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

Anderson forecast 2017

Dean, Falls School of Business, Anderson University

Overview

A new trend: Historical, negative economic tendencies over the last few decades have given way to a new trend for Madison County and the greater Anderson community. In place of persistent unemployment and a long-term decline in the number of jobs, the economic outlook for Madison County has improved.

Employment and job creation

Positive trend in unemployment rate: The unemployment rate for Madison County has fallen to less than a third of what it was in 2010. As illustrated in Table 1, the unemployment rate declined from a high of 12.1 percent in 2010 down to 4.6 percent as of September 2016.

Table 1: Annual average employment and unemployment rates

Year Madison County Indiana
Employment Unemployment rate Employment Unemployment rate
2010 52,228 12.1% 2,845,608 10.4%
2011 52,415 10.9% 2,892,327 9.1%
2012 52,213 10.0% 2,906,201 8.3%
2013 52,708 9.3% 2,947,114 7.7%
2014 54,498 7.1% 3,035,581 5.9%
2015 55,445 5.6% 3,109,217 4.8%
2016* 57,884 4.6% 3,221,019 4.2%

* 2016 data are as of September.
Note: Data are not seasonally adjusted.
Source: U.S. Bureau of Labor Statistics

Recent improvements: The positive employment trend continued over the last 12 months. The unemployment rate for Madison County decreased from 4.8 in October 2015 to 4.6 as of September 2016 (see Table 2).

Table 2: Monthly employment and unemployment rates

Date Madison County Indiana
Employment Unemployment rate Employment Unemployment rate
October 2015 55,939 4.8% 3,144,165 4.3%
November 2015 55,989 5.1% 3,138,963 4.5%
December 2015 55,924 5.1% 3,125,715 4.5%
January 2016 56,031 6.0% 3,129,810 5.1%
February 2016 55,941 6.5% 3,130,100 5.4%
March 2016 55,996 6.5% 3,138,757 5.5%
April 2016 55,959 5.5% 3,188,345 4.8%
May 2016 57,630 4.9% 3,222,341 4.3%
June 2016 58,271 5.1% 3,248,079 4.6%
July 2016 58,960 4.7% 3,268,552 4.4%
August 2016 58,327 4.9% 3,232,052 4.6%
September 2016 57,884 4.6% 3,221,019 4.2%

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

2016 shows a significant increase in jobs: After long periods of stagnate and declining employment, the number of employed in Madison County showed healthy increases over the last few years. The number of employed individuals increased from 52,708 in 2013 to 57,884 in 2016. This represents an annual increase of 3.4 percent from 2013 to 2014, of 1.7 percent from 2014 to 2015, and of 4.4 percent from 2015 to 2016.

Jobs recovery ahead of Indiana for 2016: The improvement in employment numbers for Madison County surpassed Indiana’s gains over the year from October 2015 to September 2016. As noted in Table 2, employment increased from 55,939 to 57,884 for Madison County and increased from 3,144,165 to 3,221,019 for the state of Indiana. Madison County improved the number of jobs by 3.5 percent over the 12-month period, while Indiana improved by 2.4 percent.

Closing the Gap

Unemployment rate: Over the last several years, Madison County has been closing the gap between the local unemployment rate and the state rate. For decades, the Madison County unemployment rate has trailed the state unemployment rate, but that gap has shown significant signs of closing since 2010 (see Figure 1).

Figure 1: Comparing Indiana and Madison County annual unemployment rates

graph

Note: Data are not seasonally adjusted. 2016 data are as of September.
Source: U.S. Bureau of Labor Statistics

Fewer People: The increase in the number of employed in Madison County was achieved in the challenging face of a falling population base. As illustrated in Figure 2, Madison County and Indiana employment increased, along with Indiana’s population; however, the population of Madison County declined over that same period. Since 2010, the number of employed in Madison County increased by 10.8 percent, while the population fell by almost 2 percent.

Figure 2: Employment and Population Comparison

graph

Source: U.S. Census Bureau and U.S. Bureau of Labor Statistics

Outlook for 2017

The employment picture for Madison County is expected to continue its positive trend in 2017, but at a much slower pace. We can expect only a slight decline in the unemployment rate and a moderate increase in employment.

The unemployment rate for Madison County is projected to hold fairly steady, perhaps falling between 0.2 and 0.5 percentage points in 2017. While the improving economy will likely draw a number of previously frustrated unemployed individuals back into the labor force, another drop in the unemployment rate in Madison is expected. The best estimate is an unemployment rate of about 4.9 percent for 2017.

The number of employed in Madison County is expected to have a modest increase of about 1.0 percent in 2017, with the number of jobs expected to hit just over 58,000. For the first time in several years, the Indiana economy could fare better in 2017 than the rest of the United States. Most likely, Madison County will still lag behind the Indiana economy; however, it is expected that Madison County will continue to narrow the gap between Indiana in the unemployment rate and in job creation in 2017.