Bullish On Columbus
The economic outlook for Columbus is good. The local economy will grow more rapidly than it has at any time since 1999. Even better, I expect the pace of economic growth in Columbus to accelerate slightly. And that’s just the opposite of my expectation of slower growth for both the state and the national economies. I suspect that 2008, 2009, 2010 and 2011 will be truly phenomenal years.
Why am I so bullish on Columbus? First, Columbus will continue to benefit from several major announced expansions by existing employers. Obviously, growth at both Fort Benning and Aflac underpin my optimism. The new Kia plant also is a factor. But, it’s not just mega projects and mega expansions that will fuel economic growth. For example, improving conditions in the aviation industry will prompt several local companies to add workers.
After two delays stemming from the bribery scandal in Korea involving Kia’s chairman, construction has finally begun on the proposed $1.2 billion Kia Motors auto assembly plant that is just to the north of metro Columbus. That’s a huge relief. I was concerned about whether or not that project would ever get going.
Even though the Kia plant will technically be located on the western fringe of the Atlanta metro area, the plant will be much closer to the core of the Columbus area. One thing to keep in mind, however, is that in 2007 the impacts associated with building the Kia plant probably will not be too large. I suspect that we are mostly talking about spending by engineers, planners and others involved in site preparation.
Now, let’s look more closely at what’s going on at Fort Benning. The planned expansion there constitutes the largest announced economic development project in the entire state. According to the Fort Benning Futures Partnership, the number of permanent military personnel working at the base will grow by about 5,500. Add in about 5,600 civilian employees and contractors, and you get about 11,000 new permanent jobs.
Conservatively, the multiplier effects associated with spending by people who land these new jobs should create at least 4,000 more positions in the off-base economy. It’s important to recognize that we have yet to actually feel much of the economic impact of these planned expansions at Fort Benning. Thus far, few new jobs have been created; the big economic push will begin in 2008. That’s when the Armor School begins to move in. The lion’s share of the new base-related jobs will be created over three years – 2008, 2009 and 2010.
Now let’s look at Aflac. A little over a year ago, Aflac announced plans to expand its employment in Columbus by 2,000 jobs over five to seven years. Two recent developments lead me to believe that those workforce expansion plans should easily be realized – if not surpassed. First, the Japanese economy appears to be moving from a no-growth era to a moderate growth era. In my opinion, Japan’s economy is in the best shape that it has been in since I started working at UGA some 18 years ago.
That’s great news for Aflac, which obtains about two-thirds of its revenues in the Japanese market. I’m also encouraged by Aflac’s recent focus on marketing insurance products to Hispanics living in the United States. The U.S. Hispanic market is growing rapidly and is underserved with respect to insurance and other financial services.
The combined employment impact of expansions at Fort Benning and Aflac will be about 19,000 jobs. On average, these two employers alone should generate about 4,000 jobs per year for the next five years.
So, why am I only expecting about 2,500 new jobs in Columbus in 2007? The bulk of job creation stemming from Fort Benning’s planned expansion won’t occur until 2008, 2009 and 2010. So, my projections for job growth in 2007 must reflect that timing. Also, we’ll have to wait a while before many of the new jobs associated with the Kia plant are actually created.
The bottom line is that Columbus is poised for substantial growth, but the big push – in terms of actual job creation and population gains – won’t begin until 2008. That leaves about one more year to adjust business plans to tap into several years of fast-paced economic growth.
Dr. Jeffrey Humphreys is the director of the Selig Center for Economic Growth at the Terry College of Business at the University of Georgia.