94 years of economic insights for Indiana

The IBR is a publication of the Indiana Business Research Center at IU's Kelley School of Business

Richmond

Economic Development Corporation of Wayne County, Indiana

National and world trends continue to impact the economy in Wayne County, although actions taken in the past several years to encourage business growth appear to be paying off. Many developments in the past eighteen months are positively impacting the local economy.

In the retail sector, Richmond Village is providing valuable new expansion space in the commercial corridor along East Main Street. New businesses located there include Kohl’s and Walgreens, while Frisch’s Big Boy moved there from a location on the north side.

The development of the IU East, Ivy Tech, Purdue and Reid Hospital campuses is expected to have a major impact. The direct connection from the academic campus to the hospital campus will help strengthen the connection between the health care industry and academic institutions. IU East is placing renewed emphasis on biosciences and Ivy Tech is strengthening its health care programs, in addition to adding agriculture and agribusiness programs.

Redevelopment of the current Reid Hospital by its new owners will not only add jobs to the economy but may also help provide new business services that are currently not sufficiently available in the community, such as lab space for life science research.

Vitality in the community is indicated by the redevelopment of the former Carpenter Bus factory into the Rose City Business Park, as well as the attraction of Dot Foods, a major distributor of foods. Additionally, two more Japanese auto parts companies have opened here this year, Yukiya USA Gasket & Sealing Co. and TBK America.

The county’s location within the hundred-mile area attractive to suppliers for Honda’s new plant at Greensburg should draw more auto parts manufacturers. Some local manufacturers are already supplying parts to automotive companies elsewhere in Indiana, including Toyota, Subaru, and Honda.

Indeed, the manufacturing sector has been strong this year, with expansions reported at many local plants including Autocar, Taconic Farms, Osborne International, Howa, Johns Manville, and Innatech.

Housing and building has also proceeded at a fast pace. In the first nine months of 2006, the city of Richmond had thirty-three new one- or two-family residential starts valued at $6.28 million and twenty-one new commercial starts valued at $14.3 million.

Planning for Growth

Wayne County has, over the past decade, become known for its aggressive approach to seeking new jobs. Existing businesses have generally been expanding in the past year but several trends work against real economic progress.

While the number of local companies engaged in manufacturing is expected to grow, the number of manufacturing jobs may only stay even or perhaps shrink. Innovation has led to large increases in productivity per employee. (1) The Bureau of Economic Analysis (BEA) reports that from 1997 to 2005, Indiana employment in manufacturing declined 15.1 percent (from 689,575 to 585,438), (2) while the gross state product (newly renamed by the BEA as the gross domestic product by state) in that sector grew 38.9 percent (from $48.4 billion to $67.2 billion) for the same period. Many local companies have reported similar results.

This is important because average pay in manufacturing is higher than for most other segments. For instance, the health care and social services industry pays an average weekly wage of $614 and employs more people locally than any other segment besides manufacturing. Compare this to $760 a week for manufacturing jobs. This is significantly higher than the average weekly rate of $211 that accommodation and food services employees earn.

The county’s unemployment rate in the past ten years has generally maintained a range of 0.3 to 1 percentage points higher than the state average. In August, the state rate of 5.3 percent was 1.1 percent less than Wayne County’s 6.4 percent. In September, the state rate was 5.1 percent, while Wayne County registered 5.6 percent (see Figure 1). Some of this improvement is because of a temporary spike in construction, where work on the new Reid Hospital will employ 450 people by this winter. The new retail outlets on the east side also account for about 200 more new jobs.

Figure 1
Unemployment Rates, September of Each Year

Figure 1

If Wayne County is to maintain current employment levels at pay levels that are attractive to workers, new kinds of jobs must be developed by existing employers or new companies. To that end, the Life Science Initiative, a project of the Richmond–Wayne County Chamber of Commerce that is supported by the Economic Growth Group, will become more important.

The county must lay the groundwork and develop a support system for entrepreneurial ideas so that they can become viable businesses in life sciences and other advanced manufacturing.

The county is experiencing some development in agriculture and agribusiness and is now involved in a process of planning for economic development related to agriculture. The goal, as in other sectors of the economy, is to be prepared when opportunities are available to expand existing businesses or attract new ones.

Additionally, Richmond and area towns have tough decisions to make to prepare for growth. Already, some are facing a dilemma about how to pay for improvements that are needed for their sanitary sewage systems and other infrastructure.

Traditionally, Wayne County’s economy has risen and fallen on the tides of the state, national, and worldwide economies. Although the picture appears to be good moving into 2007, it is likely that the county’s economy will still be largely dependent upon outside factors.

Notes

  1. Thomas P. Miller and Associates, “What Indiana Makes, Makes Indiana: Analysis of Indiana Manufacturing,” January 17, 2005.
  2. The 1997 data are based on the SIC classification system.