Following is the text of my 15th annual economic forecast for the Columbus MSA, released January 8, 2014, at the Columbus Metropolitan Club. For a PDF of the forecast document, please send an email to bill.lafayette at att dot net.
Columbus MSA employment growth will continue in 2014 with an above-average net gain of 18,200 (1.9%).
The national and local economies will continue their gradual strengthening. U.S. employment growth is expected at around 1.6%. Ohio will continue to underperform, with job growth burdened by increasing reliance on technology in manufacturing and slow population growth.
MSA growth in 2013 (as currently estimated) was 1.3% versus the 1.6% national average. However, this estimate is preliminary and may well be revised upward in new estimates due in March. The forecast assumes this, and that 2014 employment growth will be only somewhat better than the revised 2013 rate.
Regional employment has increased 7.7% since the Jan. 2010 employment trough, better than Ohio (3.7%) or the U.S. (5.7%). Central Ohio recovered the last of 53,000 jobs lost in the recession in March 2012; employment is now 16,000 jobs above its December 2007 peak. The U.S. will likely surpass its previous high in mid-2014. Ohio, however, has to date recovered only 49% of its 414,000-job loss. Thus, it will be several years at least before Ohio recovers all of these lost jobs.
Construction jobs have increased 16.9% since Jan. 2010, douple the U.S. average. Multi-unit residential properties have been an especially important contributor to regional construction activity. 2014: Gain of 1,200 jobs (4.1%)
Manufacturing: Employment increases earlier in the recovery have abated as producers substitute technology for labor. The manufacturing companies are healthier than the stagnant employment suggests. 2014: Gain of 100 jobs (0.1%)
Wholesale employment growth has been extremely strong, but may be overestimated. The forecast expects slower growth in 2014, but still above average. 2014: Gain of 1,000 jobs (2.6%)
Retail: The large decrease in the preliminary employment figures for 2013 will likely be reduced or eliminated in the revisions. The forecast calls for a healthy increase in 2014. 2014: Gain of 2,300 jobs (2.4%)
Transportation and utilities: After a slow start in the early stages of the recovery, this crucial sector enjoyed above-average growth in 2013. Growth will continue stronger than average in 2014. 2014: Gain of 1,300 jobs (2.9%)
The publishing segment of information has experienced fundamental challeges to its business model, leading to more than a decade of sustained employment declines. 2014: Loss of 200 jobs (1.5%)
Financial activities: The improving economy and real estate market will generate increasing demand for financing, insurance underwriting, and real estate services. 2014: Gain of 1,100 jobs (1.5%)
Professional and business services: The estimates implying a net decline in the professional and technical services segment in 2013 are likely incorrect. The forecast predicts fairly strong growth in 2014. 2014: Gain of 4,500 jobs (2.8%)
Education and health services: Growth of both private education services and healthcare has been twice the U.S. rate since 2010. Continued growth is likely in 2014, but at some point the rate must slow. 2014: Gain of 4,200 jobs (2.9%)
Columbus leisure and hospitality employment has grown at a rate greater than average since 2010. Though slightly slower, above-average growth will continue in 2014. 2014: Gain of 2,800 jobs (2.9%)
Other services: The 2013 decline in this sector may have been a correction of the very strong growth in 2012. Growth near the U.S. average is expected for 2014. 2014: Gain of 300 jobs (0.7%)
Government employment suffered its second consecutive net decline in 2013, a record unmatched since the early 1980s. The coming year is likely to see a third decline. 2014: Loss of 300 jobs (0.2%)
Federal government employment has been in decline since its Census-fed 2010 peak. Nationally, postal jobs have been falling since 1999, while military jobs declined last year. 2014: Loss of 400 jobs (2.6%)
The share of Ohio’s state government employment located in the Columbus MSA has been increasing since 1989 and is now at its highest level since 1965. This consolidation is likely to continue, leading to a local employment increase despite a statewide decline. 2014: Gain of 1,000 jobs (1.4%)
Local governments in the region have shed 5,000 jobs since November 2008. The majority of these losses have been felt in non-education government services. 2014: Loss of 900 jobs (1.2%)