Albany New and Louisville MSA
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Dagney Faulk Assistant Professor of Economics, Indiana University Southeast, New Albany
n the year 2001, economic activity in southern Indiana and the Louisville metropolitan area continues to defy national economic trends. Continued employment losses and increases in the unemployment rate in the Louisville area were not as extreme as in other parts of Indiana, Kentucky, and many parts of the U.S. The seven counties in the Louisville Metropolitan Statistical Area (MSA) are Clark, Floyd, Harrison and Scott in southern Indiana and Bullit, Jefferson and Oldham in northern Kentucky. The following analysis examines various measures of economic growth in the Louisville MSA and its component counties. Three additional Indiana counties--Crawford, Orange, and Washington--in the southern Indiana labor market area are included when data are available. Labor Markets Throughout 2001, the unemployment rate in the Indiana counties in the Louisville metropolitan area continued to be below or even with that of Indiana as a whole and below that of Kentucky and the United States as shown in Table 1. The September 2000 unemployment rates in the Kentucky counties of the metropolitan area were well below the Kentucky state average at 3.2 percent, 4.0 percent, and 2.2 percent in Bullit, Jefferson, and Oldham counties, respectively. Scott is the rst county in the MSA to experience a substantial increase in unemployment. The increasing national unemployment rate indicates that other counties in the Louisville MSA may follow. However, the September 2001 unemployment rate in many counties is below that of 2000.
2000 Annual Average 3.3 5.9 3.0 2.9 6.2 3.2 4.5 3.2 4.1 4.0 Annual Average (Jan.-Sept. 2001) Sept. 2001 2.8 3.6 4.5 3.8 2.4 2.8 2.7 2.7 8.0 8.0 4.1 4.3 5.4 6.2 3.7 3.9 4.6 4.4 4.5 4.7
Recent data for the Louisville MSA (see Table 2) indicate that the average level of nonagricultural employment increased by 7,700 jobs through September of 2001. Manufacturing employment remained steady in southern Indiana and decreased by about 2,400 jobs in the MSA. Non-manufacturing employment remains steady in southern Indiana and grew by about 10,000 jobs in the MSA. The MSA job growth in the non-manufacturing sector was led by increases in the services and retail sectors. Other non-manufacturing sectors remain stable in southern Indiana and the MSA. Recent data from the Indiana Department of Revenue indicate that 37,500 workers commuted daily between southern Indiana and Kentucky in 1999 (see Table 3). Several major retail chains are expanding operations in southern Indiana, and the retail sector will experience substantial growth over the next few years. Home Depot and Kohls have recently opened in New Albany, as has a 500-room hotel at Caesars Casino in Harrison county. These developments will further increase the demand for retail and services workers in southern Indiana. Wages and Hours in Manufacturing Manufacturing is the only sector for which wage and salary information is collected for the southern Indiana area. As shown in Table 2, average hourly earnings in manufacturing industries are consistently below that of Indiana as a whole. Hourly earnings have increased over those of 2000, but not enough to suggest that inationary pressures are evident. While there is no standard measure of labor productivity for metropolitan areas, national averages suggest that labor productivity in manufacturing has increased substantially over the past decade, thus holding output prices and wages down. Average weekly hours worked in the manufacturing sector have remained stable over the past year, at around 40 hours per week in the southern Indiana counties. There was a noticeable increase (of almost two hours) in September 2001, which may indicate that the level of overtime increased. Average weekly earnings also increased substantially (almost $50) in September 2001, hence the increase in average hourly earnings for the month. Consumer Activity Sales and Marketing Management magazine's 2001 Survey of Buying Power shows that growth of retail
Indiana Business Review Outlook 2002
Table 1 Unemployment Rate (not seasonally-adjusted)
1999 Annual Average 2.8 5.7 2.3 2.6 7.0 3.1 4.6 3.0 4.5 4.2
Clark, IN* Crawford, IN Floyd, IN* Harrison, IN* Orange, IN Scott, IN* Washington, IN Indiana Kentucky U.S.1
Sources: Indiana Department of Workforce Development and Kentucky Cabinet for Workforce Development *Counties in the Louisville Metropolitan Statistical Area 1 The October 2001 seasonally-adjusted unemployment rate for the U.S. was 5.4 percent. October rates were not released for states and counties at the time of writing.
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Table 2 Nonagricultural and Manufacturing Employment sales has slowed over the past year. Total retail sales in the Louisville MSA increased by 3.3 percent from Annual just over $13.1 billion in 2000 to just over $13.5 billion 2000 Average 1999 in 2001. Harrison, Bullit, and Floyd counties led this Annual (through Annual Average Average Sept.) Sept. 2001 growth (on a percentage basis) with increases in retail sales of 6.01, 5.98 and 4.75 percent, respectively, for NONAGRICULTURAL EMPLOYMENT these counties between 2000 and 2001. Southern Indiana Counties1 (000) 94.4 95.0 96.2 94.9 Activity in the residential housing market has Louisville MSA2 (000) 579.5 591.6 599.3 603.1 increased over the past year. Declining mortgage rates, now at the lowest level in over 30 years, Manufacturing Empl. are undoubtedly responsible. Housing sales through Southern Indiana Counties (000) 20.3 20.3 20.8 20.4 October 2001 in the southern Indiana area1 totaled Louisville MSA (000) 89.0 88.2 85.8 84.4 Durable Goods 2,242 compared with 1,840 for the same period in Southern Indiana Counties (000) 11.2 11.0 11.6 11.2 2000. This is the largest number of homes sold since Louisville MSA (000) 50.4 50.7 49.1 48.1 IU Southeast began tracking this indicator in 1990. Nondurable Goods The average sales price was $131,670 for JanuarySouthern Indiana Counties (000) 9.1 9.3 9.1 9.2 October 2001 sales, up slightly from the year before. Louisville MSA (000) 38.6 37.5 36.6 36.3 Approximately 73 percent of homes sold in 90 days or Avg. Hourly Earnings, Manufacturing ($) less in 2001, up slightly from the 2000 gure. Southern Indiana Counties 13.18 13.40 14.55 15.45 In contrast to housing sales, residential Indiana 15.26 15.83 16.15 16.33 construction as measured by residential building Source: Department Indiana of Workforce Development permits for new single-family units decreased from the 1 Clark, Floyd, Harrison and Scott counties. The Indiana Department of Workforce Development refers to 2000 level and the 1998 peak. The largest decrease this as the New Albany area. in the number of single-family permits, 336 (19.5 2 The Louisville MSA is Clark, Floyd, Harrison and Scott counties in Indiana and Bullit, Jefferson and percent), occurred in Jefferson County. The largest Oldham counties in Kentucky. percent decline occurred in Harrison County with a 54.1 percent decrease. The number of multifamily permits increased in Jefferson and Clark Counties. Gaming at Caesar's Casino continues to expand. Table 3 The turnstile count for September of 2001 was 211,380 Commuting Flows, 1999 patrons, a 19 percent increase over September 2000. The turnstile count for January through September Working in.......... Kentucky Clark Crawford Floyd Harrison Orange Scott Washington 2001 was 38.5 percent higher than the same period Living in last year. Clark 16,458 40,805 14 4,379 395 8 323 172 2001
Crawford Floyd Harrison Orange Scott Washington Kentucky 692 12,717 5,321 136 808 1,393 172 4,993 1,465 54 771 1,488 708 3,962 19 148 95 0 13 10 184 27,666 2,031 49 169 726 479 645 752 14,215 47 27 274 264 171 17 20 10,128 5 232 11 2 7 23 3 10,039 373 30 22 122 100 203 126 11,775 24
Source: Indiana Department of Revenue; retrieved from STATS Indiana
Growing Population Recently-released data from the 2000 Census show that the population of southern Indiana and the Louisville metropolitan area is growing. Population in the metro area increased by over 8 percent (76,586 persons) between 1990 and 2000. In percentage terms Oldham County led growth, followed by Bullit and Harrison counties. The portion of the MSA population living in southern Indiana increased slightly over the decade. The number of children in the Louisville metropolitan area increased, which has implications for school nance. In percentage terms, Oldham and Bullit counties, with 32.6 and 19.4 percent increases, respectively, led growth in the number of children, well above the MSA growth rate. While the number
Indiana Business Review Outlook 2002
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of households increased, the average number of persons per household decreased in all counties of the metro area and the southern Indiana labor market area. During 2001, Louisville and the southern Indiana area have settled into a period of slower growth. With the exception of housing sales, consumer activity, as measured by single-family residential building permits and retail sales, has leveled off. Employment growth in southern Indiana appears to have leveled off over the past year with stable manufacturing and non-manufacturing employment. In the Kentucky counties, there have been decreases in manufacturing employment and signicant increases in nonmanufacturing employment. The unemployment rate is still relatively low in the metro counties. National indicators released over the past few weeks indicate that the U.S. economy is in recession. Undoubtedly the economy of the Louisville region will begin to show signs over the next few months. Notes 1. Data on home sales from the Southern Indiana Realtors Association multiple listing service cover the counties of Clark, Crawford, Floyd, Jefferson, Scott and Washington.
Richmond
Ashton I. Veramallay Professor of Economics and Director, Center for Economic Education, Indiana University East, Richmond
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he Richmond-Connersville-New Castle (RCNC) area economy can expect a rebound in 2002. The erstwhile slowdown or current downturn in the United States economy is affecting local employment, income and growth.The manufacturing sector is in recession. Manufacturers in October 2000 turned in their worst performance since February 1991, when the United States was mired in ...