Expect anemic job growth in Columbus this year, expert forecasts

Posted by Admin January 8, 2025 Jobs

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This year, for the fourth year in a row, employment growth will remain sluggish in central Ohio, according to an annual economic forecast for the region.

The Columbus area will add about 4,500 jobs this year, a “measly” 0.4% growth in a market of about 1.16 million workers, said Columbus economist Bill LaFayette, who delivered his forecast to the Columbus Metropolitan Club on Wednesday.

LaFayette noted that this is his 26th year of preparing the forecast.

“Unfortunately, there have been much more cheerful ones in those 26 years,” said LaFayette, owner of the economic analysis firm Regionomics.

Why isn’t Columbus adding more jobs?

Assuming his forecast is accurate, LaFayette said this will be the fourth year Columbus employment growth has underperformed the nation’s, despite central Ohio’s reputation for being economically robust. Central Ohio’s projected employment growth of 0.4% would be less than half the growth forecast nationally.

Last year, central Ohio’s job growth was no better. The region ended the year up about 5,200 jobs, or 0.5% more than the previous year, less than one-third of the national employment growth rate of 1.6%. (LaFayette noted that in his forecast last year, he predicted a gain of 9,800 jobs, well above the number the region actually added.)

In his forecast, and in a separate report he prepared for the Columbus Urban League, LaFayette highlighted two underlying problems in central Ohio’s economy: jobless workers lacking skills required by central Ohio employers; and the economic racial disparity in the region.

Jobs exist but not the right workers

LaFayette attributed the anemic job growth in part to a lack of qualified workers, especially in the health care and construction industries, instead of a lack of employment opportunities.

“The problem seems not to be underlying economic problems – for the most part,” LaFayette said. “The problem now seems to be a disparity between the skills that employers need and those that job applicants are offering.”

LaFayette pointed out that while job growth has been stagnant and the unemployment rate has risen, help-wanted ads have actually grown, up more than 20% in late fall, suggesting that the jobs are there but the workers aren’t.

“People are coming into the labor force, but they are not getting hired,” he said. “Employers are putting out postings for jobs that can’t get filled.”

In November, for example, more than 3,500 ads were posted for registered nurses in central Ohio, according to the state jobs bulletin board, OhioMeansJobs.com. Another 1,900 posts were seeking truck drivers or heavy-equipment operators and more than 1,000 openings were available for software developers.

“Even though you’re seeing a lot of growth in health care and construction specifically, who knows how much more growth there would be if they could fill these jobs,” LaFayette told The Dispatch.

Where jobs will grow – and shrink

Those two industries, health care and construction, will account for much of the job growth LaFayette expects this year. He forecasts gains of about 5,100 new health care jobs and about 2,200 construction jobs. Local government, expected to be up 1,400 jobs, is another growth area.

On the other side of the ledger, LaFayette forecasts declines in several industries including retail (a loss of 1,100 jobs), “professional and business services” (2,400 jobs), manufacturing (700 jobs) and transportation and utilities (800 jobs).

LaFayette said he is particularly concerned about ongoing job losses in insurance, one of central Ohio’s biggest industries. LaFayette calculated that more than 10,000 central Ohio insurance jobs have been lost since 2018.

Racial economic disparity persists

LaFayette also discussed a recent study he did for the Columbus Urban League that ranked central Ohio last among 54 metro areas in the racial distribution of prosperity. LaFayette based his findings on five measurements that looked at employment, earnings and poverty disparities between black and non-Hispanic white central Ohio residents.

LaFayette’s findings mirror a 2024 report from The Brookings Institution that also concluded that Columbus had the greatest economic disparity between racial groups among the nation’s 54 largest metro areas.

“This problem weighs heavily on our economy,” LaFayette wrote in his report. “If we improved from worst to first, there could be 42,000 fewer people in or near poverty 10 years from now and 154,000 more jobs than if we did nothing.”

Following other reports, LaFayette recommended better educating youth, especially minority youth, for the job world.

“Effective career counseling and occupational needs analysis should be a priority,” LaFayette wrote.

“Engaging K-12 education is critically important for several reasons. First, more students must earn their high school diploma. While many jobs do not require a college degree, jobs open to those without a high school diploma are few and decreasing. Non-graduates are at high risk for dead-end jobs and poverty.”

jweiker@dispatch.com

@JimWeiker