OHIO: An Introduction to Ohio
Overview
Stakeholders in the construction industry are managing the increasingly complex and costly challenges associated with major projects, facilities, skilled labor forces, suppliers, and real estate.
The acceleration of public infrastructure projects together with other government manufacturing initiatives throughout the Midwest, is creating healthy demand – and exerting some longstanding pressures – on the construction industry in Ohio.
Skilled labor shortages, supply chain difficulties, and shortages of certain raw materials continue to create significant project challenges and threaten long-term productivity of the industry. And construction has been historically slow to adopt new technologies, such as 3-D printing, the use of drones and other forms of artificial intelligence and modeling tools that can improve efficiency.
Major Financial Investments Are Dotting Ohio
Against this challenging backdrop, sweeping construction projects are underway in Ohio.
Two of the biggest employers in Northeast Ohio plan major investments – the Cleveland Clinic (63,190 fulltime employees worldwide) and the Sherwin-Williams Company (57,231 fulltime employees worldwide).
In May 2022, the Cleveland Clinic announced a USD1.3 billion capital investment in its main campus. Projects include a 1 million-square-foot Neurological Institute building, expansion of the Cole Eye Institute building, and significant growth of research facilities by way of the Clinic’s USD300 million investment in the Cleveland Innovation District (a collaboration with universities and other hospitals to create jobs and an educated workforce). Also on the drawing board: adding a 400,000-square-foot research center to position Northeast Ohio at the forefront of the pathogen research vital to preparing for the next pandemic.
The Clinic also is collaborating with community partners to bring a USD52.8 million Meijer grocery market and apartment complex aimed at lessening food insecurity and revitalizing its surrounding neighborhood.
Sherwin-Williams is in the midst of building a new headquarters tower on Public Square in downtown Cleveland, with an attached multi-level garage, as well as a research and development center in the suburb of Brecksville.
The 36-floor headquarters will house more than 4,500 employees – professional staff, engineers, technicians, and chemists – with room to accommodate future growth. Sherwin-Williams says the project will entail a minimum investment of USD600 million over the next few years.
Major projects are making headlines elsewhere in Ohio, as well.
Intel plans to spend USD20 billion on two advanced chip factories in Licking County, just outside Columbus. The project is the largest single private-sector investment in Ohio’s history. It’s expected to create 3,000 Intel jobs, and 7,000 construction jobs over the course of the build. The nearly 1,000-acre site has room for some eight chip factories. If it reaches full capacity, the investment could grow to as much as USD100 billion over the next decade, making it one of the largest semiconductor manufacturing sites in the world.
The J.M Smucker Co., a leading food manufacturer headquartered in Northeast Ohio, plans a 29,000-square-foot research and development lab at its campus in Orville. Abbott selected a site in Bowling Green for a new manufacturing plant for nutritional products. And the clinical research company Medpace plans a USD150 million operations and office expansion at its Cincinnati headquarters.
Automakers, meanwhile, are doubling down on Ohio in anticipation of an electric vehicle future.
Ford Motor Co. announced in June that it plans a massive expansion to make electric vehicles at its Ohio Assembly Plant in Lorain County. The USD1.5 billion project is expected to add 1,800 jobs, twice the plant’s current workforce.
General Motors plans a USD760 million investment in its Toledo transmissions plant as it gets the facility ready to manufacture drive units for future GM- EV trucks. It will be the automaker’s first US power train facility to convert to producing electric vehicle-related products.
Honda is building a USD3.5 billion joint-venture electric vehicle battery factory at a huge Fayette County site, a project expected to create 2,200 jobs.
Federal Funds for Ohio – Bipartisan Infrastructure Law
The Bipartisan Infrastructure Law, signed by the president in late 2021, has identified over 150 specific Ohio projects for funding.
Across the state, there are 1,377 bridges and over 4,925 miles of highway in poor condition. Ohio is set to receive more than USD4.3 billion to invest in roads, bridges, public transit, ports, and airports, and over USD240 million for clean water projects
As more projects are announced in coming months, the federal investment in Ohio roads and bridges is projected to ramp up to USD9.8 billion. Ohio also is in line for a minimum of UDS100 million to help ensure high-speed internet coverage across the state. And more than USD131 million was allocated to Ohio in 2022 for pollution cleanup, such as capping orphaned oil and gas wells and reclaiming abandoned mine sites.
Looking Ahead
Going forward, the jury is out with respect to the extent to which an uncertain economy and high interest rates will impact the more ambitious project plans in Ohio, especially in the private sector.
However, government funding from the Bipartisan Infrastructure Law, the Chips and Science Act (which provides USD280 billion in new funding to boost domestic research and manufacturing of semiconductors in the USA), and the Inflation Reduction Act (designed to curb inflation by reducing the deficit, lowering prescription drug prices, and investing in domestic energy production while promoting clean energy), will likely keep the construction industry in Ohio on steady ground for several years to come.