Predicting that it’s going to be a pretty good year is an altogether rare and fun thing for an economist to say, but that’s exactly what Bill LaFayette, owner of Regiononmics, foresees for Columbus in 2015.
“[The Columbus Forecast] is calling for an increase in employment of about 21,000 in 2015,” LaFayette says. A 2.1 percent gain, that’s a touch above the predicted U.S. average of 2 percent.
LaFayette sees a few factors that put Columbus ahead of the U.S.
“I think we are focused in sectors, for the most part, that are doing well nationally and so that helps us out,” he notes. “But beyond that, it seems that in most cases, our sector employment growth is above the national average, and I think part of that may be that we got less hurt than average in the recession so we had less of a downturn to recover from.”
As for industries that are looking particularly strong in Columbus, “The best by far is business services,” LaFayette says. Business services covers a wide swath of jobs including professional offices like attorneys, architects, accountants and engineers, research and development, meaning firms like Battell, marketing, public relations, corporate administration, administrative support services, and waste-related services.
The forecast calls for a gain of 7,600 jobs, equating to 25 percent of the net new job gain with business services claiming 17 percent of the net jobs. Healthcare is also looking good with a 3.6 percent net gain and 4,400 new jobs.
On the flip side, there are three sectors that aren’t doing as well as LaFayette would like – transportation, manufacturing and leisure.
Transportation should see about 700 new jobs. And while new jobs are new jobs, “That sector has kind of disappointed ever since the recovery began,” LaFayette says, finding it worrisome because it’s a crucial sector that did so well before the recession.
Manufacturing will see a very small gain of only 400 jobs.
However, “Especially in the case of manufacturing you have to be careful not to conclude from that the industry itself is in trouble,” LaFayette says. He ran numbers showing that Central Ohio manufacturing productivity has really improved over the last few years, a better indicator in an industry that is so tied to productivity.
And finally, leisure. While it’s under performing, “I think that’s really probably that it’s taking a breather,” LaFayette says.
He expects a mix of small and large businesses to produce the new jobs. While the numbers don’t breakdown to show how small businesses play a part in this bigger economic picture, LaFayette points out that most businesses are small.
Last year, the economist shared his thoughts on Columbus’ need to grow when it comes to supporting local and while a year may not be long enough for many new numbers, “People are really starting to talk about the problem and I look on that as very, very positive sign,” LaFayette says. Recognizing that there is a problem is the first step in solving it.
Finally, 2015 will also be a year of some likely milestones for Columbus. The 21,000 new jobs will push employment over one million, and the metro population will likely exceed two million.
“More employment leads to more income, leads to more spending, leads to a higher standard of living,” LaFayette says. A growing population is also a general positive sign for the area.