Columbus forecast 2012.

• Author: Oakes, Michael J.
• Position: Statistical data

Last year, we described the Columbus and Bartholomew County area economy as having the feel of something in waiting--something just off to the side waiting for more economic fuel and thrust. It looked like growth in 2011 would be slow, but probably ahead of the state. Job growth would also be slow, resulting in an unsatisfyingly slow fall in unemployment rates--but that would also probably improve more quickly than the state.

That's about how 2011 has turned out. GDP and personal income growth here has been faster than in the state overall. Employment growth has been higher. And unemployment has fallen quicker.

This is unusual compared to the previous two recessions when Columbus recovered more slowly than the state. In large part, that was due to the proportion of the employment base here connected to manufacturing, which once hovered around 35 percent. Manufacturers have always been cautious in ramping employment back up.

Outlook

Within the context of slower-than-desired overall economic growth in Indiana and nationwide, the outlook for Columbus is pretty good. There are several factors influencing this.

First, the numbers look good. Jobs clipped up 7.6 percent since the start of 2010 in Columbus compared to just under 2 percent for the state (see Figure 1). Columbus unemployment dropped more than 3 percentage points to reach 7.1 percent in October 2011 relative to 10.6 percent in January 2010. That compares to a current rate of 8.6 percent in Indiana, down from 11.5 percent in January 2010 (see Figure 2). In fact, no other metropolitan area in Indiana has an unemployment rate as low as Columbus.

[FIGURE 1 OMITTED]

[FIGURE 2 OMITTED]

GDP data for 2010 showed the Columbus economy growing faster than most other MSAs in the country (see Figure 3). This was due in part to an especially low base established in 2009. And while the data release comes with a considerable time lag, the growth nevertheless resonates with what we are seeing on the ground.

[FIGURE 3 OMITTED]

Personal income has climbed too. According to models from the Kelley School of Business Center for Econometric Model Research, personal income growth for Columbus will outpace all but the Indianapolis and Elkhart-Goshen MSAs in 2011 and 2012. Columbus growth is expected to be 3 percent in 2012 compared to about 2.6 percent in Indiana.

A second factor influencing a more optimistic 2012 (again, within the context of the overall economy's continued slow recovery) is Columbus'...