The Columbus Chamber’s economic forecast for the region is the work of Bill LaFayette, vice president of economic analysis for the chamber, and three other local economists: Joe Mandeville of Red Capital Group, George Mokrzan of Huntington Bancshares, and Jim Newton of Commerce National Bank.
After this year’s forecast was presented to the public on Dec. 10 at the Athletic Club, The Metropreneur sat down with LaFayette to talk specifically about what the near future holds for small businesses. During that conversation, he identified three sectors that, in his opinion, will experience significant growth as we move into 2011, and spoke frankly about a workforce issue that is looming on the horizon.
LaFayette on professional and business services:
“The sector that has been carrying us through the recession and beyond is a very large sector called professional and business services. And that includes offices of accountants and attorneys and engineers. It includes research and development firms. It includes marketing and public relations firms. It includes corporate administrative offices, which are a very, very important part of this economy. It includes personnel services and waste services. And a lot of those companies are small businesses.
“That is the sector that has outperformed the national average during the recession. It is a sector that continues to outperform and it’s probably going to continue to outperform as we go through 2011. We’re predicting 2.2 percent growth in that sector.”
LaFayette on retail:
“Retail had a terrible run for the last decade, especially between 2000 and 2006…lost 16,000 or 17,000 jobs in the region while growing nationally. And the reason was the sector was burning off 20 years of overdevelopment. So what’s happened is that the tremendous decline in employment put the concentration of retail employment back where it really needs to be.
“We had way too many retailers chasing far too few dollars a decade ago and that’s not the case now. That was actually one of the best performing sectors, relatively, during the recession. I think, the best performing. We lost 3.8 percent, the U.S. lost 7.8 percent. So I’ve been saying for several years, ever since our numbers came back into whack, that retail was a sector that had a fair amount growth potential. And then of course the recession hit. But my assessment hasn’t changed a bit.”
LaFayette on logistics:
“Logistics is a very rapidly developing part of our economy. It’s related to distribution, which is extremely important here, but it’s different. The way I like to explain it is distribution is moving the boxes; logistics is deciding how the boxes are to be moved. You use mathematical techniques and operations research techniques to figure out the most economical way to get a shipment from Point A to Point B when it’s needed so, say, an assembly line doesn’t have to shut down. As our connections with the port of Norfolk and elsewhere continue to improve, that’s going to become more and more important for us.”
LaFayette on talent attraction and retention:
“It is not so much an issue for us in 2011, but it is going to become an issue for us both nationally and locally as the decade continues. And that is that we’re more likely to start seeing the workforce supply begin to pinch. And that is a function of shifting demographics. Older people are leaving the workforce, there are fewer younger people coming in to replace them, and nationally and here in the region we’re going to see workforce growth and the ability to access new talent get to be more and more of a challenge as the recovery takes hold, as this demographic shift that we’ve already started seeing continues.
“That is something that we in the region are thinking really hard about. And it’s something that people need to be aware of, that we need to be focusing now on attracting and retaining top talent because when the shortage hits, when the economy improves and these trends pick up steam, by then it’s going to be too late.”
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The forecast’s formal release is scheduled for noon on Jan. 5 at the Athletic Club. To make a reservation for the event, visit ColumbusMetroClub.org.
