Wednesday’s Columbus Metropolitan Club forum offered a glimpse at how the central Ohio economy may fare in 2018.
Mike Foley reports.
Regionomics owner Bill LaFayette released his 19th annual economic outlook for the Columbus-area. He expects the region’s recent job growth trend to continue in 2018.
“Central Ohio had another good year in 2017. As of now it looks like we gained 2 percent in total employment, just over 21,000 net new jobs. U.S. employment was up 1.5 percent. Ohio gained only .9 percent. 2018 is going to be our ninth annual consecutive year of growth. I’m forecasting more than 19,000 net new jobs, a growth of 1.8 percent. U.S. employment should grow by about 1.4.”
Well-performing sectors according to LaFayette include construction, transportation and utilities, financial activities and government. He also expects big things as elements of the Smart Columbus initiative begin to emerge. His only minor concern comes in the business services subsectors of corporate headquarters and administrative support employment. Other topics discussed at the CMC forum, the impact of the new federal tax reform package and what corporations will do with their tax breaks. Ohio State University Fisher College of Business professor emeritus Stephen Buser responded this way.
“Corporations have a duty to their shareholders. If they’re going to raise wages or hire more workers, they have to have a good reason for that. The use of cash traditionally in the last few years has been to increase dividends and buy back shares of stock to increase the value of the remaining stocks. That’s what their duty to their shareholders is. So we can’t be shocked when a company does what it says it’s going to do. Fifth-Third is an exception.
After the tax plan passed, Cincinnati-based Fifth-Third announced plans to raise its minimum wage and pay employees bonuses. Meanwhile, Buser issued a warning of sorts – or at least something worth considering.
“Since 1950, we’ve had 11 recessions. Now if I were teaching this as a course, I’d make all of you do the math. But that means roughly once a little over six years, you can expect a recession. We are now entering the 11th year since we’ve had the last recession, so we are overdue. I’m not forecasting a recession in the coming year, but I can’t say I’ll be surprised if it happens. I think we need to prepare ourselves if that happens.”