Columbus continues to be ranked among the best communities in the country for economic opportunities.
The city tops Area Development magazine’s rankings of “leading locations,” according to its annual report that rates metropolitan areas based on economic and workforce indicators.
The publication rates Columbus as the No. 1 small metropolitan area in the United States, and the city is ranked second among all 379 Metropolitan Statistical Areas (MSAs) nationwide.
The U.S. Office of Management and Budget identifies MSAs as geographical areas with a relatively high population density and close economic ties throughout a region.
Metropolitan Columbus, with a statistical population of 76,794, is also the top-ranked MSA in the Midwest, according to the magazine report.
Jason Hester, executive director of the Columbus Economic Development Board, said outside recognition is a valuable tool when marketing the city to new businesses.
“Prospective companies and site consultants and even our own companies would expect us to sing our own praises,” Hester said. “But it is more beneficial when an outside, impartial body comes to this conclusion.”
This is the third consecutive year that the Columbus MSA has scored in the publication’s top three MSAs overall, achieving a top ranking in 2012 and the number three spot last year.
In its evaluation of Columbus, Area Development magazine identified a “perfect storm of economic growth” that has allowed Columbus to maintain its high ranking. It cites the boom in domestic production of engines and other components, Indiana’s right-to-work law and the city’s “under the radar charm,” as factors in economic growth.
“Manufacturing provides high value-added jobs that are always attractive,” Area Development editor Geraldine Gambale said. “Columbus also seems to have gotten its strategy together to provide a pro-business environment.”
Columbus also ranked second in the Milken Institute’s list of Best-Performing Small Cities in 2013, behind only Columbia, Missouri.
The nonprofit think tank’s list ranks the same MSAs as Area Development magazine does but focuses more heavily on growth in jobs, wages, salaries and technology output over a five-year period.
Minoli Ratnatunga, an economist at the Milken Institute, said the Columbus numbers are even more impressive because the study’s small-cities rankings include regions with more than 250,000 people. Area Development magazine identifies small cities as those with fewer than 160,000 people.
“It is among the smallest five that we rank, so relatively small changes can have large effects on the growth rate and the metro’s position in the ranking,” Ratnatunga said.
Columbus jumped from 112 on the Milken list in 2011 to 15 in 2012 and second in the most recent report.
Ratnatunga said consistency in the rankings is a common challenge among cities that are heavily linked to one industry.
“There is a lack of industrial diversity in the Columbus economy, and its position is volatile because it depends on manufacturing, which is a cyclical industry,” Ratnatunga said.
In 2012, when metro Columbus made the big move in the Milken rankings, the region added more than 1,000 machine manufacturing jobs, which was the sixth-highest absolute number among all 379 MSAs.
Hester said the city and the Economic Development Board continue to work toward developing a more diverse economy but also see opportunities to achieve more stability within the city’s core industry.
“We know that 37 percent of our employment is tied to manufacturing, which places us in the top 2 percent of all counties in the United States,” Hester said. “While that’s a strength, it does make us susceptible to global swings in the demand for manufactured products.”
Hester said one way to overcome that instability is to capitalize on the changes that are taking place within the manufacturing industry.
“A challenge for us locally is that for so many years people across the country have heard of the demise of manufacturing and thought that applied here,” Hester said. “What we are seeing is that advanced manufacturing is consolidating into centers of excellence, and Bartholomew County has become one of those.”
Cummins, for example, has increased its focus on developing products for the global market to help counter market fluctuations.
While some of those products are made in other countries, the technology is developed here, which increases the number of highly skilled, high-paying job opportunities beyond the production floor.
“It’s important for parents locally to understand that when they are thinking about what careers their children may pursue,” Hester said. “From everything we are looking at, we believe that there is a very bright future for manufacturing in this community in a lot of career fields.”