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Pickaway County Chamber of Commerce

Networking & Education Roundtable Summary

Bill LaFayette Ph.D.

Economic Analysis

Columbus Chamber of Commerce

24 June 2009

After a brief introduction, Dr. LaFayette presented the group with an amazing amount of statistics and figures on the health and vitality of the national, regional (8-county Central Ohio MSA) and local economy. Below is a summary of his informational presentation.

History of Recessions

Our country has endured 10 recessions since the end of WWII.
Until now, the longest one was lasted 16 months.
We entered the current recession in Dec. 2007 and are still in that recession (June 2009) making it the longest recession since WWII.
The GNP, as of the end of 2008 decreased by 6.3%
From 12/07 to 5/09 we lost 4.3% of the workforce, or 6 million jobs
From 10/08 to 4/09 the US averaged 640,000 job losses PER month but in 5/09 we saw that number drop to 340,000
During this recession we have seen national unemployment go from 4.9 to 9.4%
Even though the numbers look bad, we are NOT in the DEEPEST recession this country has seen. The worse recession on record was 1957-1958

How is the national economy forecasted?

Monthly the Wall Street Journal surveys 53-54 national economists asking “what are you forecasting for the next quarter and year?”
They tally the answers and develop an average. Here are the averaged forecasts for the coming year:

2nd Quarter 2009 we will see GDP down 1.6% which is BETTER than the 5.7% decrease in 1st Qt. 09.
3rd Qtr 09 will see a .6% INCREASE
4th Qtr 09 will see a 1.9% INCREASE
1st Qtr. 10 – 2.3% increase
2nd Qtr. 10 – 2.8% increase

However a strong economy equals a national GDP of 4%!

Unemployment and Job Loss:

The end of the last recession was Nov. 2001 but the country did see positive job growth until Aug. 2003.
Employment will continue to fall but should slow down considerably in 2010.
Unemployment is projected to be 9.9% nationwide by 12/09 but should drop to 9.4% by 12/10

Regional (Metro) 8-county Economy:

Our recession is not as severe as the rest of the country.
From 12/07-5/09 our region lost 19,000 jobs (or 2%) compared to the US at 4.3% and the state of Ohio at 286,000 (5.3%). As a state we are still taking a significant hit.
Our region has seen employment growth in 7 of the last 17 months (that we’ve been in the recession). The nation has seen NO growth in that same 17 month period and our region GAINED 2500 jobs in 5/09.
Current unemployment rate for Ohio is 10.8; national 9.4; county 11.3 and region 8.5
Dr. LaFayette stated that Unemployment DOES NOT EQUAL a healthy or unhealthy economy.
The health is based on the labor force (people actually employed or have actively sought employment over the last 30-days).
Dr. LaFayette stated that we need to spend LESS time focusing on unemployment rates and more at employment sectors.

Our region vs. the nation in Employment sectors during the recession:

	Region	Nationally
Government Positions	Down .4%	Up 1.2%
Manufacturing	Down 8.7	Down 13%
Retail	Down 1.9	Down 4.1
*Note 22,000 or 17% of our retail jobs were lost from 2000-2006
Finance	Down 3.5	Down 5.6
Business Services	Down 1.5	Down 7.5
Leisure & Travel	Down 1.9	Down 2.9

Our region is doing better than the rest of the country because we are “recession-proof” True or False? FALSE. Our region is doing better because we didn’t participate in the “boom” at the same level the rest of the country did. Some supporting statistics:

2004-05 national housing prices rose 10-12%; regionally housing prices only rose 4-5%.
2003-1st quarter 2007 – national housing prices rose 31%; regionally 8.4%

The Pickaway County Economy:

Manufacturing has slipped but still stable; from 2006-07 we had growth of 400-jobs (2.7%) in that sector.
63% of our workers are employed in manufacturing making it our dominant employment sector.
Sub-sectors of manufacturing include: auto, plastics, chemical and drug, food and beverage, and non-metallic products (cement, brick, glass, etc).
Dr. LaFayette stated that our loss in manufacturing jobs is not entirely due to them going oversees or to Mexico. These jobs have been replaced through production improvements and technology (robotics). The positions that become available in manufacturing require employees to have experience with this technology making recruiting efforts difficult due to the lack of skilled employees in the workforce.
“Up and Coming” business sectors for PC –

Business services including lawyers, accountants, banking, corporate management, public relations and marketing.
Private Education, Healthcare, and Transportation and Warehousing (Intermodal) which is helping diversify our economy.

Dr. LaFayette produces the Columbus Blue Chip Economic Forecast. He will provide an “updated” forecast in the 1st week of August. That forecast can be seen at www.columbus.org as well as on his blogs (that can be linked from the same website).