Columbus forecast 2021.

• Author: Mohler, Steve H.

The Columbus Metropolitan Statistical Area (MSA) has long supported a strong manufacturing-based economy linked to the transportation industry and light vehicle manufacturing. While structural changes have occurred over the years, dependence on these two industries continues as Columbus MSA gross domestic product (GDP) has been more than 50% durable goods manufacturing based since 2012. (1) Columbus has experienced six years of solid economic growth starting in 2010, with two years of GDP decline in 2014 and 2015. (2) With the continuing pandemic, weak business investment plans, a challenging year for Cummins and fewer light vehicle sales in North America, Columbus should conclude 2020 with lower GPD and higher unemployment than the prior year. Current projections are for the local economy to rebound during 2021 in light of mixed economic indicators.

Key measures

Employment and labor force: From 2011 to 2018, the Columbus MSA experienced nonfarm job growth between 100 and 4,100 annually, resulting in a total increase of 9,800 jobs. However, employment declined by 100 jobs in 2019 followed by a decline of 2,700 jobs in the first nine months of 2020, based on the Current Employment Statistics data set from the U.S. Bureau of Labor Statistics (BLS).

Figure 1 shows labor force and nonfarm jobs for the region from the Local Area Unemployment Statistics (LAUS) data set (also produced by BLS).

In 2018 (the latest commuting data available), Columbus attracted approximately 13,265 workers (or 20% of the workforce) from outside the county (including Johnson, Jackson, Jennings, Brown and Marion counties). (3) Based on the same 2018 data, approximately 5,100 Bartholomew county residents commuted to Jackson, Marion, Johnson and Decatur for their jobs. Approximately 13,000 workers from outside Columbus will continue to be required for staffing local firms; therefore, commuting patterns would be expected to remain relatively stable. However, labor supply pressures are expected to continue to increase as new employers enter markets in surrounding counties.

Weekly earnings: Average weekly earnings for the Columbus MSA experienced a 36% growth from a low of $730 in 2009 to $996 in 2018. (4) As the labor market tightened between 2014 and 2018, weekly earnings increased in aggregate 7%, while inflation (measured by national CPI-U) impacted consumer spending power by 5.7% during the same period. (5) However, 2019 reflected a 5% decline in weekly earnings from 2018. The average for the first nine months of 2020 reflects an approximate 1% decline from the 2019 average annual weekly earnings. Figure 2 shows the monthly employment and earnings data since 2017.

Average weekly hours climbed from 37.4 hours per week in 2016 to the highest level in over 10 years of 40.2 hours per week in 2018, before declining to 37.6 hours per week in 2019 and 36.6 hours per week in the first nine months of 2020. The rate of growth for average hourly earnings has changed from +3.7% in 2015 to -4.5% in 2018, followed by a 1.4% increase in 2019. (6) Average hourly earnings have increased in 2020 with September 2020 (year-to-date) reflecting a 3% increase from September 2019 (year-to-date).

Unemployment: The pandemic lockdown spiked unemployment in the U.S., Indiana and Columbus in April to double digits. As the nation recovers from the economic disruption, the unemployment rate for the U.S. declined to 7.9% in September 2020. Indiana's unemployment rate for September 2020 (not seasonally adjusted) was 5.8%. Columbus' September 2020 unemployment rate was 4.9% (not seasonally adjusted) after peaking at 17.2% in April 2020. (7) The Columbus MSA unemployment rate is slightly lower than any of the counties contiguous to Bartholomew, reflecting the solid employment base in this county.

Table 1, which shows...