Last week we hosted our Columbus Area Labor-Management Committee membership meeting. In addition to electing members to the Board of Trustees, attendees heard a presentation from Dr. Bill LaFayette, Owner of Regionomics. This firm focuses on community level economics, as small as neighborhoods and as large as regions, their industries, their people, their workforce, and their growth and change.
Bill shared the economic outlook and forecast he prepares each year for the Columbus Metropolitan Region. His findings and insight provide an interesting look at the coming year and the economic trends that will impact our area.
Among the key conclusions from Dr. LaFayette’s analysis are:
- Above average employment growth will continue in 2016. Dr. LaFayette projects an employment growth of 2.2% in Central Ohio and 1.6% in Ohio in 2016.
- By comparison, U.S. job growth will be around 1.8% this year.
- Job growth in Ohio was again below average in 2015. It has been lagging behind the U.S. since late 2012.
- The sector with the largest job growth was Healthcare and Social Services. This was followed by Business and professional services.
- The only area in which a decline in total employment is projected in 2016 was State Government, which may lose 200 jobs.
- State employment continued to decline outside of Central Ohio. In 1991, 34% of state jobs were in Central Ohio. Today it is 43%.
- Construction employment increased 34.1% since 2010, more than twice the national average.
- Consumer spending accounts for 70% of the gross domestic production. If consumers do not have money to spend, it hurts the overall domestic product and the economy.
- Only 20% of economists are projecting a recession in 2016.
- Job growth in 2016 is expected to average 204,000 jobs per month nationally.
- In 2015, Franklin County employment became higher that Cuyahoga County for the first time ever.
- Retail employment has increased 9.7% nationally since January 2010, but only 2.7% locally. He suggests this may be due, in part, to on-line purchasing, suggesting retailers that do not have a strategy for dealing with this “should be scared.”
- While employment is rising, paychecks may not be. From 2007 to 2014, the number of jobs requiring a college degree paid salaries that slightly beat the inflation rate. Pay rates for 70% of jobs that did not require a college degree were less than the inflation rate. Entry level jobs that pay a living wage are difficult to find.
- Employers report a need for candidates with better soft skills, including communications, teamwork, and rudimentary math skills.
- It appears the economy is beginning to absorb some of the discouraged job seekers, which will help lower the real unemployment rate. During the recession, this unemployment rate was 5 – 7% higher than the stated jobless rate.
- The lack of growth in the labor force is due to people retiring and no longer looking for work.
- By the end of this year some job classifications will see a shortage of available employees. Employees staying in the workforce longer will not significantly impact this. This further emphasizes the need for workforce development.
- Ohio has one of the lowest levels of social mobility in the county.
While the economy of Central Ohio remains strong, there are still potential pitfalls we must be ready to address. CALMC shares these concerns and works with employers and employees to develop effective strategies to deal with these challenges.
You can see more photos from the meeting on our CALMC Facebook page.
Dr. Lafayette’s insight into the Central Ohio economic outlook provided a great deal of information to our attendees. We want to thank him for giving his time for the presentation.