Columbus.

• Author: de Araujo, Pedro F.

The Columbus region has been affected by the overall housing crisis. However, the economic outlook for 2008 is positive but modest. This brief report will provide some important statistics about overall employment, job creation by sector, and the housing market, and will offer predictions on some key variables.

Employment

The unemployment rate for Columbus has decreased 13.8 percent, from 4.4 percent in 2006 to 3.8 percent in 2007. (1) This rate is much lower than the national and state unemployment rates, which equal 4.5 percent and 4.8 percent, respectively. This decrease corresponds to a 2.5 percent increase in the employment level from 36,523 workers to 37,411 workers, a gain of 888 jobs.

Three months after the 2001 recession, which lasted from March 2001 to November 2001 according to the National Bureau of Economic Research, the Columbus area faced its largest recorded unemployment rate of 6 percent. Since that time, there has been a modest recuperation in the labor market. The net gain in jobs was 3,798, putting Columbus' current employment level still 4.5 percent lower than the booming years of the late nineties. This corresponds to a gap of around 1,750 jobs. Hence, there is still some ground to recover. Note, however, that Indiana's current employment is already 2 percent above the 1999 level. An employment comparison between Columbus and the state of Indiana shows a much larger response to the recession in the Columbus area (see Figure 1). This may be due in part to the large dependency Columbus has on the manufacturing sector.

[FIGURE 1 OMITTED]

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Jobs by Sector

The Business Outlook Panel has predicted modest growth in manufacturing jobs for the state in 2008. If this happens, the Columbus area should expect an increase in total jobs for the region. The assumption that an increase in manufacturing jobs can affect total jobs in Columbus comes from the fact that the manufacturing sector accounts for 36 percent of total jobs in Columbus; therefore, the trend in total jobs follows the trend in manufacturing jobs quite closely (see Figure 2).

Even though 36 percent is a significant number, it is 4 percentage points lower compared to the first quarter of 2001, (2) but 2 percentage points higher when compared to the levels in 2003 and 2004. Jobs have grown steadily but modestly in this sector since 2003, from 13,580 in the second quarter of 2003 to 15,565 in the first quarter of 2007. This represents an average...