Muncie Forecast 2020

Dagney Faulk, Ph.D.

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

Sean Weiss

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

The data available from various government sources suggest that the local labor market in the Muncie Metropolitan Statistical Area (MSA)—which consists of Delaware County—is still recovering from the Great Recession and the structural changes in the economy related to dramatic decreases in manufacturing employment over the past several decades. The unemployment rate decreased, nonfarm employment decreased and average weekly wages increased. The average amount of food stamps issued increased—even as the average number of recipients decreased. The number of residential building permits issued increased, as did sales of existing houses.

Some of the highlights from 2019’s business news include the closing of more than 10 stores in the Muncie Mall during 2019—in addition to the two anchor stores that closed during 2018—leaving a high vacancy rate.¹ AquaBounty Technologies received FDA approval to raise genetically engineered salmon in Albany and began hatching fish.² Accutech Systems, a software company for the trust and investment industry, announced that it was renovating a vacant former department store downtown to serve as its headquarters.³ In early 2019, Waelz Sustainable Products announced plans to purchase the long-vacant BorgWarner property with plans to build a steel-dust recycling facility. By August, the project was withdrawn due to public outcry over lead and other emissions associated with similar facilities in other parts of the country.⁴

A couple of events that began in previous years and will affect economic development prospects and the ability of Muncie to attract new households to live in the area are still in process. During July 2019, media reported additional arrests related to the ongoing FBI investigation into alleged corruption in Muncie local government. The district administrator of the Muncie Sanitary district and a local businessman were indicted.⁵ The investigation continues. After enduring several years of financial crisis and a state takeover followed by the 2018 appointment of a new board of trustees by Ball State University, Muncie Community Schools seems to be stabilizing with fewer student transfers out of the district and lower teacher turnover.

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 the Muncie metro decreased from 4.3 percent in August 2018 to 3.9 percent in August 2019 (see Table 1). The unemployment rate in the Muncie metro is consistently higher than Indiana’s rate and the national unemployment rate. In August, the unemployment rate for Indiana was 3.2 percent, while the U.S. unemployment rate was 3.3 percent (not seasonally adjusted). A look at the time series suggests that Delaware County’s labor force is decreasing. At the turn of the century, the labor force was consistently around 60,000 people; in recent years, it is consistently below 55,000. This is consistent with the overall population declines in the county, as well as the aging of the population.

Employment by industry is measured using the January to August average for each year. Nonfarm employment decreased in 2019 for the second year in a row and is still about 2,000 jobs lower than pre-recession levels. Table 2 shows that five industries saw decreases in employment, with the largest being state government (including public schools and hospitals) losing 413 jobs (-5.1 percent). Of the industries with employment increases, leisure and hospitality had the most job gains (275 job, 5.3 percent) followed by private educational and health services (263 jobs, 2.9 percent). Manufacturing employment increased by 38 jobs to 4,225—about 1,300 jobs below manufacturing’s pre-recession level.

Table 2: Year-to-date Muncie MSA employment

Industry	2015	2016	2017	2018	2019	Change since 2018	Percent change, 2018-2019
Total nonfarm	50,525	50,925	51,025	50,300	50,213	-88	-0.2%
Total private	37,725	38,400	38,638	38,288	38,563	275	0.7%
Goods-producing	5,763	5,813	5,788	5,825	5,863	38	0.6%
Manufacturing	4,300	4,300	4,300	4,188	4,225	38	0.9%
Private service-providing	31,963	32,513	32,850	32,463	32,700	238	0.7%
Trade, transportation and utilities	8,925	8,975	8,863	8,713	8,650	-63	-0.7%
Information	300	300	300	300	300	0	0.0%
Financial activities	2,438	2,500	2,463	2,288	2,238	-50	-2.2%
Private educational and health services	8,200	8,538	8,888	9,125	9,388	263	2.9%
Leisure and hospitality	5,075	5,425	5,250	5,225	5,500	275	5.3%
Other services	1,875	1,800	1,800	1,825	1,863	38	2.1%
Private service-producing—residual	5,150	4,975	5,288	4,988	4,763	-225	-4.5%
State government (includes public schools and hospitals)	8,850	8,500	8,425	8,138	7,725	-413	-5.1%

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

The Muncie MSA saw an increase in first quarter average weekly wages for the third year in a row. As seen in Table 3, the total average weekly wage increased from $763 in first quarter 2018 to $792 in first quarter 2019 (3.8 percent). This total is still lower than Indiana’s average weekly wages of $964 for 2019. In the Muncie MSA, professional, scientific and technical services saw the biggest increase in average weekly wages (11.0 percent), while arts, entertainment and recreation saw the biggest decrease in average weekly wages (-13.7 percent). Twelve of the 18 industries experienced an increase in average weekly wages, while six experienced a decrease in average wages.

The inflation rate from the first quarter of 2018 to that of 2019 was 1.2 percent, so workers in nine of the 18 sectors experienced real wage growth over this period.⁶

Table 3: Average weekly wages in Muncie MSA

Industry	2018 Q1	2019 Q1	Change, 2018-2019	Percent change, 2018-2019
Total	$763	$792	$29	3.8%
Management of companies and enterprises	$2,233	$2,456	$223	10.0%
Utilities	$1,985	$2,116	$131	6.6%
Finance and insurance	$1,094	$1,198	$104	9.5%
Wholesale trade	$1,133	$1,170	$37	3.3%
Professional, scientific and technical services	$945	$1,049	$104	11.0%
Manufacturing	$982	$1,040	$58	5.9%
Educational services	$895	$973	$78	8.7%
Transportation and warehousing	$881	$866	-$15	-1.7%
Health care and social services	$819	$858	$39	4.8%
Information	$859	$843	-$16	-1.9%
Construction	$818	$796	-$22	-2.7%
Public administration	$761	$784	$23	3.0%
Real estate and rental and leasing	$751	$756	$5	0.7%
Administrative, support, waste management and remediation	$674	$678	$4	0.6%
Retail trade	$507	$502	-$5	-1.0%
Other services (except public administration)	$499	$486	-$13	-2.6%
Arts, entertainment and recreation	$342	$295	-$47	-13.7%
Accommodation and food services	$271	$276	$5	1.8%

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

Housing

During 2019, the number of building permits issued in the Muncie MSA more than doubled from the previous year to 21.  For the second year in a row, there were no permits issued for multifamily housing.  The number of building permits is still substantially lower than pre-recession levels (see Table 4).

Table 4: Muncie MSA year-to-date residential building permits

Year	Total	Single-family	Multifamily
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	69	25	44
2015	3	3	0
2016	25	15	10
2017	10	6	4
2018	10	10	0
2019	21	21	0

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

In Delaware County, residential units listed and sold through the multiple listing service (MLS) increased to a 13-year high of 1,075 (see Table 5). This was an 8 percent increase from 2018 residential units sold. Since 2013, there has been a downward trend in the average days on the market. In 2019, this measure decreased from 75 days in 2018 to 67 days in 2019. The average sale price for 2019 decreased to $112,045 from the spike in average sale price experienced in 2018. The median sale price continued to increase, reaching $91,000.

Table 5: Year-to-date residential real estate sales in Delaware County

	2015	2016	2017	2018	2019
Units sold	882	910	904	998	1,075
Average days on market	84	75*	59	75	67
Average sale price	$106,225	$103,090*	$106,416	$120,328	$112,045
Median sale price	$88,000	$87,900*	$90,275	$90,000	$91,000

*These 2016 statistics are calculated for January through June 2016. All other statistics are calculated for January through September.
Source: Mid-Eastern Indiana Association of Realtors (MEIAR)

The Federal Housing Finance Agency’s housing price index for the Muncie MSA has increased in fits and starts for the past decade and reached its highest level yet during 2019 (see Figure 1), providing additional evidence of upward pressure on single-family house prices.

Figure 1: Muncie MSA quarterly single-family housing price index (HPI)

Source: Federal Housing Finance Agency house price index (all transactions)

Social safety net

Delaware County saw a 4.5 percent increase in total food stamps issued from 2018 to 2019. This is the first increase since 2013 (see Table 6). Although there was an increase in the total food stamps issued, the number of households receiving food stamps and number of food stamp recipients both decreased in 2019. Delaware County households saw a decrease of 3.1 percent and individuals saw a decrease of 4.3 percent. This is the lowest point for both households and individuals since 2008.

Table 6: Food stamp recipients in Delaware County

Year	Total food stamps issued (monthly average)	Number of food stamp recipients (monthly average)	Number of households receiving food stamps (monthly average)
2003	$954,391	5,113	11,291
2004	$1,097,173	5,807	12,572
2005	$1,404,316	6,497	14,083
2006	$1,344,049	6,632	14,108
2007	$1,411,099	6,837	14,351
2008	$1,404,418	6,154	13,004
2009	$1,909,044	6,662	14,323
2010	$2,282,955	7,739	16,787
2011	$2,513,198	8,787	18,653
2012	$2,661,710	9,549	19,823
2013	$2,740,579	9,941	20,455
2014	$2,456,028	9,688	19,785
2015	$2,367,914	9,241	18,610
2016	$1,962,180	7,786	16,138
2017	$1,767,532	6,977	14,561
2018	$1,637,472	6,566	13,656
2019	$1,711,975	6,360	13,075

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

Data from the past year provided evidence that Muncie is continuing its long, slow recovery. The labor force and unemployment rate showed some variation over the year as more people entered the labor force looking for jobs, but in the latest reported data, both indicators decreased. Nonfarm employment had a small decrease and is still lower than pre-recession levels. Housing construction (measured by the number of building permits issued) picked up, and residential housing prices increased relative to the previous year. Wages continue to increase, and fewer households are relying on food stamps.

The Indiana University Center for Econometric Model Research’s forecast shows flat employment growth in the Muncie MSA for 2020, while income is projected to grow at 3.8 percent during 2020.⁷ Population growth projections remain flat.

Notes

1. A. J. Kirby, “’Domino effect’: Muncie Mall’s fate more questionable after continued store closings,” The Star Press, April 11, 2019.
2. S. Slabaugh, “Albany farm OK’d to grow genetically engineered salmon,” The Star Press, March 8, 2019; S. Slabaugh, “Genetically engineered fish hatched in Albany,” The Star Press, June 30, 2019.
3. C. Ohlenkamp, “Accutech Systems investing $5.5 million in downtown Muncie,” The Star Press, April 5, 2019.
4. S. Slabaugh, “Waelz Sustainable Products project is called off; company officials blame ‘campaign of misinformation,’” Star Press, August 20, 2019.
5. D. Walker, “Sanitary district indictment details bid-rigging allegations,” The Star Press, July 16, 2019.
6. Inflation rate for Midwest region using the CPI for all urban consumers, not seasonally adjusted.
7. Forecasts come from the Indiana University Center for Econometric Model Research (https://ibrc.kelley.iu.edu/analysis/cemr/), September 2019.

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