Anderson Forecast 2015
Professor of Finance and Economics and Dean, Falls School of Business, Anderson University
Historical, Long-Term Trends Are Negative. Following the Great Recession, persistent unemployment, a long-term downward trend in area employment, and an acceleration in the number of food stamp recipients suggest that Madison County and the greater Anderson community continue to face significant challenges to reach strong economic growth.
But It’s Getting Better. While negative historical trends continue to cloud the economic outlook for Madison County and the greater Anderson community, several indicators have improved since 2013.
Employment and Job Creation
Positive Unemployment Rate Trend: The unemployment rate for Madison County is nearly half what it was in 2009. As shown in Table 1, the unemployment rate declined from a high of 10.3 percent in 2009 to 5.8 percent as of September 2014. Recent trends are also improving. Table 2 indicates that over the last year, the unemployment rate for Madison County decreased substantially by more than 2 percentage points, from 8.0 percent in October 2013 to 5.8 percent as of September 2014.
Table 1: Annual Employment and Unemployment Rates
|Year||Employment||Unemployment Rate||Employment||Unemployment Rate|
*2014 data are from January to September.
Source: U.S. Bureau of Labor Statistics
Unemployment Rate Lagging behind Indiana: Unemployment in Madison County continues to lag behind Indiana as a whole. Table 1 shows the unemployment rate for Madison County as being higher than the state in five of the six last years. The same holds true in the monthly numbers over the last year. Table 2 shows Indiana’s unemployment rate from one year ago at 6.9 percent in October 2013, with a drop to 5.1 percent as of September 2014. Over the same period, the unemployment rate for Madison County dropped from 8.0 percent to 5.8 percent.
Table 2: Monthly Employment and Unemployment Rates
|Month||Employment||Unemployment Rate||Employment||Unemployment Rate|
Note: Data are not seasonally adjusted.
Source: U.S. Bureau of Labor Statistics
2014 Bucked the Negative Jobs Trend: Since 2009, the number of employed in Madison County declined for four straight years. Table 1 shows 2009 employment at 55,718 for Madison County falling each year to a low of 54,569 in 2013. However, from one year ago, the number of employed in Madison County increased to 57,127 as of September 2014, with a 3.6 percent increase in job growth (non-annualized) over October 2013. If this increase holds through the remainder of 2014, the increase in employment reverses a negative trend of four straight years of declining employment in Madison County.
Jobs Recovery Lagging behind Indiana: As indicated in Table 1, employment numbers in Indiana have been trending positive since 2011. Employment numbers in Madison County have just started trending positive in 2014 after four straight years of declines. However, the better news for Madison County is that local employment increased by 3.6 percent over the last year, compared to a 3.3 percent increase at the state level.
Madison County has historically lagged behind Indiana in educational attainment, but distinct improvements have been made over the past decade (see Figure 1).
Figure 1: Madison County Educational Degree Attainment
Source: U.S. Census Bureau
More Degrees: A higher proportion of Madison County residents age 25 and over have a high school diploma or have earned a college degree. In particular, 17.1 percent of the adult population have a bachelor’s degree or higher—up 2.7 percentage points since 2000.
Fewer Dropouts: Another sign of improvement is the decline in the proportion of the population age 25 and older who did not complete high school. The percentage of Madison County adults without a high school degree dropped from 19.9 percent in 2000 to 13.0 percent in 2012.
Economic climate can be gauged in part by changes in the number of food stamp recipients. As shown in Table 3, for the fifth straight year, the number of food stamp recipients increased in Madison County. However, the rate of increase has declined dramatically over the last several years: from a high of 15.8 percent (from 2009 to 2010) to a low of 2.0 percent from 2012 to 2013.
Table 3: Madison County Food Stamp Recipients
|Year||Recipients||Percent Change from Prior Year|
Source: STATS Indiana, using Indiana Family and Social Services Agency data
Outlook for 2015
It is anticipated that 2015 will be an “uptick” year. For 2015, the employment picture is expected to improve with a slight decline in the unemployment rate and a modest increase in employment. The unemployment rate looks to drop another 0.5-1.0 percent in 2015 as the economy continues to improve. The rate of decline could be a little stronger (in the 1.5-2.0 percent range); however, the improving economy will likely draw a number of previously frustrated unemployed back into the labor force. The best estimate is an unemployment rate of about 5.2 percent for 2015. Employment is expected to hold steady with a modest increase of about 0.5 percent in 2015, with the number of jobs topping out at about 58,000. As the overall economy recovers, Indiana economic indicators will likely continue to lead those of Madison County in 2015.