As has happened in previous periods of economic contraction, Columbus Ohio once again appears to be outperforming most major U.S. metro areas. This observation is based on the fact that, according to its most recent (May) employment statistics, the city has seen its workforce shrink over the past year by less than all but five of the 50 largest U.S. metro areas.

The relative strength of the Columbus economy is also evident in its residential housing starts, which year to date (versus same period last year) have contracted by just over 27% compared to a 48% year-to-date drop for the country as a whole.

The reason for Columbus’ relative economic strength is the city’s diversified industrial base that depends less on manufacturing and construction than a large number of metro areas of similar size in the United States.

While overall manufacturing employment in the U.S. has fallen by 11.6% over the past year, it has dropped by a relatively modest 5.8% year over year in Columbus.

Looking forward, recently announced layoffs at Wal-Mart’s optical labs, coupled with the prospects for further job cuts in retail and finance, will probably cause the Columbus economy to contract further into the second half of the year.

This view is supported by the most recent Manpower Employment Outlook Survey, which showed that Columbus-area employers expect a flat job market through the third quarter of 2009. This is an observation that also appears to coincide with the most recent (June) Conference Board Help-Wanted Online Data Series.  

Having said this, Columbus city council’s recent acceptance of $33 million in federal stimulus dollars, together with the approval of a $30 million bridge loan to help fund the construction of a $3 billion generating station in Meigs County, will provide a boost to the metro area’s economy heading into 2010. 

In addition, although demand for both new and existing homes is still quite weak, the outlook for apartment accommodation is somewhat stronger given that, according to Danter Co. and VWB Research, Columbus’ apartment vacancy rate (7%) is close to a seven-year low.

Employment Growth: Columbus, OH vs Total United States

*”Year over year” is each month versus the same month of the previous year.

Data source: U.S. Bureau of Labor Statistics (Department of Labor).
Chart: Reed Construction Data – CanaData.