Thursday, January 7, 2010

Economists discuss 2010’s modest job-growth forecast

Source: Business First of Columbus - by Matt Burns

If 2009 was a rough and uncertain year for the economy, it wasn’t much better for a ColumbusChamber-led panel’s forecast.

A year ago, a panel of four local economists expected Central Ohio to begin the new decade with 3,500 fewer jobs than when it began the year before. The decline finished at more than four times that, the largest percentage drop in a generation and the biggest raw loss of jobs ever seen for the eight-county region.

“The 2009 forecast was wrong,” Bill LaFayette, the chamber’s vice president of economic analysis, said at a Wednesday panel presenting the 2010 outlook. “Vigorously, impressively, dramatically wrong.”

This year, LaFayette and economists Joseph Mandeville, George Mokrzan of Huntington National Bank and James Newton of Commerce National Bank see the region’s jobs picture taking a tiny nudge for the better. Averaged estimates from the four project growth of 0.1 percent, or 800 jobs, for the region. That makes for an estimated payroll of 925,200 at the end of 2010.

“Things really will start to look and feel better in 2010,” LaFayette said.

Specifics of the growth forecast and the outlook presented at Wednesday’s panel, however, indicate that while the prolonged recession might be over, the tug-of-war between growth and decline and the reign of uncertainty aren’t.

Newton, the self-described pessimist of the panel, said continued uncertainty in the face of a tentative upturn likely will continue to pose problems for businesses as they recover.

“There are still so many uncertainties ... it is going to be an incredibly difficult year for planning purposes,” he said, adding later that the chances of federal policy hitting the mark on driving a turnaround aren’t good. “I feel the government tends to botch these things incredibly well.”

Mokrzan, whose outlook on 2010 was the most optimistic of the group, said the big surprise of the year could be on the positive side of the ledger as an increased flow of federal stimulus dollars makes a mark.

“As the economy begins to move forward, firms are going to have to increase employment levels,” he said. That, in turn, will translate to a boost in consumer spending that’s the backbone of the economy.

Despite an overall eye toward growth this year, LaFayette said the region will have to bear a weak first six months, and the panel’s outlook on specific sectors runs the gamut. Professional and business services are expected to lead employment growth this year, but manufacturing and construction losses will shed a combined 4,000 jobs.

And while the area’s economy has fared better than the rest of the Midwest at large, it isn’t immune to its struggles, either.

“There is no bunker,” LaFayette said.


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