & Local Taxes• Ohio’s Political Environment

• Cost of Healthcare• Competitive Business

Environment

NW

SW

NE

SE

C

TOP 5 CONCERNS of OHIO BUSINESS LEADERS

4Q 3Q1. Cost of Healthcare 1 <->

2. Data Security T5

3. Cost of All Employee Benefits 3 <->

T4. Ohio’s Political Environment 2

T4. State and Local Taxes 8

5

S U RV E Y R E S U LT S | 4Q | 2 0 1 8

81%excellent

or good

43%only fairor poor

NW Ohio businesses are most confident about the

coming quarter, with

51.1%expecting a

better 1Q 2019 for their company.

FINDINGS of NOTE

Employers in SE Ohio have the most aggressive hiring

plans, with

80.5% ofbusinesses indicating they

plan to add more than 25 employees in the next

quarter.

53.3%of wholesale

businesses saw increased profits

in 4Q vs the previous quarter.

Demand for employees continues to remain strong in the

HEALTHCARE sector, with

50%reporting open positions in 4Q.

LEAST satisfied

MOSTsatisfied

THE NATION COMPARED TO OHIOMost Important Issue Is…

National Comparison: NFIB Research Foundation Small Business Optimism Index, January 2019

ISSUE NATION OHIOQuality of Labor 23% 10% (5th)

Taxes 15% 10% (4th)

Government Regulations 12% 12% (2nd)

Region of the state most satisfied with the overall economic conditions?

Southeast Ohio 81% excellent or good

Least satisfied? Northeast Ohio 43% only fair or poor

6

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Util

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Cons

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Man

ufac

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Who

lesa

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Reta

il

Tran

spor

tatio

n/W

areh

ouse

Info

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ion

Serv

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Fina

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Insu

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Real

Est

ate

Prof

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/Tec

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al

Educ

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Hea

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3.4%

1.2%

1.0%

11.5%

9.1%

3.7%

15.9

%

4.4%

.5% 3.7%

3.7%

13%

.7% 2.5%

25.7%

SURVEY PROFILEThe Ohio Chamber of Commerce Research Foundation partnered with Clout Research to conduct the Prosperity Pulse, a quarterly survey of business leaders in various sectors across the State of Ohio regarding the strength of their companies and the state economy.

The survey included 408 respondents who completed survey interviews online and on the telephone with live agent interviewers between January 28 and February 10,2019. It carries a confidence interval of 95% and a margin of error of +/- 4.75 percentage points.

D E M O G R A P H I C S | 4Q | 2 0 1 8

INDUSTRY SECTOR

Under $500k 58.0% $500k-$999k 19.7% $1M-$5M 17.4% $6M-$10M 2.5% $11M-$50M 0.7% $51M-$100M 0.7% $101M-$500M 0% $501M-$999M 0.5%

$1B+ 0.5%

BY COMPANY GROSS REVENUE REGION

NW

NE

C

SW

SE

11.5%

28.7%

19.9%

29.9%

10.0%

Note: 0.2% declined to answer

BUSINESS LEADERS PARTICIPATING IN 4Q PROSPERITY PULSE SURVEY:

7

CONNECT with US

in

@OCCResearch

www.facebook.com/occresearch

Ohio Chamber of Commerce Research

Foundation

34 S. Third Street, Suite 100 | Columbus, Ohio 43215research@ohiochamber.com

614.629.0921

www.ohiochamberfoundation.com

C O N N E C T | 4Q | 2 0 1 8