The Columbus metropolitan statistical area’s economic growth was essentially flat over the past decade on record as growth in the local manufacturing sector stalled following strong gains during the previous 10 years.

From 2013 to 2023, the Columbus metro area’s real gross domestic product (GDP) edged down 1.6%, the lowest growth rate among Indiana’s metro areas during the period, according to the most recent figures from the U.S. Bureau of Economic Analysis.

By comparison, the Columbus metro area’s real GDP grew 75% from 2003 to 2013 — the sixth highest growth rate among 385 U.S. metro areas over the decade and the highest among Indiana’s metro areas.

Indiana’s real GDP increased around 14% from 2003 to 2013 and 21% from 2013 to 2023, while U.S. real GDP grew around 20% and 27% over the same 10-year periods.

Real GDP measures the total value of goods and services produced within a region after accounting for inflation. The Columbus metro area includes all of Bartholomew County.

Experts largely attributed the decline in local real GDP to a sustained dip in durable goods manufacturing that started around 2014.

The Columbus metro area’s economy is heavily rooted in durable goods manufacturing, accounting for 47% of real GDP in 2023, compared to 16% of Indiana’s real GDP and 6% of U.S. real GDP.

“From 2003 to 2013, everybody grew a lot, and by the way, there was the great financial crisis in there, which had quite an impact,” said Steven Mohler, assistant professor of management at IU Columbus. “…Columbus grew, grew, grew in the 2003-through-2008 period and bounced back from the great financial crisis reasonably well. But then, in 2014, 2015, 2016, we started to feel the impact of losses in durable goods (manufacturing).”

Contributing factors

The data shows that the economic output of durable goods manufacturing in the Columbus metro area, when accounting for inflation, soared over 206% from 2003 to 2013 but declined 19% from 2013 to 2023.

Mohler said the decline could be related to changes in the industries that local employers serve, including declining auto sales and relatively flat sales in medium- and heavy-duty trucks.

“Overall, what we in Columbus supply through our manufacturing … over the period that we’re talking about are declining slightly,” Mohler said. “…When you say, ‘Well, what would we expect in Indiana and Columbus? Well, flat and down a little bit.’ …And that’s what we see for Columbus.”

“I think we’re just seeing some of the overall change in the industries we serve,” Mohler added.

A shortage of skilled labor could also be playing a role, experts said. The Columbus metro area’s labor force peaked in 2015 and has yet to return to the same levels, according to the U.S. Bureau of Labor Statistics.

The metro area’s labor force averaged around 38,300 workers in 2023, down from an average of around 42,000 workers in 2015.

Additionally, the COVID-19 pandemic may have impacted manufacturers differently than the Great Recession, experts said.

From 2019 to 2020, the Columbus metro area’s real GDP fell 6.9%, while Indiana real GDP declined 2.9% and U.S. real GDP declined 2.2%, according to the Bureau of Economic Analysis.

However, other areas of the state and country have been quicker to rebound, the data shows.

The Columbus metro area’s real GDP rose 8.4% from 2020 to 2023 and was 0.97% higher than 2019 levels. By comparison, Indiana real GDP increased 12.4% over the same period and was 9.1% higher than 2019 levels, while U.S. real GDP increased 11.9% and was 9.4% higher than in 2010.

“The Great Recession definitely had an impact in the sense that everybody got nervous about their supply chain partners, because nobody knew who was going to go bankrupt next,” said Mark Frohlich, associate professor of operations management at the IU Kelley School of Business and the director of the Center for Excellence in Manufacturing. “…What happened in COVID was a whole different set of issues around trust. …That shock to manufacturers (during the pandemic) was in response to the way a lot of them had just gotten so lean. They’d set their supply chains up to be just-in-time driven.”

State and national trends

While economic output of durable goods manufacturing dipped and stayed relatively flat in the Columbus metro area from 2013 to 2023, when accounting for inflation, it grew around 31% statewide and 15% nationwide.

“(Manufacturing) for many, many decades, has been among the most productive industries (in Indiana), and it grows,” Frohlich said. “Of course, today in this country, we don’t make … some of the things that we used to make back in the ‘70s and ’80s. But you know, that doesn’t mean we’ve lost our manufacturing muscle, if you will. It’s been re-concentrated, obviously into higher value added type sectors.”

One of the biggest changes in manufacturing over the 20-year period has been the shift towards more automation, which Frohlich said he expects to continue.

“Looking back over the last 20 or so years, probably the biggest change I’ve noticed … is how manufacturing has gone from being labor intensive to much more capital intensive, and you just see that all around where you’re located, down in Columbus,” Frohlich said. “…What has always really caught my attention is the ratio of people to robots now and then. Twenty years ago, you probably would have had 10 workers or more for every one robot. And now there’s quite a number of manufacturers in our state … that have kind of almost got to parity, where there’s one robot for one worker, and some of them have kind of crossed that invisible line and gone to two or three robots for every one worker.”

Earlier this month, an analysis by an economist and researcher at the Federal Reserve Bank of St. Louis found that U.S. manufacturing “has been slowly recovering over the past decade,” with 65,000 new manufacturing establishments coming online from 2014 to 2024, with Florida, Texas and Georgia driving most of that growth.

Food manufacturing alone accounted for nearly half of the entire sector’s job growth and about one-fifth of the increase in manufacturing establishments during the 10-year span, the analysis found.

In recent years, three food manufacturers have announced plans to build production facilities in Bartholomew County, including Ninth Avenue Foods, King's Hawaiian and Grillo's Pickles.

The impact of those facilities on local real GDP is not included in the most recent federal data.

Evolving economy?

While the local economy remains heavily rooted in durable goods manufacturing, federal data suggests that it is less so than a decade ago.

In 2013, durable goods manufacturing accounted for 60% of the area’s real GDP. By 2018, that figure had dropped to 52% and then to 47% by 2023, according to the Bureau of Economic Analysis.

At the same time, several areas of the local economy grew from 2013 to 2023.

The economic output of professional and business services in the Columbus metro grew 66% from 2013 to 2023 and accounted for 9% of the area’s real GDP in 2023.

Additionally, government and government enterprises grew 22% over the same period, accounting for 7% of real GDP in 2023, while retail grew 59%, accounting for 5% of real GDP.

The economic output of non-durable goods manufacturing, which accounted for 3.7% of real GDP in 2023, also grew 40% from 2013 to 2023.

However, the Columbus metro area could be at risk of falling behind if local employers do not successfully pivot to emerging trends and technologies, experts said.

“As we move to more ecologically friendly transportation systems, there is a risk of us falling behind,” Mohler said. “Now, keep in mind, Cummins is making great strides in the (electric vehicle) area for trucks, but a lot of the other areas we serve are based on internal combustion, and that creates risks for us, especially as manufacturing driven as we are. …If we’re not innovative enough, then the exhaust systems we make, some of the other products we make, may not go into the next generation of vehicles, and that therefore we’re going to see a decline.”

“Columbus is rich in talent,” Mohler added. “We have a lot of folks with experiences and education that can support diverse industries, a lot of people with bachelor’s degrees in engineering and marketing and finance. …We can diversify. We have talent. We just need to identify how best to use that.”
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