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Economist Says Regional Forecast Bright - For Many

Jan 7, 2015

Bill Lafayette
Credit regionomicsllc.com

A local economist says the outlook for central Ohio in 2015 is unusually bright. 

Bill Lafayette of the analysis group Regionomics told the Columbus Metropolitan Club on Wednesday that the region is in an enviable position.  He tells Alison Holm he sees better than the national average in growth ahead, with the addition of 21-thousand jobs, an increase of 2.1 percent

"The best by far is professional and business services.  I'm looking for a gain there of around 76-hundred jobs, around 4.7%.  It's an extremely important sector for us.  It brings dollars and demand for services in from outside the region, which is one of the ways we become better off.  Health care is also looking  very good.  Those are the two best, but most sectors are going to be doing at least reasonably well this year.

AH: Columbus fared fairly well even during the Great Recession.  How is Columbus doing compared to the rest of the state of Ohio?

BL: Oh, much better. the state as a whole has 100,000 jobs to make up from recession losses, while we made up all the jobs that we lost back in March of 2012.  and we've certainly had much,much better job growth over the last five years.

AH: Government employment - state government versus local government - was sort of a mixed bag in 2014. What are you anticipating in that sector coming up?

BL: A mixed bag, yet again.  Local government went through a really serious loss of employment over the last few years.  that seems to have stabilized, and I'm calling for a small 0.4% gain in local government.  State government I'm expecting to continue to do very well, with a gain of 2.6&.  Really interesting thing about state government; is that if you look at the concentration of state jobs - the share of state jobs that's here in Central Ohio - that share is now at it's highest level since 1964.  We've been growing relative to the state since about 1990.  

AH: You've said you feel that Central Ohio regained the number of jobs that it had lost pre-Recession as far back as March of 2012;  are we looking at different employment in Central Ohio than we had prior to the Great Recession?  

BL: Very much so.  A lot of the gain that we've seen relative to where we were before the recession - management jobs have really, really grown; health care related jobs have grown a lot, education jobs have grown a lot.  But on the other hand there are a lot of areas that have shrunk, the biggest being construction.  Production jobs have declined; distribution, transportation jobs have declined; maintenance and repair jobs have declined.  And when you look at the jobs that required a degree versus those that don't require a degree, we have some 30-thousand more jobs now that require a degree; 15-thousand fewer that do not.  When you couple that with the fact that the wages of lower-skilled jobs have declined relative to where they were before the recession, that certainly is an explanation for why our poverty rate remains so high despite all this job growth.  

AH: Many cities have lost higher-skilled jobs and - if they've been able to retain jobs it's been service sector jobs; lower skills, lower pay - but it sounds like Columbus is in a much better position. 

BL: Yes,  and it's good news for the economy, but it's very troubling that it's more challenging now than it was, for people without a degree to find meaningful employment. " 

Lafayette also says - despite the rosy outlook - central Ohio cannot afford to be complacent.  He notes that the regions success depends on strong surrounding economies, who can buy the services developed in central Ohio.