What’s wrong with Columbus manufacturing?
One of the under-reported stories of the employment recovery that began early last year is the first sustained growth in manufacturing employment in a decade and the strongest growth in 15 years or more. (The reasons for that are a topic for a future post.) U.S. manufacturing employment is up 2.4 percent since the beginning of 2010 and Ohio has been even stronger — up 3.1 percent. This strength has spread to other sectors of the state’s economy, including wholesale trade and business services, with the result that Ohio’s overall net job growth has been 1.9 percent, better than the Columbus MSA’s 1.7 percent and the 1.6 percent national average.
But the Columbus MSA’s manufacturing sector has been a real wallflower; employment as of September was a quarter percent lower than it was in January 2010. What is the problem? The job numbers that we get every month from the U.S. Bureau of Labor Statistics aren’t nearly detailed enough to give us an answer, but another BLS series comes to the rescue: the Quarterly Census of Employment and Wages. This is an extremely detailed count of jobs down to the county level. These numbers are only available annually for detailed industries, but we can get at an answer by comparing 2010 employment (the first year of the recovery) to that in 2009 (the last year of the slump).
The table below shows the results. Even though this comparison fails to pick up the employment revival, it still shows Ohio better than the U.S. average and Columbus worse. Looking down these comparisons, there is some good news — notably in chemicals, plastics, and nonmetallic mineral (e.g., glass and clay) products. Each of these is an economic driver for the Columbus economy. On the other hand, there are several industry groups with double-digit percentage losses locally. But as the numerical changes reveal, these are generally small industries that don’t have a great impact. But transportation equipment manufacturing is different. It is our single largest manufacturing driver with nearly 13,000 jobs in the region (not counting those just over the Logan County line). But it has been seriously underperforming and is responsible for nearly half of the region’s manufacturing job decline. Ohio, on the other hand, did far better than average. (Recall that this was before the Japanese tragedy disrupted supply chains.) If not for this one industry, the Columbus MSA’s job loss would have been equal to the national average.
There are 71 transportation equipment plants in the MSA; this industry contributed nearly three-quarters of a billion dollars of wages to our region’s economy in 2010. I hope that those responsible for business retention efforts in our region will engage with these firms to learn the reasons for their lack of employment growth and what we as a community can do to help.