Columbus economy may soon overtake Cleveland, Cincinnati
September 17, 2014
The Columbus area economy is gaining on Cleveland and Cincinnati and may be poised to pass them in coming years.
Columbus' economy grew by 3.3 percent in 2013 compared with 2.1 percent in Cincinnati and 0.5 percent in Cleveland, according to a U.S. Bureau of Economic Analysis report released yesterday. Central Ohio has outperformed Cincinnati and Cleveland every year since economic growth resumed in 2010 after the recession.
The central Ohio economy last year stood at $114 billion, the 30th largest in the country, the report showed. Cleveland still had the largest economy in the state and was No. 26 overall at $123 billion, and Cincinnati has the 28th largest economy at $119 billion.
How soon Columbus could catch up or surpass Cleveland and Cincinnati is hard to say, according to economists. But based on trends from 2008 to 2013, Columbus could pass both cities by 2018, said Jung Kim, research director for the Columbus Chamber.
"Obviously, a lot of things could change that," he said.
Other economists were not as certain.
"It looks like Columbus is catching up, particularly with Cleveland where growth is a little bit slower," said Michael Wolf, an economist with Wells Fargo & Co. in Charlotte, N.C. "It's certainly a possibility, if the last years are any indication."
Mekael Teshome, a PNC Bank economist, said shifts in economies can take decades to complete, noting the population movement from the Midwest and Northeast to the South and West.
"Even Cleveland and Cincinnati will pick up their growth rate, and Columbus' growth rate will settle down," he said.
"It's hard to say when and if Columbus will take over. Just the rate of population growth (in Columbus) implies that the gap is narrowing."
The region's productive workforce in high-value industries such as technology and education drove the local economy, Teshome said.
More important to Kim than how Columbus does against Cleveland and Cincinnati is how the region fares against the top metro economies in the U.S., the ones that central Ohio competes with for new projects that could bring jobs to the region. Based on the past five years' data, Columbus ranks seventh among those top 50 economies, according to Kim's calculations.
"That's more notable than us exceeding Cleveland and Cincinnati and surpassing them at some point," he said. "We're doing very well versus metros around the country."
Half of the region's economic growth in 2013 came from a sector that includes insurance, finance and real estate. The region also had growth in the professional and business-services sector and the private education and health-care sector.
The economists noted that the low interest rates in 2013 which led to homeowners refinancing their homes, the strong rental market Downtown and the headquarters of a number of banks and insurance companies in the region have played important roles in the growth of the local economy.
"We do have a strong finance and insurance sector," Kim said. "(JPMorgan) Chase, Nationwide, Huntington (Bancshares), Grange - there's a lot going on."
A separate report issued yesterday by the state showed the Columbus area likely will continue to outperform the state and the other metros in the region in coming months.
The index of leading economic indicators rose to 108.6 for Columbus in May, an increase of 0.3 percent, according to state figures released yesterday. That compares with 102.9 for Cincinnati, 92 for Cleveland and 94.8 for the state.
The report is based on an assortment of economic data, including initial unemployment claims, manufacturing workweek and housing starts.
The national economic report showed that the economy grew in 292 of the nation's 381 metropolitan areas.
Like central Ohio, the nation's metro areas experienced widespread growth in finance, insurance and real estate along with professional and business services. Beyond that, there was growth in manufacturing, and some areas benefited from the oil and natural-gas boom.
Growth for all of the metros increased 1.7 percent last year after a 2.6 percent increase in 2012.
Lima showed the strongest growth last year in Ohio at 7.9 percent, led by a strong boost in manufacturing. That growth rate was the ninth largest in the country.