Director, Indiana Business Research Center, Kelley School of Business, Indiana University
Things are looking brighter in many respects for the Bloomington area economy than they have in recent years. The city's population grew by an estimated 146 residents last year (2006), reversing a multi-year trend during which it decreased by hundreds of people annually. According to Census Bureau estimates, Monroe County grew by 1,140 residents, representing population growth of 0.9 percent, which is more than twice the rate of any other year this decade and the fastest growth among all of Monroe's neighboring counties. The county is forecast to gain about 2,160 more residents by the end of the decade.
For most of 2007, total payroll employment in the Bloomington Metropolitan Statistical Area (or MSA, comprising Monroe, Owen, and Greene counties) has been higher than a year earlier, reaching 84,200 jobs in September.
The most recent data for counties represent the first quarter of the year, during which Monroe County's payroll employment was up by 858 from a year earlier, with an increase of twenty-nine establishments. This represents a respectable growth rate for this area.
Manufacturing employment in the county has finally stopped shrinking after several years, with recent months averaging about 100 more manufacturing jobs over the year. This is a very welcome turnaround, especially considering that the county has gained six more manufacturing establishments this year (equaling 113 in the first quarter of 2007). Manufacturing wages reached a record high in current dollars (averaging about $789/week), though in inflation-adjusted terms they've been roughly level over the past year. Either way, the multi-year decline in factory wages in Monroe County appears to have ended this year.
Sectors gaining more than 100 jobs over the year include health care and social services, administrative and support services, transportation and warehousing, and retail. The construction sector lost 223 jobs from the first quarter of 2006 to the same period in 2007, partially reflecting a slowdown in home construction. Some large-scale projects at Indiana University that have begun since then, however, should help reverse this loss.
Monroe County is forecast to gain about 500 to 800 jobs in 2008, with construction picking up as the year progresses. Manufacturing should hold its own, and life sciences firms could add a few hundred jobs if they can find enough skilled workers.
Personal Income: Gaining on the State
Per capita personal income (PCPI) grew in the county by $1,160 in the most recent year for which data are available (2005). This broad measure of income from a number of sources shows that Monroe County grew at the same rate as the nation, with county PCPI equaling 83.5 percent of the national figure. However, relative to Indiana, which is growing more slowly, the county moved over the year from 91.7 percent up to 92.3 percent of the state average (see Figure 1). These trends are expected to continue in the year ahead.
Monroe County Per Capita Personal Income
Economic Output: Encouraging Growth
The U.S. Bureau of Economic Analysis has recently released estimates of gross domestic product (GDP) at the MSA level for the first time. These preliminary figures on economic output (valued in dollars) show that the Bloomington metro area's output from the manufacturing sector grew by 11.6 percent over the year (2005), twice the national rate. The retail sector's output grew by a slow 2.3 percent, less than half the national rate. The professional and business services sector output expanded by 13.3 percent, well above the national rate of 8.4 percent. These are encouraging signs of growth for the local area.
Real Estate: Slow, but Better than Many Places
The Bloomington area real estate market, though slow, is faring substantially better than many places. The housing bubble that raised prices greatly in many parts of the country never took hold in most of Indiana, so our housing market didn't have as far to fall when the bubble burst. Residential sales are down about 6 percent to 7 percent so far in 2007, and home prices are generally flat. Demand is actually strong in the below-$250,000 range, though supply is limited; higher priced homes are showing substantially longer time-on-market.
There's very little new speculative home construction under way, although custom homes continue to be built. The commercial (office and retail) space market is fairly busy, but very little new construction is underway, and supply is tight for good-quality office space. The overall real estate outlook for 2008 calls for slow growth most of the year, with a modest upturn later in the year as the housing and credit crunches ease.
Also in this Issue…
- Outlook for 2008
- The International Economy
- The U.S. Economy
- Financial Forecast
- Indiana Agriculture
- Fort Wayne
- South Bend-Mishawaka and Elkhart-Goshen
- Terre Haute
- Return to Table of Contents