Cincinnati: Economy

Cincinnati: Economy

Major Industries and Commercial Activity

Cincinnati's diversified economic base includes manufacturing, wholesale and retail trade, insurance and finance, education and health services, government, and transportation. Known worldwide for Procter & Gamble soap products and U.S. Playing Cards, the city ranks high nationally in the value of manufacturing shipments. Ten Fortune 500 companies have established headquarters in Cincinnati: AK Steel (steel manufacturer), American Financial (financial services), Ashland Inc. (chemicals), Cinergy Corp. (public utilities), Federated Department Stores (retail stores), Fifth Third Bancorp (financial services), The Kroger Co. (grocery stores), Omnicare (pharmacy services), Procter & Gamble Co. (consumer goods), and Western & Southern Financial (financial services). More than 360 other Fortune 500 companies maintain operations in Cincinnati. Retail sales in the metropolitan Cincinnati area average $2.8 billion annually.

More than one thousand area firms have contributed to Cincinnati's position as an international trade center, generating approximately $6.7 billion in sales to markets outside the United States each year. Foreign investment in the local economy is substantial; more than 300 Cincinnati-area firms are presently owned by companies in Asia (especially Japan), Europe (especially France, Germany, and the United Kingdom), Canada, South America, and Africa. Among these companies are: AEG, Bayer, Faurecia, Krupp-Hoesch, Mitsubishi Electric, Siemens, Snecma, Sumitomo Electric, Toyota Motor Mfg.-North American Headquarters, and Valeo. Toyota, one of Cincinnati's largest employers, chose the greater Cincinnati area for its North American manufacturing plant because, in the words of its Senior Vice President of Corporate Affairs, Dennis C. Cuneo, "The area has an excellent transportation system, a world-class airport, an excellent quality of life and a positive business climate." In 2003, Expansion Management magazine ranked Cincinnati 11th for European investment.

Federal agencies with regional centers located in the city are the United States Postal Service, the U.S. Internal Revenue Service, the U.S. Environmental Protection Agency, and the National Institute for Occupational Safety and Health.

The University of Cincinnati, the city's largest employer, has an economic impact of more than $3 billion.

Items and goods produced: aircraft engines, auto parts, motor vehicles, chemicals, valves, alcoholic beverages and soft drinks, food and kindred products, playing cards, drugs, cosmetics, toiletries, detergents, building materials, cans, metalworking and general industrial machinery, toys, apparel, mattresses, electric motors, robotics, electronic equipment, housewares, shoes, printing and publishing

Incentive Programs—New and Existing Companies

Greater Cincinnati offers a wide range of economic development assistance programs to businesses planning to expand or locate new operations within the 13-county region.

Local programs

Local organizations offer assistance for small businesses, women, and minority business owners. One such organization, the Cincinnati Business Incubator (CBI), specializes in assisting woman- and minority-owned small businesses operating—or seeking to start a business—in designated Empowerment Zones. CBI offers training and workshops that focus on business skills and profit building.

State programs

In Ohio, incentive programs are administered by the Ohio Department of Development, which operates a system of regional development offices. Incentive programs in Ohio include enterprise zones, Community Reinvestment Areas, job creation and training tax credit programs, and a variety of loan programs, as well as machinery and equipment tax credits; research and development, warehouse, and manufacturing equipment sales tax exemption; storage-only warehouse property tax exemption; and tax increment financing.

Job training programs

The City of Cincinnati Employment and Training Division oversees vocational, life, and pre-employment skills training and job placement employment initiatives. Cincinnati Works focuses on four service areas: job readiness, job search, retention, and advancement. Great Oaks Center for Employment Resources offers customized training and services to meet the needs of companies. Services and programs include: Comprehensive vocational assessment, employee assessment, employment services, professional development, job profiling, return to work services, workplace programs, and customized training. TechSolve, a non-profit organization for manufacturers, offers help with change in manufacturing operations; its training programs aim to maintain a high performance workforce.

Development Projects

The Dr. Albert B. Sabin Cincinnati Convention Center expansion, scheduled for completion in 2006, is projected to have an economic impact of $417 million. The expanded 750,000 square foot center will feature nearly 200,000 square feet of exhibition space. Major developments completed in Cincinnati in recent years include the new home of the Bengals, state-of-the-art Paul Brown Stadium, opened in 2000; and the new home of the Reds, the Great American Ball Park, opened in 2003. Hallmarks of a rebirth of the city's riverfront, the Stadium forms the western anchor of this revitalized area, while the Ball Park forms the eastern anchor. Development of The Banks, a 15-acre, 24-hour urban neighborhood of restaurants, clubs, offices, apartments and homes with sweeping skyline views, has begun to unfold near the Stadium. The Banks is projected to have an economic impact of $1.9 billion. Other developments include the opening of the National Underground Railroad Freedom Center in 2004. This new museum offers lessons on the struggle for freedom, and celebrates Cincinnati's role as a transit point for runaway slaves in the mid-1800s. Another museum, the Rosenthal Center for Contemporary Art, opened in 2003.

Economic Development Information: Ohio Department of Development, PO Box 1001, Columbus, OH 43216; telephone (800)848-1300

Commercial Shipping

The Greater Cincinnati Airport pumps approximately $4 billion into the local economy; contributing significantly to the region's transportation system, it is considered a major inducement in attracting new industry. The airport is the primary U.S. hub for DHL Worldwide Express, which ships one million pounds of cargo from the airport daily. The area has two foreign trade zones, one in Hamilton County and the other in Boone County, Kentucky near the international airport. Greater Cincinnati has the fifth largest inland U.S. port for domestic loads, with approximately 52.3 million tons of cargo transported annually through Cincinnati on the Ohio River system.

All major markets are easily reached from Greater Cincinnati via interstate. Three interstates (I-71, I-74 and I-75) link Cincinnati with the nation, while I-70, 55 miles to the north, links the east and west coasts. Twenty major metropolitan areas are served by one day's trucking service and another 30 metropolitan areas are within two days. Three major railroad systems—CSX Transportation, Norfolk Southern Corp., and Conrail—serve the region.

Labor Force and Employment Outlook

More than 1.56 million workers live within 50 miles of downtown Cincinnati. Graduates from the colleges and universities within a 200-mile radius add more than 100,000 young professionals to the workforce each year. The region is noted for its strong work ethic, which translates into a workforce that is productive, responsible, and dedicated. The city has been successful in attracting new business including company headquarters in recent years, and considers itself well positioned for further economic growth, citing its outstanding airport service, high worker productivity, and quality of life among other positive factors. Among the rapidly growing sectors of the area's economy are high-tech manufacturing, aerospace (in 2003, the Cincinnati-Dayton corridor was awarded $2.5 billion in defense spending and $1.4 billion in U.S. defense projects), automotive manufacturing, and life sciences. Long-term labor market projections are available at the Chamber's web site for industry employment, occupational employment, and labor force size. Projected annual job openings by occupation, reflecting employment growth, and replacement needs are included.

The following is a summary of data regarding the Cincinnati-Middletown metropolitan area labor force (2004 annual averages):

Size of non-agricultural labor force: 1,021,800

Number of workers employed in . . .

construction and mining: 52,700

manufacturing: 125,700

trade, transportation and utilities: 208,100

information: 16,300

financial activities: 65,000

professional and business services: 144,700

educational and health services: 130,300

leisure and hospitality: 102,700

other services: 42,500

government: 133,900

Average hourly earnings of production workers employed in manufacturing: $15.94

Unemployment rate: 6.2% (February 2005)

Largest employers	Number of employees
University of Cincinnati	15,400
Kroger Company	13,000
The Procter & Gamble Company	13,000
Toyota Motor Manufacturing North America Inc.	8,360
Fifth Third Bank	7,800
Cincinnati Public Schools	7,335
City of Cincinnati	7,223
Trihealth, Inc.	7,055
Cincinnati Children's Hospital Medical Center	7,029
Mercy Health Partners	6,785

Cost of Living

The following is a summary of data regarding several key cost of living factors in the Cincinnati area.

2004 (3rd Quarter) ACCRA Average House Price: $210,949

2004 (3rd Quarter) ACCRA Cost of Living Index: 93.8 (U.S. average = 100.0)

State income tax rate: Ranges from 0.742% to 7.5%

State sales tax rate: 5.0%

Local income tax rate: 2.1%

Local sales tax rate: 1.0%

Property tax rate: ranges from $61.66 to $133.45 per $1,000 of assessed valuation; assessed at 35% of market value (Hamilton County)

Economic Information: Greater Cincinnati Chamber of Commerce, 441 Vine Street, Suite 300, Cincinnati, OH 45202; telephone (513)579-3100; fax (513)579-3101