Columbus forecast 2023.

• Author: Mohler, Steven H.

As a durable goods manufacturing-based economy, the Columbus metropolitan statistical area (MSA) experienced significant economic volatility in 2020 and 2021 due to global supply chain issues and fluctuations in consumer spending related to the pandemic. Columbus concluded 2021 with lower unemployment than 2020 and with slightly higher GDP. During 2022, the unemployment rate dropped below 2.0% on three occasions. Current expectations are for local economic output to increase during 2022 in light of vehicle production and sales projections. This article explores the 2022 data, as well as what is anticipated for 2023.

Key measures

Employment and labor force: From 2010 to 2021, the Columbus MSA experienced an overall increase in average annual labor force and employment, with growth of 4,415 people in the labor force and 6,754 in increased employment. Following the steep decline of 3,316 jobs lost in 2020, the number of jobs increased by 802 in 2021 and 615 in the first nine months of 2022, based on the Local Area Unemployment Statistics (LAUS) data set from the U.S. Bureau of Labor Statistics (BLS). Figure 1 shows monthly labor force and employment for the Columbus MSA through August 2022.

As is evidenced in Figure 2, labor force participation rates are declining and, as a result, labor supply pressures may continue with retirements and competition from new or expanding employers in surrounding counties.

Figure 2: Labor force participation rate Columbus MSA Indiana U.S. 2013 67.0 63.3 63.1 2014 68.5 63.4 62.9 2015 63.6 63.8 62.7 2016 69.3 64.7 62.3 2017 68.8 64.2 62.9 2018 68.7 64.8 62.9 2019 67.6 64.5 63.1 2020 66.4 62.8 61.8 2021 65.7 62.5 61.7 Note: Data for Columbus MSA are not seasonally adjusted. Data for Indiana and the U.S. are seasonally adjusted. Source: Local Area Unemployment Statistics (LAUS), U.S. Bureau of Labor Statistics and the American Community Survey, 1-year estimates, from the U.S. Census Bureau Note: Table made from line graph Unemployment: The pandemic lockdown spiked unemployment in the U.S., Indiana and Columbus in April 2020 to double digits. As the nation slowly recovered from economic disruption, the unemployment rate for the U.S. declined to 3.3% in September 2022. Indiana's unemployment rate for September 2022 (not seasonally adjusted) was 2.2%. Columbus' September 2022 unemployment rate was 1.8% (not seasonally adjusted) after peaking at 17.5% in April 2020. (1) The Columbus MSA unemployment rate is equal to or slightly lower than any of the counties contiguous to Bartholomew, reflecting the solid employment base in this county.

Table 1, which shows selected Indiana metros and micros, highlights that local unemployment rates remain lower than the national and state averages in the aftermath of the pandemic shutdown. Indiana's and Columbus' low unemployment rates are derived from an emphasis on manufacturing, which experiences tighter labor markets during economic expansions.

Weekly earnings: Average weekly earnings for the Columbus MSA experienced an impressive 36% growth from a low of $730 in 2009 to $996 in 2018. (2) However, average weekly earnings then declined for three consecutive years from 2018 to 2021. A turnaround is noted in the first nine months of 2022 based on a 20.5% increase from the 2021 average weekly earnings. Figure 3 shows the average weekly earnings data since 2007.

Figure 3: Total private average weekly earnings in the Columbus MSA Avg. weekly Rate of change avg. earnings (left axis) weekly earnings (right axis) 2007 $739 2008 $748 1.2% 2009 $730 -2.4% 2010 $763 4.5% 2011 $882 15.6% 2012 $991 12.4% 2013 $931 -6.1% 2014 $930 -0.1% 2015 $947 1.8% 2016 $943 -0.4% 2017 $990 4.9% 2018 $996 0.7% 2019 $945 -5.2% 2020 $943 -0.1% 2021 $917 -2.8% 2022 $1,106 20.5% Note: Data are not seasonally adjusted. 2022 data is shown through September. Source: Current Employment Statistics (CES), U.S. Bureau of Labor Statistics and Indiana Department of Workforce Development Note: Table made from bar graph. Economic indicators

Vehicle sales and production: Total vehicle sales in the U.S. have shown considerable volatility during the pandemic years. From near-record sales in 2018, sales declined in 2019 and 2020, then increased in 2021. This sales trend can be seen in Figure 4.

New vehicle production in the U.S. for the 12-month period from October to September of each year declined from a high of 11.8 million vehicles in 2016 to 8.5 million units in 2020. (3) A recovery in production in 2022 to 9.5 million vehicles can be seen in Figure 5. Supply chain issues will continue to be a headwind for the automotive industry into 2023, with rapidly rising interest rates resulting in a further chill on demand as possible buyers contemplate durable goods purchases in the face of higher borrowing costs.

We should note, Figure 5 does provide some reason to be optimistic, as it appears that--at least for now--some of the supply chain interruptions that vexed multinational durable goods producers from 2020 through early or mid-2022 may have abated...