Economy: Columbus Advantage

Recent economic development successes have Columbus poised to outperform the state and the nation in 2024. Earlier this year, Pratt & Whitney announced the expansion of its operations in Columbus, which will create about 400 jobs. In mid-2022, AFB International announced that it would bring a new pet food manufacturing facility, along with about 100 jobs over five years, to the Muscogee Technology Park. The new plant is slated to begin operations in 2024.

The region also has other advantages that will deliver economic growth, including Fort Moore (formerly Fort Benning), Columbus State University and Mercer University’s new medical school. The area’s large insurance industry should help insulate the local economy from the ups and downs of the business cycle.

Exports make up only 3.4% of GDP, which means the economy is not too vulnerable to sudden shifts in global conditions or trade shocks. The cost of living is low, and the quality of the workforce is improving. People over 40 account for a lower percentage of the city’s population, while those 40 and under account for a higher percentage. As the younger generations climb the career ladder and have kids, it will likely boost the city’s economy.

Thanks to Fort Moore, one out of every five jobs in the metro area is a government job. Indeed, Fort Moore is the largest employer in Columbus, followed by TSYS, Aflac, Piedmont Columbus Regional, St. Francis/Emory Healthcare, Pratt & Whitney, Anthem Blue Cross Blue Shield, Synovus, Columbus State University and West-Rock.

Defense-friendly politics favor Fort Moore. Over the last five years the base’s mission and staffing levels have increased substantially, and higher military pay raises are expected in 2024.

The base will continue to be the most important driver of Columbus’ economy. Over the last decade, the Army located its Security Force Assistance Brigade, Security Force Assistance headquarters and the Military Advisor Training Academy, which trains soldiers and officers for the Security Force Assistance mission, at the base. In 2019 the U.S. Immigration and Customs Enforcement (ICE) announced plans to build a new training complex at the base, as well.

Two private-sector industries are vital to the Columbus economy: financial activities and leisure and hospitality. Higher spending by consumers and loan growth have favored top-line growth for firms that provide financial activities, but due to greater efficiency, the number of jobs has not increased.

In 2024, nationally, consumer spending will likely slow, which will also affect Columbus. Mortgage originations will be much lower than a few years ago. These shifts will restrain the growth of the area’s large financial activities industry. Fortunately, Columbus’ insurance industry is not as cyclical and therefore will help cushion the economy.

The region’s leisure and hospitality industry fully recovered from the pandemic recession in 2021 and attained new heights in 2022-23. The industry will continue to expand in 2024, but at a more moderate pace. The prospects are better for leisure travel than for business travel.

The outlook for healthcare is good, but the area’s weak population growth limits the industry’s potential for long-term growth. Nonetheless, the John B. Amos Cancer Center expansion and renovation and a new Veterans Administration outpatient clinic will help keep patients closer to home. The Mercer School of Medicine’s newly expanded campus in Columbus will also support the growth of the health services economy.

Columbus State University is a pillar of the local economy and has been a reliable source of economic growth. Its impact on the Columbus metropolitan statistical area (MSA) was 2,844 jobs in fiscal year 2022, due in part to the return of face-to-face instruction and more in-person events.

Plus, Columbus State’s annual crop of newly minted graduates increases the pool of talent available locally and will help attract new high-tech businesses as well as spur entrepreneurial activity. At present, high-tech accounts for only 2.6% of total employment compared to 5.5% of all U.S. jobs.

As of the second quarter of 2023, single-family home prices in the Columbus MSA were 35% above their pre-pandemic peak. The year-over-year percentage gain was 3%. Home price gains were smaller than those posted by the state due to slower population and job growth. Because the area’s homes are not significantly overvalued, prices are unlikely to decline. Housing-related employment accounts for 11% of the area’s jobs compared to 10% of U.S. jobs.

With so much to look forward to, Columbus will continue to charge ahead.

Jeffrey Humphreys is the Director of The Selig Center for Economic Growth at the University of Georgia’s Terry College of Business.