Q2 2012 Columbus, Ohio Commercial Real Estate Economy

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Q2 2012 Columbus, Ohio Commercial Real Estate Economy

Columbus is still struggling with a large number of unemployed people looking for work, but the latest Current Employment Survey (CES) data from the U.S. Bureau of Labor Statistics (BLS) indicate that the employment picture has improved. Total non-farm employment increased by 20,200 (2.2%) in the 12 months ending in June, this source reports. This is a substantial increase over the gains recorded in the 12 months ending in April, the last period Reis covered for this metro. The job picture is currently positive, but certain problems remain; one of the largest being the great number of people still looking for work. “Slow growth leaves many competing for few jobs,” reported the Columbus Dispatch in June. “While Ohio is showing some positive signs, the economic recovery is still ‘painfully slow,’ according to a report recently released by Policy Matters Ohio. The report noted that since the end of the recession in June 2009, the state has had job growth of just 2.1% with the addition of 108,100 jobs. Since May 2011, the state job total has grown by nearly 76,000, or 1.5%. “At the rate of growth Ohio has experienced over the past 12 months, it will still take nearly 3 1/2 years to generate the additional 261,500 jobs needed to return Ohio to pre-2007 recession levels of employment,” the report found.

Columbus certainly has a way to go, but in all fairness to the metro, is has shown signs of starting to get there. The latest CES data indicate overall increase of 24,500 in Private employment in the 12 months ending in June. Perhaps not surprisingly, one leading sector was Professional and Business Services, which posted a gain of 3,900 jobs (2.6%). Columbus has a strong corporate presence, being home to approximately 70 insurance companies and numerous corporate headquarters. In a related field, Financial Activities employment increased by 1,500 jobs (2.1%). On the technology front, Columbus got some good news in July, when the Columbus Dispatch reported “Columbus was ranked the eighth-best city for tech jobs in the country in 2012, placing higher than other cities in Ohio and the region. From 2001 to 2011, Columbus’ tech industry grew 31.4%, including a 9.5% gain from 2009 to 2011, according to a study by Praxis Strategy Group, an economic-development consulting firm in Grand Forks, N.D. Tech industry experts said Columbus’ prominent research firms and higher-education facilities contributed to the city’s tech-jobs ranking.”

For the more blue-collar employment categories, Construction and related trades employment fell by 200 jobs (0.7%), while the Manufacturing sector declined by 1,800 jobs (2.8%). However, there may be some good news on the building front. According to the Columbus Dispatch, “on the heels of the slowest year of home construction in three decades, building permits are up more than 20% this year—the first meaningful increase since 2003.” It may take some time for this trend to be reflected in employment data, but the Dispatch noted that ground has been broken on “the Meadows at Lewis Center, the first new Delaware County subdivision of any size in four years.” Rounding out the rest of the employment picture, Wholesale Trade, long a mainstay in Columbus due to a central location which has made it a hub for logistics and shipping, posted a gain of 2,400 jobs (6.3%). Transportation and Warehousing employment fell by 700 jobs (1.7%). The largely publicly-funded Education and Health Services sector saw employment increase by 9,900 jobs (7.7%). Overall Government employment fell by 4,300 jobs (2.8%).

One thing the Columbus economy has to watch out for is Sequestration. Columbus Business First reported in September “the Budget Control Act of 2011, passed to resolve the political stalemate over raising the nation’s debt ceiling last year, mandated a $1.2 trillion reduction in federal spending over the next decade split between defense and non-defense programs. Barring any action by Congress, the 2013 tab of $110 billion in cuts comes due Jan. 2.” “For Ohio companies that rely directly and indirectly on government contracts, the cuts could lead to a loss of 40,403 jobs in fiscal 2012 and 2013 and a decline in gross state product of $4.06 billion, says an economic impact study from George Mason University,” Business First reported. “The state is home to key military operations, including the Defense Supply Center Columbus in Whitehall and Wright-Patterson Air Force Base in Dayton. Defense giant Boeing Co. does $5 billion of business in Ohio, where it employs more than 600 workers at facilities in Heath and Cincinnati.”