Big economic wins in Clark, Champaign in 2016, but growth lagged Ohio

The overall economy in Clark and Champaign counties improved this year with several big expansions or new employers moving in, which has local leaders optimistic about the jobs picture for next year.

But the local growth lagged behind the rest of the state, said Bill LaFayette, owner of Regionomics, a Columbus-based economics and workforce consulting firm.

RELATED: Navistar to add 300 jobs in Springfield with second GM deal

Navistar announced a second deal with GM for a total of 600 new jobs and downtown Springfield has seen significant projects from a new brewery to artist studios and a new seniors center to EF Hutton America relocating its headquarters there. Local leaders also came together to form a nonprofit to target investments downtown.

“It’s changed the landscape of downtown,” Assistant City Manager Tom Franzen said.

And in Champaign County, KTH Parts Inc. moved forward with a major expansion, one of several significant local projects in the auto manufacturing industry, and created a new economic development partnership.

Overall, Clark County’s economy fared better in 2016 than last year, LaFayette said. He compared payroll employment data for January through October for both years. The results include residents who live in Clark County and are employed in the region.

The results showed an employment change from 50,800 to 51,000 in 2016, a roughly 0.4 percent improvement, LaFayette said. That was an improvement from last year, when payroll employment dropped by o.3 percent.

READ MORE: EF Hutton deal may spur development in Springfield

But Ohio saw growth of about 1.4 percent, he said, and the national rate was closer to 1.8 percent.

Much of the state’s improvement was found in Central Ohio, LaFayette said, and one of the challenges next year will be to find ways to balance growth throughout the rest of the state.

“That really is kind of a policy discussion,” LaFayette said. “How do you take what’s going on here in Central Ohio and spread it out more?”

One answer might be more workforce development efforts. OhioMeansJobs Clark County will roll out a $1.2 million, revamped job training program focused on young workers.

“It’s really an effort to break the cycle of poverty for thousands of Ohioans,” said Lehan Peters, deputy director of the agency.

Changes downtown

Downtown Springfield saw several major projects move forward this past year, including Mother Stewart’s Brewery, a $500,000 project to develop studio space for artists and a $6.7 million project from United Senior Services to open a new senior center at 125 W. Main St.

A large portion of the Crowell Collier Building also was demolished and EF Hutton America pledged to invest $22 million and add up to 400 new jobs in downtown Springfield over the next five years.

Clark County foundations, government agencies and private businesses have also banded together to create SpringForward, a nonprofit dedicated to targeting investments on existing properties to revitalize the city’s urban center. The non-profit has raised more than $4.8 million, and leaders are optimistic it will provide a boost to efforts to draw new investment to properties like the McAdams building, 31 E. High St.

DETAILS: $500K artist studios coming to downtown Springfield

Each of those projects may seem like a small step, but Franzen said together they start to make a difference.

“People are able now to start to see how these things are connected,” Franzen said. “That’s exciting.

Outside downtown, Franzen also pointed to a roughly $20 million proposal to build a new Kroger Marketplace on Ohio 72. The planned grocery store set to be constructed south of Interstate 70 on a former Springfield Twp. driving range is expected to bring about 350 new jobs to the city.

State and federal agencies also pledged this fall to invest $5 million into the Springfield-Beckley Municipal Airport for a project that will allow researchers to test new drone technologies, potentially making Clark County one of the only research hubs of its kind in the nation.

However, many factors, including the continued improvement in the region’s economy will be necessary for continued progress, Franzen said. City commissioners recently approved significant cuts to the budget after voters rejected an income tax increase earlier this year.

“In order to be able to continue momentum in these positive projects we’ve been able to participate in, we need to have some stabilizing funding so we can take care of the corridors, take care of the streets and take care of the neighborhoods and safety services and parks,” Franzen said. “Those are all vital components to a competitive economic development strategy and you can’t really have one without the other.”

Auto industry provides boost

Auto manufacturing was a bright spot in 2016. Navistar announced a deal with GM in June calling for Navistar workers to build a cutaway model of GM’s G Van in Springfield beginning early next year. It was the second joint agreement between the two companies.

RELATED: Honda supplier plans $24M to $34M expansion in St. Paris

The manufacturers also made a joint agreement in late 2015 to build medium-duty trucks in Springfield. Combined the two deals mean at least 600 more people are expected to work in Navistar’s Springfield plant in coming years.

Navistar got a further boost in September, when Volkswagen announced an agreement to buy a roughly 17-percent equity stake and invest about $256 million in it. The companies will also work together to develop new technologies and establish a joint procurement venture for purchasing.

KTH Parts Inc., a St. Paris manufacturing firm that makes parts for Honda, also announced a major expansion to add as many as 20 new full-time jobs, push the size of the existing facility past 1 million square feet and invest between $23 million and $34.5 million in equipment and new construction.

Officials with IHS Automotive have said combined Honda and Acura sales hit an all-time record of more than 1.58 million vehicles sold last year, a 3 percent increase over the previous year. The investment marks the third expansion at KTH in just the past few years, and company officials have said the latest improvement will solidify KTH’s competitive position through at least 2023.

And just this past week, officials in Clark County announced Topre America, an auto parts manufacturing firm, will bring 20 new jobs to Springfield and invest $10 million in a new 20,000 square-foot facility at the Champion City Business Park in Springfield.

“I don’t think it’s a flash in the pan,” said Horton Hobbs, vice president of economic development for the Chamber of Greater Springfield. “We have a steady, stable concentration of automobile suppliers and I think the last recession really taught a lot of them some valuable lessons and pushed them to diversify what they make in their plants so they can weather changes in certain markets.”

Workforce development

Officials in both Clark and Champaign counties have increasingly focused on workforce development initiatives as employers demand a skilled workforce.

OhioMeansJobs Clark County will ramp up next year an initiative that began in 2016 to provide more comprehensive services to the region’s workforce, Peters said. The state will combine funding streams from the Workforce Innovation Opportunities Act and Temporary Assistance for Needy Families programs.

Clark County should get about $1.2 million.

The Comprehensive Case Management and Employment program will focus on workers ages 16 to 24 and is based on income eligibility. The county agency will provide comprehensive case management services to identify barriers to employment, develop a plan for each individual and set short- and long-term goals to keep residents in school. The services provided could include tutoring and mentoring, as well as paid and unpaid work experiences.

“It really is putting our dollars, time and effort into each individual so that we can break the generational poverty that has plagued Clark County,” Peters said.

The Chamber of Greater Springfield will also shift more of its budget toward workforce development in coming years, Hobbs has said.

Champaign County will also continue to focus on workforce development in 2017, said Marcia Bailey, director of the Champaign Economic Partnership.

The county has focused on promoting jobs in manufacturing to area high school students, an industry she said is critical to the area’s economy. The partnership also revamped its website to provide more information to employees about the kinds of jobs available in Champaign County.

“If they can go to one site and get the information it’s going to help them in the long run,” she said of area workers.

Future economy is unclear

Local leaders should focus on finding ways for existing employers to expand in 2017, said LaFayette of Regionomics, noting that the vast majority of jobs created in Ohio in the past two decades came from existing firms.

“Internal growth is going to give you the lion’s share of what you need,” he said.

Both presidential candidates talked about major investments in infrastructure in 2017, which could provide a boost to the economy, particularly in jobs related to construction, LaFayette said. However he also has some concerns because politicians are talking about tax cuts at the same time, which could run up deficits in the long run.

“The big problem is that we’re not being asked to pay for it,” he said.

In Ohio, it’s also not yet clear what impact federal policies could have on the state if those policies lead to tariffs or trade wars. Those issues could harm Ohio’s agriculture industry in particular, he said, which makes up a large portion of the state’s economy.

“A lot of Clark County’s economy really does revolve around agriculture,” Lafayette said. “I’m all for fair trade but aggressive trade wars are not necessarily going to be good for us.”

In-depth coverage

The Springfield News-Sun will continue to provide unmatched coverage of jobs and the economy in Clark and Champaign counties. For this story, the paper spoke to local economic development officials and economists about 2016 and what residents can likely expect once the new year begins.

By the numbers

600: New jobs coming to Navistar’s Springfield plant thanks to two deals with GM

$4.8 million: Pledged by local foundations, businesses and others to create SpringForward, new nonprofit focused on downtown projects

50,800: Clark County residents working in the region in 2015

51,000: Clark County residents working in the region in 2016

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