Home to the world headquarters of Cummins, Inc., Columbus — a metropolitan area of 78,000 people in southeastern Indiana — has gained jobs at a faster rate since 2010 than all but four MSAs in the U.S., regardless of size. Most notably, it’s the only MSA in the top five, according to EMSI’s latest quarterly dataset, whose economy hasn’t been lifted by the off-the-charts growth of the oil & gas sector (the top four are Williston, N.D., Dickinson, N.D., Odessa, Texas, and Elk City, Okla.).[table "468" not found /]
Columbus instead is a manufacturing town, and manufacturing has experienced a huge surge of activity in the area. But that was before layoff notices starting coming last month.
First, a little background.
Roughly 37% of all wage-and-salary jobs in the Columbus MSA are manufacturing-based — more than four times the national share. It has the highest concentration of mechanical engineers, at 13.6 times the national average, than any metro area in the U.S. Because of Columbus’ strong manufacturing presence, the city is home to the Advanced Manufacturing Center of Excellence, a partnership among Indiana universities and colleges aimed at “strengthening the productivity and competitiveness of the manufacturing sector in southeastern Indiana.”
Thanks to Cummins, a leading maker of engines, and other major manufacturers in the area, the largest sub-sectors in Columbus are other engine equipment manufacturing (NAICS 333618) and all other motor vehicle parts manufacturing (NAICS 336399).
Nearly 1 out of every 6 U.S. jobs in other engine equipment manufacturing is located in Columbus, a remarkable concentration of team assemblers, mechanical engineers, and miscellaneous production occupations for a small metro. Since 2010, employment in other engine equipment manufacturing has spiked 48% in Columbus (see the above chart from Analyst).
It’s easy to see why Cummins, the region’s largest employer, has helped Columbus’ economy blossom until very recently. In 2011, the company raked in $1.85 billion of earnings on sales of $18 billion, according to its website.
But last month, Cummins announced plans to reduce its worldwide workforce by 1,500, with 10% of the reduction coming in Southern Indiana. The layoffs are part of an overall manufacturing slowdown across Indiana.
From the Associated Press:
INDIANAPOLIS — Indiana’s manufacturing industry has seen its recovery stall, and experts predict things will get worse as many of the state’s largest companies feel the effects the European financial crisis and slowing growth in China.
The U.S. Bureau of Labor Statistics reports the state lost an estimated 1,400 manufacturing jobs in September. That’s been followed by several layoff announcements that suggest the final quarter of the year could see steeper declines, the Indianapolis Business Journal reported.
“We’re going off a cliff,” said Michael Hicks, director of the Center for Business and Economic Research at Ball State University. “The question is, do we go off like Thelma and Louise, or do we go off with a rope and belay team?”
This recovery stall, as the AP put it, comes on the heels of immense job growth in manufacturing across the state. Since 2010, EMSI estimates Indiana has added the third-most manufacturing jobs — more than 40,000 — of any state. Its 9% growth is good for fifth in the U.S. over that time.
No MSA in Indiana has grown its manufacturing base faster than Columbus. And as the table below shows, Columbus is tied for fourth in manufacturing job growth among all MSAs in the U.S. with at least 1,000 jobs in the sector.[table "471" not found /]
But manufacturing can be volatile, and Columbus knows firsthand the ups and downs that come with it. The metro area’s unemployment rate was a healthy 5.4% as of September. But at the end of the recession, it stood at 11.5%.
A more diversified industry mix might have helped Columbus withstand the downturn. But if it weren’t for manufacturing, Columbus wouldn’t be the fifth-fasting growing MSA in America either.
Photo of Cummins headquarters in Columbus via Flickr (Pavel Trebukov)