Wednesday, August 19, 2009

Columbus economist: Recession coming to a close - Business First of Columbus:

Columbus economist: Recession coming to a close - Business First of Columbus:

Industry experts at a Wednesday forum shed light on Central Ohio’s current and future economic position and projected that the recession is likely to be over as early as September.

Bill LaFayette, vice president of economic analysis for the ColumbusChamber, said in presenting the organization's Blue Chip Economic Midyear Report that the worst may be over in Ohio and elsewhere.

“There is a strongly growing consensus that the recession is over,” LaFayette said.

LaFayette said that gross domestic product is likely to start seeing modest growth again in the second half of 2009. GDP is expected to expand by 2.1 percent in the fourth quarter this year but then pick up in the first quarter next year by 2.8 percent, close to the 3 percent growth rate that is generally accepted by economists as a healthy rate for growing economies.

Citing a recent study by the Wall Street Journal, LaFayette said 84 percent of those surveyed expect the recession to end in September at the latest. About half of that 84 percent indicated that they think the recession already is over.

LaFayette said employment in Ohio will likely continue to decline in the next year but job losses aren’t expected to be as significant as they have been in the past year.

Central Ohio is still faring better than the rest of Ohio and most of the nation, however. The unemployment rate, measured at the end of June, for the Columbus metropolitan area is 8.9 percent, compared with 11.1 percent at the state level and 9.5 percent nationally.

With clearer waters ahead, LaFayette said that Central Ohio needs to be looking to the future in order to improve its position in an increasingly globalized economy.

“We really ought to be thinking beyond this year and even next year,” he said.

LaFayette identified certain economic drivers that can help boost the region’s economy and improve the standard of living for Ohioans, including logistics and distribution, manufacturing, business services, creative industries, finance, life science and health care, and education and research. He described these areas as economic drivers because they are growing faster on average than other industries.

LaFayette said industries such as aviation services and agricultural biosciences are expanding in Ohio and may soon become drivers of the economy.

Ryan Augsburger, managing director of public policy services for the Ohio Manufacturers’ Association, said that manufacturing isn’t a dead industry in Ohio despite the state’s loss of manufacturing jobs.

“It is important to understand that manufacturing is not in decline but is evolving,” he said.

Augsburger said global competition and the need to increase technology are transforming the industry and forcing Ohio workers to develop new skill sets.

Central Ohio’s network of colleges and universities combined with its skilled labor force and geographical position make it ideal for manufacturing, Augsburger said.

Another industry emerging in Central Ohio is logistics, said David Whitaker, vice president of business development and communications for the Columbus Regional Airport Authority.

“We’re ideally suited here to distribute goods all over the world,” Whitaker said, citing Columbus’ proximity to major distribution centers in the country.

Logistics and manufacturing, plus other growing industries such as tourism, can help bolster Ohio’s economy in the future, LaFayette said.

The event was hosted by the Columbus Metropolitan Club and sponsored by Plante & Moran, a Columbus accounting and business advisory firm.

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