Columbus Chamber Blog: Information about economic development, economic and business trends, Columbus workforce, programs, events and the Chamber of Commerce in and around Columbus, OH

Blue Chip Economic Forecast – Video Now Available Online and On Demand

The Columbus Chamber’s 11th Annual Blue Chip Economic Forecast drew a packed house at the Columbus Metropolitan Club last week. According to the forecast, the Columbus economy is expected to resume growth in 2010. Year-to-year net is predicted to be 0.1 percent, or 800 jobs, compared to 1.8 percent decrease in 2009.

If you weren’t able to make it to the event or just want to listen and learn again, take a look at this video from the forum—courtesy of the Ohio Channel.

You can also watch the program on Time Warner Cable’s free Local on Demand Channel 411. Simply tune to Local On Demand, select the “Local News & Info” category, and then select “Blue Chip Economic Forecast.”

The Columbus Blue Chip Economic Forecast is published by the Columbus Chamber. The forecast is a consensus derived from the independent forecasts of four area economists – Bill LaFayette, Ph.D., vice president, economic analysis, Columbus Chamber; Joseph Mandeville; George Mokrzan, Ph.D., vice president, senior economist, Huntington Bancshares, Inc.; and James Newton, Ph.D., chief economic advisor, Commerce National Bank.

A full copy of the forecast is available for download at www.columbus.org.

Columbus MSA employment continues to outperform in August

We now have preliminary August sector employment totals, labor force, and unemployment estimates for the Columbus MSA, which I have seasonally adjusted.  The news is better than that for either the U.S. or the state.  The number of jobs in the region fell by 100 – literally a rounding error – compared to losses of 0.2 percent for the U.S. and 0.6 percent for Ohio.  There was little change in individual sectors – except education and healthcare, which increased 1,200.  As was the case for the Ohio unemployment rate, the seasonally adjusted Columbus MSA rate fell.  The local rate is now 8.7 percent – a full point below the U.S. rate – versus 9.2 percent in July.  This decline was partially driven by a decline in the labor force, as was the Ohio decline, but also by an increase in the number of employed Columbus MSA residents.  Overall, once again, we don’t have really good news but things could be worse.

Unemployment in Ohio

Last week the Ohio Labor Market Information Bureau announced that the Ohio unemployment rate fell in August from 11.2 percent to 10.8 percent – its first decline since February 2006.  This seems as if it would be good news, especially because the U.S. rate rose from 9.4 percent to 9.7 percent after treading water for two months.  But this is an illustration of the complexities in interpreting the unemployment rate that I discussed here earlier.  Changes in the unemployment rate are affected both by changes in employment and by changes in the number of people actively seeking work.  At the national level, the number of people employed fell in June, July, and August.  The U.S. unemployment rate changed only marginally in June and July because a decline in the number of active job-seekers offset the decline in the number employed.  In August, U.S. employment declined but the number of those looking for work did not decline, so the unemployment rate rose.  Here in Ohio, employment fell somewhat last month but the number of job-seekers fell a lot, producing a decline in the unemployment rate despite the decline in the number of people working.

Columbus Region InSite Tool Launches on ColumbusRegion.com

In case you missed the announcement in the Chamber's monthly email, be sure to check out the region's new GIS tool:

The Columbus Chamber has recently relaunched an upgraded Geographic Information System (GIS) on its economic development site, ColumbusRegion.com, an online tool for both current member companies and businesses that are looking to relocate from outside the Columbus region.

These enhanced tools will aid in the Chamber’s efforts to attract new capital investment, while optimizing site selection opportunities, making Columbus a more competitive option for prospective businesses.  GIS allows users to quickly and easily find the ideal location for their business within the eight-county Columbus region, as well as access overlays of demographic data by county. If a member business has grown and needs a larger space or a relocating business needs to be close to a highway or an airport, they can use GIS to identify a specific building that will suit their needs.

This tool goes far beyond a simple database of available sites and buildings. It provides the information and analysis businesses require to identify geographic advantages and business opportunities in our region. Buildings and sites are available throughout the nation. What makes the Columbus Region attractive to business is highly related to our location-specific advantages, which can be accessed online through Columbus Region InSite. If you have any questions about using the GIS tool, or would like assistance finding a site for your company or other information about doing business in the Columbus Region like comparative demographic analysis, please contact our economic development team at the Chamber.

Press Release: Columbus Chamber Reports Relatively Stable Second Quarter Employment - Columbus MSA Continues to Outpace National Average

COLUMBUS, OH, August 17, 2009 /24-7PressRelease/ -- The Columbus Chamber of Commerce is proud to announce second quarter statistics show the Columbus employment rate is stabilizing and continues to outpace the national average. The unemployment rate in Columbus is at 8.9 percent: far less than Ohio's 11.1 percent average, and still below as the national unemployment average, at 9.5 percent.

In fact, private education and healthcare have continued to experience a sharp rise, and government also reversed some of its earlier losses. Plus, education and healthcare are expected to continue enjoying large increases.

"Education and health services employment is more than 80 percent healthcare," Vice President of Economic Analysis Bill LaFayette, Ph.D. said. "This is the one sector whose growth has continued unabated during the recession - despite legitimate concerns over the ability of patients to pay for their care. Growth is expected to continue in the second half of the year."

The Columbus Chamber reports transportation and utilities also experienced growth of 44 percent between early 2001 and the beginning of the recession. The sector's decline early in the recession was worse than the national average, but the trend turned slightly positive at the beginning of the year. Assuming that growth does not deteriorate significantly, the comparison to 2008 for the full year should be much better than that for the first six months.

Professional and business services also experienced employment growth far stronger than the national average over the past seven years, and declines in the recession have been less than one-fifth the national average. Each of the three subsectors has performed much better than average since the beginning of the recession.

"This sector should be one of the first to benefit from economic recovery given its labor intensiveness and the likelihood of employers to increase their hiring of temporary employees as a response to early increases in demand," LaFayette said.

Leisure and hospitality employment declines in the Columbus Metropolitan Statistical Area (MSA), including Delaware, Fairfield, Franklin, Licking, Madison, Morrow, Pickaway, and Union Counties, have been less than average since the beginning of the recession. Statewide employment growth has been slightly positive, despite some weakening in recent months. Along with retail, local restaurants have benefited from the stronger-than-average Columbus MSA economy, while hotels in Columbus and elsewhere in Ohio, have benefited from the tendency of travelers to stay closer to home.

Other services - including various personal services, religious organizations, and professional and social associations - along with education and health services are experiencing higher employment now than at the beginning of the recession. Although the budgets of nonprofits have come under pressure, the services sector was growing much more weakly than average for several years before the recession hit.

The news is not all positive. Despite the marked economic growth reported by the Columbus Chamber, the implied Gross Domestic Product (GDP) decline would rank this recession as one of the two worst of the postwar period; its length is far greater than any of the 10 previous postwar recessions. U.S. employment is expected to decline through the year and into 2010, though at a much smaller rate. It is predicted that the national unemployment rate will reach 10 percent by December 2009 and will still be at 9.5 percent in December 2010.

More than two-thirds of the 51 economists in The Wall Street Journal's monthly survey expect the recession to end no later than the third quarter, with modest output growth in the second half of 2009.

For more information about the Columbus Chamber's economic update, visit www.columbus.org.

About the Columbus Chamber of Commerce
The Columbus Chamber of Commerce leads and supports economic growth and development in the Greater Columbus community. It supports a membership of 2,700 businesses. Learn more about Columbus at www.columbus.org.

Chamber Economist, Bill LaFayette Featured on Columbus Underground

Check out Walker's interview with Bill on the Columbus Underground:

An excerpt from the interview is included below:

We recently sat down with Dr. Bill LaFayette, Ph.D., the Vice President of Economic Analysis at the Columbus Chamber of Commerce, to discuss a variety of topics related to the Columbus economy. Bill shares with us his professional insight and research on some of the most important job sectors in the region, the growing importance of the creative class and urban renewal, and his thoughts on how Columbus is weathering the current economic recession. The full interview on the Columbus economy can be found here.


For more insights on the Columbus MSA economy, read Bill's series of posts here.

Foreclosures and house prices

The Columbus Dispatch reported Thursday that Ohio foreclosures have declined for three consecutive months while they continue to rise nationally.  The experts are not sure whether this is a real turn in the trend or just a temporary break in a downward trend.  While foreclosures are likely to continue to be a serious problem for Ohio communities and neighborhoods, there are reasons to think that the situation in other states will be worse.

The foreclosure crisis in Ohio has been driven by different factors than is true elsewhere.  Nationwide there was a large run-up in house prices followed by a crash.  Between the first quarter of 2002 and the second quarter of 2007 (when the market peaked), national house prices rose 47 percent, compared to  14 percent in Ohio and 15.5 percent in the Columbus MSA, according to the federal government’s FHFA House Price Index.  Since then, national prices have fallen 3.8 percent, while Ohio prices are off 0.1 percent and those in the Columbus MSA have recovered and are up 0.7 percent.  (Only 10 of the 50 largest metros have done better.)  California, Florida, Arizona and Nevada account for 56 percent of foreclosure filings.  The 2002-2007 house price gain in these four states was more than 90 percent, and their subsequent loss has been between 18 and 27 percent.  Many of those buying in these states near the top of the market now owe far more than the house is worth.  If the payment on the mortgage increases to an unaffordable level, they cannot refinance and have no alternative but to default.

Homeowners in these four states share the chief problem facing Ohio’s homeowners: payment problems due to job loss.  Ohio employment has declined 5.9 percent since the beginning of the recession – equal to California’s loss, but less than the 7.2 percent in Florida, the 7.8 percent in Nevada, and the 9 percent in Arizona.  The rate of job declines is expected to decrease in coming months, but the recovery in the housing market in boom states is likely to be much longer in coming.

Another small gain in Columbus regional employment

The Bureau of Labor Statistics released preliminary June employment statistics for the Columbus MSA this morning. On a seasonally-adjusted basis, total employment increased in the Columbus Region for the second consecutive month. This is especially surprising because the June decline in U.S. employment was worse than that in May. Our net gain was 1,700 jobs (0.2 percent), close to the 2,000-job gain in May. (May employment was adjusted downward by 300 jobs.) The nation lost 459,000 jobs (0.35 percent), compared to 330,000 jobs (0.25 percent) in May. State employment fell 33,000 (0.6 percent). Since the recession began in December 2007, the region has lost 17,600 jobs, or 2.0 percent, compared to losses of 4.7 percent nationally and 5.9 percent in Ohio. The largest employment gains in June were 2,500 in private education and healthcare and 1,200 in the beleaguered government sector. Construction lost 1,400 and leisure and hospitality lost 1,200. Changes in everything else were close to zero.

For more information on the Columbus economy, visit www.columbusregion.com.