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Muncie Forecast 2015

Director of Research, Center for Business and Economic Research, Ball State University

Graduate Assistant, Center for Business and Economic Research, Ball State University

The official numbers show improvements in the Muncie Metropolitan Statistical Area (MSA) economy during 2014. The unemployment rate is down. Nonfarm employment has increased, as have average weekly wages. The job gains of the past year were better than expected. In contrast, the housing market—particularly residential real estate sales—has slowed, and local real estate agents indicate that low inventory and lack of new construction has dampened buyer enthusiasm.

Media reports have noted several closings of long-established businesses. Marsh is closing two Muncie stores. Muncie’s last Kmart is scheduled to close in early December (59 employees). In July, Jardin Home Brands announced that it was moving its headquarters from Daleville to Fishers and taking 100 employees with it. In August, DIY Group announced that it is laying off 261 workers—about half its workforce. Chase Bank announced that it is closing two locations, but opening a branch on McGalliard Avenue.1

Meanwhile, several openings and expansions have been reported. Bell Aquaculture, a fish farm, is expanding its operation in Albany. Construction has begun on a downtown hotel (Courtyard by Marriott) near the convention center and will include a restaurant and an adjacent city parking garage and be a training facility for people with disabilities. Dick’s Sporting Goods and Michael’s Arts and Crafts opened stores during the fall. Officials in Anderson, Muncie and New Castle announced the creation of a regional planning effort called the Manufacturing Triangle to focus on attracting manufacturing jobs to the region.2

In the housing sector, several multi-family developments have opened or are under construction. Lofts at the Roberts opened downtown during the spring. Construction began on Walnut Commons, a housing project targeted at the homeless population and built using low-income housing tax credits, is under construction near downtown. The Village Promenade, which includes 200 apartment units, retail space and a city-owned parking garage near Ball State University opened.3

This article includes the most current data available on various measures of economic activity from public sources for the Muncie MSA (Delaware County) to analyze changes over the past year. A summary of the labor market forecast for the Muncie area is included in the conclusion.

Labor Markets

The unemployment rate for September 2014 improved from January 2014, decreasing from 7.3 percent to 5.9 percent. This is significantly lower than one year ago when the unemployment rate was 7.9 percent (September 2013). However, Delaware County’s unemployment rate is still higher than Indiana’s 5.1 percent rate (not seasonally adjusted) in September 2014.

The number of unemployed workers in the Muncie MSA decreased by about 670 people (down 17 percent), while the labor force increased by almost 2,000 people (up 3.7 percent) during 2014 (see Table 1).

Table 1: Labor Force and Unemployment in Delaware County

Year Month Labor Force Unemployment Unemployment Rate
2013
September 51,985 4,131 7.9
October 53,719 4,121 7.7
November 54,627 4,118 7.5
December 54,079 3,786 7.0
Annual 53,023 4,603 8.7
2014 January 53,731 3,935 7.3
February 54,286 4,233 7.8
March 54,219 3,852 7.1
April 54,329 3,413 6.3
May 53,375 3,673 6.9
June 54,176 4,107 7.6
July 54,362 4,070 7.5
August 53,931 3,408 6.3
September 55,726 3,265 5.9

Note: Data are not seasonally adjusted.
Source: U.S. Bureau of Labor Statistics

Nonfarm employment in Delaware County increased in 2014 with nearly 1,700 more jobs (3.4 percent) since 2013 (see Table 2). This is the highest number of nonfarm jobs since 2008 but still about 2,000 jobs short of the pre-recession level of employment.

Table 2: Year-to-Date Muncie MSA Employment

Industry 2007 2008 2009 2010 2011 2012 2013 2014 Change since 2013 Percent Change 2013-2014
Total Nonfarm 52,725 52,050 49,463 48,325 48,675 50,113 49,013 50,700 1,688 3.4%
Total Private 40,475 39,775 37,550 36,213 36,488 37,300 37,288 37,600 313 0.8%
Goods-Producing 7,725 6,938 5,688 5,063 5,175 5,613 5,600 5,463 -138 -2.5%
Manufacturing 5,525 5,050 4,100 3,638 3,650 4,113 4,188 4,050 -138 -3.3%
Private Service-Providing 32,750 32,838 31,863 31,150 31,313 31,688 31,688 32,138 450 1.4%
Trade, Transportation and Utilities 8,913 8,563 8,188 8,163 8,438 8,888 8,738 8,850 113 1.3%
Information 500 400 400 363 325 313 300 300 0 0.0%
Financial Activities 2,263 2,800 2,638 2,638 2,650 2,500 2,488 2,488 0 0.0%
Private Educational and Health Services 9,638 9,738 9,875 9,688 9,450 9,213 8,750 8,375 -375 -4.3%
Leisure and Hospitality 5,200 5,088 5,000 4,738 4,775 4,900 4,950 5,163 213 4.3%
Other Services 1,800 1,750 1,700 1,638 1,663 1,738 1,788 1,800 13 0.7%
Government (Includes Public Schools and Hospitals) 12,250 12,275 11,913 12,113 12,188 12,813 11,725 13,100 1,375 11.7%

Note: All data are January through August averages.
Source: U.S. Bureau of Labor Statistics and Indiana Department of Workforce Development

Both private education and health services (-375 jobs) and manufacturing (-138 jobs) experienced job losses in 2014. Government (which includes public schools and hospitals) experienced the largest job gains, increasing by 1,375 jobs (11.7 percent). This job growth was in state government jobs. Local government employment actually decreased. Leisure and hospitality added 213 jobs (4.3 percent), and the trade, transportation and utilities sector added over 100 jobs.

Average weekly wages in Delaware County rose for the third straight year, increasing 3.4 percent from $682 to $705 (see Table 3). Also, this was the ninth straight year that first quarter average weekly wages either increased or remained constant.

Table 3: Average Weekly Wages in Muncie MSA

Industry 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 Change 2013-2014 Percent Change 2013-2014
Total $589 $607 $611 $611 $613 $661 $682 $705 $23 3.4%
Utilities 1,571 1,513 1,474 1,116 1,352 1,396 1,538 1,800 262 17.0%
Management of Companies and Enterprises 977 1,750 1,713 2,034 1,977 1,888 1,807 2,072 265 14.7%
Wholesale Trade 803 838 928 805 857 910 886 967 81 9.1%
Finance and Insurance 744 729 727 721 704 835 892 960 68 7.6%
Educational Services 697 719 736 729 722 811 798 852 54 6.8%
Administrative, Support, Waste Management and Remediation Services 300 409 436 416 406 438 440 456 16 3.6%
Professional, Scientific and Technical Services 692 748 728 719 704 766 812 841 29 3.6%
Other Services (Except Public Administration) 417 415 421 408 418 426 431 441 10 2.3%
Retail Trade 375 383 387 379 402 424 436 446 10 2.3%
Health Care and Social Services 609 600 627 618 636 700 762 776 14 1.8%
Information 619 648 582 619 642 715 755 768 13 1.7%
Construction 667 662 737 647 640 730 709 721 12 1.7%
Accommodation and Food Services 202 209 208 218 222 236 231 233 2 0.9%
Manufacturing 920 826 819 893 829 883 888 887 -1 -0.1%
Transportation and Warehousing 715 714 744 717 733 788 803 797 -6 -0.7%
Arts, Entertainment and Recreation 238 241 264 290 255 244 263 249 -14 -5.3%
Real Estate and Rental and Leasing 597 587 597 570 594 657 697 651 -46 -6.6%
Public Administration 649 643 652 712 728 728 731 665 -66 -9.0%

Source: U.S. Bureau of Labor Statistics and Indiana Department of Workforce Development

A majority of the industry sectors in 2014 (13 out of 18) experienced positive increases in weekly wages ranging from 0.9 percent to 17.0 percent. Five of these sectors had increases of 5 percent or more: utilities (17.0 percent), management of companies and enterprises (14.7 percent), wholesale trade (9.1 percent), finance and insurance (7.6 percent), and educational services (6.8 percent).

Five sectors saw a decline in average weekly wages in 2013: manufacturing; transportation and warehousing; real estate and rental and leasing; arts, entertainment and recreation; and public administration.

The inflation rate between the first quarters of 2013 and 2014 was 1.2 percent, so workers in over half of the sectors experienced real wage growth over this period.4

Housing

After declining 53 percent in 2013, the number of residential building permits continued to drop in 2014. Permits fell from 22 issued in 2013 to only 12 new permits in 2014—a 45 percent decline (see Table 4).

Table 4: Delaware County Year-to-Date Residential Building Permits

Year Total Single-Family Multi-Family
2002 164 156 8
2003 345 156 189
2004 200 154 46
2005 122 115 7
2006 94 79 15
2007 87 73 14
2008 47 43 4
2009 21 21 0
2010 25 23 2
2011 53 43 10
2012 47 42 5
2013 22 22 0
2014 12 12 0

Note: Each year is based on January through August totals.
Source: U.S. Census Bureau

There were mixed results in the residential real estate market in 2013. On the positive side, the average number of days on the market decreased from 144 in 2013 to 103 in 2014—the lowest amount since before 2005. Also, the average sale price increased by over $9,000 to $94,839—the greatest it has been since 2007. However, over 100 fewer units were sold in 2014 compared to 2013 (see Table 5).

Table 5: Year-to-Date Residential Real Estate Sales in Delaware County

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Units Sold  966  1,086  984  715  733 714 635 713 826 717
Average Days on Market  119  131  128  145  155 130 146 134 144 103
Average Sale Price $101,891 $98,230 $92,596 $91,632 $90,628 $85,084 $85,957 $92,213 $85,592 $94,839
Median Sale Price $80,650 $80,000 $79,900 $75,500 $76,750 $69,950 $72,900 $79,900 $72,905 $80,000
Average Property Tax/Average Sales Price 1.20% 1.18% 1.30% 1.71% 1.54% 1.47% 1.16% 1.28% 1.15% 1.58%

Note: Each year is based on January through September data.
Source: Jim Kouns with the Mid-Eastern Indiana Association of Realtors (MEIAR)

Social Safety Net

The dollar amount of food stamps issued decreased after five consecutive years of increase (see Table 6). Delaware County issued an average of $2.5 million per month in food stamps in 2014. This is an 8.5 percent decrease since 2013, and the least amount issued since 2010. The number of food stamp recipients and number of households receiving food stamps also decreased in 2014, but was still greater than 2012 numbers.

Table 6: Food Stamp Recipients in Delaware County

Year Food Stamps Issued in Average Month Food Stamp Recipients in Average Month Number of Households Receiving Food Stamps in Average Month
2005 $1,404,316 14,083 6,497
2006 $1,344,049 14,108 6,632
2007 $1,411,099 14,351 6,837
2008 $1,404,418 13,004 6,154
2009 $1,909,044 14,323 6,662
2010 $2,282,955 16,787 7,739
2011 $2,513,198 18,653 8,787
2012 $2,661,710 19,823 9,549
2013 $2,740,579 20,455 9,941
2014 $2,508,701 20,007 9,737

Note: Each year is based on January through September monthly averages. Dollar amounts are not adjusted for inflation.
Source: STATS Indiana, using Family and Social Services Administration data

Outlook

The past year actually showed higher employment gains than expected, although most of the job growth was in the government sector rather than the private sector. The coming year is likely to show employment growth in retail and leisure and hospitality. The increasing labor force indicates that discouraged workers are beginning to look for jobs. There were also decreases in the number of food stamp recipients and payments for the first time since the Great Recession.

In the coming year, we expect additional gains in employment (1.5 percent) and income (in the 2-3 percent range) as the local economy continues its recovery.5

Notes

  1. K. Roysdon, “Hometown Hit: Marsh Closing Two Muncie Stores,” The Star Press, January 10, 2014. K. Roysdon, “Jarden Move Takes 100 Jobs from Daleville to Fishers,” The Star Press, July 12, 2014. K. Roysdon, “Muncie’s Last Kmart to Close,” The Star Press, September 23, 2014. K. Roysdon, “Muncie Packager Laying Off Half Its Workforce,” The Star Press, August 16, 2014.
  2. “S. Slabaugh, “BZA OK’s Bell Aquaculture $30 Million Fish Farm Expansion in Albany by 4-3 Vote,” The Star Press, March 28, 2014. K. Roysdon, “New Hotel: Work Begins, Groundbreaking Set,” The Star Press, October 7, 2014. T. L. Moyer, “Anderson, Muncie and New Castle Uniting for the Future,” Herald Bulletin, October 11, 2014.
  3. S. Slabaugh, “$7 Million Downtown Muncie Apartment Project OK’d,” The Star Press, April 6, 2014. K. Roysdon, “Lofts at Roberts Ready to Open in Downtown Muncie,” The Star Press, April 8, 2014. K. Roysdon, “Huge Village Project Wants to Be ‘Good Neighbor’,” The Star Press, October 4, 2014.
  4. This is the inflation rate for the Midwest region using the CPI for all urban consumers.
  5. Forecast comes from the Indiana University Center for Econometric Model Research, as of August 2014.