Columbia economy faces soft spot amid strong performance

COLUMBIA — Don Laird, president of Columbia’s Chamber of Commerce, said though Columbia is going through an economic soft spot right now, the overall picture is still bright.

“If you look at how it performs overall, it is a very enviable community,” Laird said.

He said at the top of Columbia’s list of the economic strengths is its three main components: education, health care and insurance.

“They are very great economic engines to help fuel the business here,” he said. “Many other companies that are here can feed off of these.”

In fact, there are four major stable employment sectors in Columbia, according to Regional Economic Development Inc. Among the top 30 largest employers; 10,901 work in education; 7,636 in health care; 30,023 in government; and 2,713 in insurance.

Peter Mueser, MU economics professor, agreed that part of the reason Columbia’s economically strong is because these businesses are not cyclical. Mueser said unlike manufacturing industries, they do not rise and fall with the national economy.

Columbia itself is also growing as these staple industries do. From April 2000 to July 2007, Boone County’s population increased 12.5 percent to 152,435, according to the Missouri Census Data Center. More than half of that growth came from people moving here.

To attract people, Columbia must create jobs. Fostering this growth is a main goal of REDI.

REDI is a public and private organization. It was established in 1988 to promote economic growth in Columbia and Boone County by helping bring more basic jobs to the area. The organization finds land sites, works to get them shovel ready for businesses who want to move here or expand in the area.

Once the sites are ready for construction, then REDI lists them on its Web site and markets to corporate real estate agents and site selectors across the country. Genalee Alexander, public relations director, said REDI markets to businesses that would benefit from the specific aspects Columbia has to offer. For example, it recruits companies that need an educated work force, life science businesses that could benefit from the university research, and manufacturing companies that could benefit from being in a central location near Interstate 70.

“That is what a strong economy is all about: jobs for your citizens,” Alexander said.

When REDI finds a business that is interested, the staff helps it set up in Columbia. Alexander said it is hard over the years to keep track of how many businesses REDI has helped or jobs it has helped create, but according to the City of Columbia Finance Department, Business License Division, there has been an increase of business license accounts from 4,170 in 2000 to 4,960 in 2008.

One of the recent companies REDI worked with is ABC Laboratories. In a four-year process, REDI helped the business receive a 50 percent tax exemption on real- and personal- property tax for up to 10 years.

David Meyer, REDI marketing director, said the ABC Labs will bring 280 new jobs to the area in the next five years.

“These will be high-paying, high-benefit jobs that will be helpful to the economy,” he said.

According to the Missouri Economic Research and Information Center, the average unemployment rate for Boone County was approximately 3.2 percent in 2006 and 3.6 percent in 2007. Missouri’s rate was 5.3 percent in 2005, 4.8 percent in 2006 and 5 percent in 2007. According to the Bureau of Labor Statistics, the current U.S. unemployment rate is 5.1 percent.

Mueser said he thinks MU has a lot to do with the city’s low unemployment rate.

“All of those college students go out and need those jobs,” he said. “They are not going to sit around and be unemployed.”

He said that college students look for short-term work and mostly will not sit around to wait for a job in a specialized career like someone who has been laid off.

In the fourth quarter of 2007, Missouri had a 90.3 cost of living rate, which is positive for growth and employment. This ranked the state as fifth lowest in the U.S, according to the Economic Research and Information Center.

But, though Boone County has low unemployment rates and cost of living, it is having trouble creating middle-class wage jobs. According to the center, in 2006 the average wage for Boone County was $32,563. The current average wage is $29,082.

Meyer said he thinks this decrease is partially because of the decrease in manufacturing jobs. According to the economic research and information center, from 2006 to 2007, the number of manufacturing jobs in Boone County decreased by 158 to 4,481.

“That has been statewide and nationwide,” Meyer said.

He said that not only are jobs being moved out of the U.S., but also new automated technology is being brought into companies, which does not require as many workers. Although the Boone County numbers are affected by layoffs such as those at 3M, Meyer said the city and county are working together to attract high quality jobs to the area.

Columbia also lost jobs in other sectors in 2007 compared to 2006, according to the Missouri Economic Research and Information Center. Construction employment fell 127 to 4,208, and wholesale trade employment fell 89 to 2,637.

The loss of construction jobs is reflected in the building permit figures. According to figures from Boone County Planning and Building Inspection and City Protective Inspection Department in 2006, Columbia and Boone County issued 5,670 building permits for a valuation of $390 million. In 2007, the two units issued 2,820 permits for a valuation of $305 million.

Single-family construction permits peaked in 2004, when the two government units issued 1,504 permits, and in 2005, when they issued 1,582 permits. That fell to 826 permits last year.

Laird said though the city can never replace jobs lost one-for-one, Columbia has the qualities to continue to attract good jobs to try to increase the numbers.

“Columbia overall has had pretty good luck bringing jobs to the city,” he said, “We have quite an educated work force, and that is appealing to businesses.”

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