Presented by Erik Dunnigan, Deputy Secretary

Kentucky Cabinet for Economic Development

Kentucky’s Global Economy

UNEMPLOYMENT RATE EDGES DOWNWARD

• Added 271,000 jobs in October

• Rate drops from 5.1% to 5%

• Lowest rate since April 2008

EXPORTS INCREASE AND IMPORTS DECREASE

• International trade balance improves by

$7.2 billion

• GDP growth continues at 1.5%

U.S. ECONOMIC INDICATORS IMPROVING

As the world’s second-largest economy, China’s output and consumption rates impact global manufacturing.

PRESSING INTERNATIONAL FACTORS

6.5

7

7.5

8

12 13 14 15

Economic Growth Rate

CHINA

%

%

%

%

STOCK MARKET: WORLDWIDE DROP

Hang Seng

Nikkei

Dow

DAX

FTSE

MAJOR INDICES FELL IN THIRD QUARTER 2015 Markets have experienced increased volatility since

05,000

10,00015,00020,00025,00030,000

HESITANCY ON THE NATIONAL SCALE

Citing recent

market turmoil,

the Federal

Reserve

kept its

federal funds rate

near zero

last quarter.

Kentucky Economic Activity

GOVERNOR’S CUP - 2014

> KENTUCKY #1 NATIONALLY PROJECTS PER CAPITA

> KENTUCKY 6th OVERALL IN PROJECT ACTIVITY

1 Texas 26,448,193 2 of 50

2 Ohio 11,570,808 7 of 50

3 Illinois 12,882,135 5 of 50

4 N. Carolina 9,848,060 10 of 50

5 Georgia 9,992,167 8 of 50

6 KENTUCKY 4,395,295 26 OF 50

2014

Rank State Population Population Rank

Economic Momentum

Kentucky’s jobless rate in September 2015 was 5%, the LOWEST SINCE 2001.

$6.4 billion investment Jan. 2014 – Oct. 2015, creating nearly

23,000 jobs

Kentucky’s GDP grew faster than the U.S. 2007-2015 and economic activity is

the highest ever.

5%

More than 250 location and expansion projects announced through Oct. 2015.

Source: U.S. Bureau of Labor Statistics

NEW vs. EXPANDING INDUSTRY

ANNOUNCEMENTS 2009 - Oct. 2015

15%

85%

Project Announcements

New Location Expansion

30%

70%

Jobs New Location Expansion

18%

82%

Investment New Location Expansion

THE RURAL IMPACT

49%

Announcements

40%

Jobs

44%

Investments

970 of 2000

TOTAL PROJECTS 2009 - Sept. 2015

$7.87 billion of $17.78 billion 31,809 of 80,228

Investment by Sector – 2009 – Oct. 2015

$966,020,809 | 129 ANNOUNCEMENTS

Chemical

Plastics & Rubber

Machinery Manufacturing

Food & Beverage

Motor Vehicle-Related

Distribution & Logistics

Research & Development

$1,739,715,561 | 110 ANNOUNCEMENTS

1,996,845,578 | 218 ANNOUNCEMENTS

$351,997,498 | 127 ANNOUNCEMENTS

$1,444,869,442 | 173 ANNOUNCEMENTS

$1,821,727,031 | 168 ANNOUNCEMENTS

$5,685,160,674 418 ANNOUNCEMENTS

MANUFACTURING INDUSTRY EMPLOYMENT

Kentucky's industry employment grew by 12.2%

Nationally, industry employment

increased 5.7% from 2010-2014

5.7% 12.2%

AUTOMOTIVE INDUSTRY EMPLOYMENT

Kentucky's industry employment grew by 72%

Industry employs 85,552 workers at 470+ establishments in Commonwealth

Nationally, industry employment fell 26% since 1990

Assembly plant employment INCREASED 46%

Parts manufacturing INCREASED 87%

Body and trailer manufacturing INCREASED BY 110%

26%

72%

Expanding Global Opportunities

447 Internationally

owned

facilities

International Influence

33 Nations

89,500 Employees

of Kentucky’s announced investment

came from foreign direct investment

in 2014

30%

The percentage of Kentucky’s new jobs in 2014

from FDI

20%

THE STATE OF FOREIGN DIRECT INVESTMENT

IN KENTUCKY

$2.3

$27.7 billion in 2014

191 countries

Supports 125,000

Kentucky jobs

Through September 2015, 4.5

percent ahead of September last year

On pace for $28 billion

in 2015

Shattering Export Records

for 5 Years

billion

$7.6 billion $2.3

billion

$1.7 billion

China

United Kingdom

Mexico

Canada

$2 billion

France

ENTREPRENEURSHIP

CREATING A CULTURE

OF

Kentucky’s State of Entrepreneurship

The State Entrepreneurship Index (SEI) reflects a state’s entrepreneurship environment, growth in business formation and technological innovation. In just one year, Kentucky rose 45 spots to No. 4 nationally.

> The Office of Entrepreneurship and the Kentucky Innovation Network assisted more than 1,200 Kentucky clients between Jan. 2014 and Oct. 2015 with a variety of services, including:

Small Business Tax Credit

Angel Investment Tax Credit

Angel Investors Network

Small Business Credit Initiative

Commonwealth Seed Capital Investors Summit

Entrepreneur Pitch Competition

Idea State U

Governor’s School for Entrepreneurs

KENTUCKY INNOVATION NETWORK

SMALL BUSINESS ASSISTANCE

Kentucky Small

Business Tax Credit

$1 million in tax

credits have been awarded

40% awarded to small

businesses in rural counties

Kentucky Small Business

Credit Incentive

$10.1 million in loan support

$89.3 million leveraged

64% awarded to small

businesses in

rural counties

YOUTH DEVELOPMENT

NETWORK-

SPONSORED

EVENTS

IDE

A S

TA

TE

U

GOVERNOR’S SCHOOL

FOR ENTREPRENEURS

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Creating Workforce Solutions

Kentucky’s Unemployment Rate September Unemployment Rates in KY

5.5

7.1

10.7

10.0 9.2

8.1 7.9

5.8

5.0

2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: U.S. Bureau of Labor Statistics

Kentucky’s Employment vs. Unemployment June Employment/Unemployment in KY

2007 2008 2009 2010 2011 2012 2013 2014 2015

Unemployment 101,857 133,284 207,607 196,583 186,986 160,173 158,695 109,423 88,140

Employment 1,923,112 1,898,619 1,844,842 1,854,744 1,871,803 1,902,313 1,897,634 1,875,377 1,840,833

1,700,000

1,750,000

1,800,000

1,850,000

1,900,000

1,950,000

2,000,000

2,050,000

2,100,000

Total Workforce

Employment

Source: U.S. Bureau of Labor Statistics

Total Workforce 2,024,969 2,031,903 2,052,449 2,051,327 2,058,789 2,062,486 2,056,330 1,984,800 1,928,973

FILLING THE SKILLS GAP

With U.S. economic growth

on a firmer footing, and demand

ticking up, the AVAILABILITY OF

SKILLED LABOR has become

the #1 factor in site decisions, according to the latest survey of company

executives by Area Development magazine.

125 Company Members 75 Companies currently

sponsoring students 147 Current Students 65 Graduates

Owensboro

Florence

Bowling Green

Somerset

Mayfield

Hopkinsville

Madisonville

Elizabethtown

Springfield

Georgetown

Danville

Louisville

Maysville

Pikeville

Shelbyville

Budget Expenditures & Projections

Personnel

GROWTH PLANS

Next Biennium Potential Request (FY 16-17 and FY17-18)

Personnel/staff

Marketing

International business

Office of Entrepreneurship grants

Operating costs

Personnel & Partnerships

Entrepreneurship / Business

Development

International

Workforce

Marketing

Next Biennium Potential Request (FY 16-17 and FY17-18)

THANK YOU