99 years of economic insights for Indiana

The IBR is a publication of the Indiana Business Research Center at IU's Kelley School of Business.

Executive Editor, Carol O. Rogers
Managing Editor, Brittany L. Hotchkiss

Anderson Forecast 2013

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

Associate Professor of Entrepreneurship, Fall School of Business, Anderson University

Thus far, the available data for 2012 show a mixed picture for the Anderson Metropolitan Statistical Area (MSA). The unemployment rate in the Anderson MSA (Madison County) decreased by more than a percentage point during 2012, but still remains above the state’s rate. While the labor force decreased, the number of jobs in the MSA increased but still continues to be substantially lower than at the beginning of the recession. There have been nine announcements so far this year of employers planning to come to the area, totaling 1,067 potential jobs. Hoosier Park Casino is facing increased competition as Ohio casinos open for business. Average weekly wages increased in most industry sectors but still lag the state. The housing market appears to have stabilized and the sales of existing homes have increased as has the average home price. Unfortunately, more people are receiving food stamps and city schools continue to lose students.

This article includes the most current data available at the time of writing on various measures of economic activity from public sources for the Anderson MSA. The goal is to analyze changes over the past year. A summary of the labor market forecast for the Anderson area is included in the conclusion.

Labor Markets

In Madison County, the unemployment rate has decreased over the past year (see Table 1). The preliminary unemployment rate for September 2012 is 9.0 percent, down from 10.1 percent a year earlier. The unemployment rate is consistently higher than the state unemployment rate (7.5 percent, not seasonally adjusted). The number of unemployed workers in Madison County has decreased by more than 1,100 over the course of the year, and the labor force has decreased by about 700 workers leading to the decreasing unemployment rate and suggesting that frustrated job seekers are continuing to drop out of the labor market or migrate out of the area (or both). Additionally, almost 11 percent of those working within the county live elsewhere and travel here only for employment.

Table 1: Labor Force and Unemployment for Madison County, September 2011 to September 2012

Year Month Labor Force Unemployed Unemployment Rate
2011 September 61,534 6,202 10.1%
October 61,519 6,131 10.0%
November 61,058 6,178 10.1%
December 60,683 6,103 10.1%
Annual 61,156 6,432 10.5%
2012 January 60,682 6,550 10.8%
February 60,838 6,303 10.4%
March 61,018 6,120 10.0%
April 60,479 5,393 8.9%
May 60,780 5,536 9.1%
June 60,478 5,889 9.7%
July 59,894 5,893 9.8%
August 60,193 5,708 9.5%
September* 59,967 5,424 9.0%

*September 2012 data are preliminary.
Note: Data are not seasonally adjusted.
Source: Bureau of Labor Statistics

A look at the Current Employment Statistics shows variation in employment gains and losses in 2012. Total nonfarm jobs in Madison County averaged 39,890 for the first three quarters of 2012. This is the first increase in nonfarm employment since the recession, yet still represents a decrease of about 1,400 jobs since the beginning of the recession. Professional and business services was the sector with the largest job growth (adding more than 200 jobs). The sector with the largest job losses was trade, transportation and utilities (see Table 2).

Table 2: Anderson Metro Employment by Industry, Year-to-Date 2011 to 2012

Industry 2012 Change since 2011 Percent Change 2011–2012
Total Nonfarm 39,889 89 0.2%
  Total Private 33,800 133 0.4%
  Goods-Producing 5,011 89 1.8%
    Manufacturing 3,722 44 1.2%
  Private Service-Providing 28,789 44 0.2%
    Trade, Transportation and Utilities 8,200 -100 -1.2%
    Information 500 -67 -11.8%
    Financial Activities 1,589 -11 -0.7%
    Professional and Business Services 3,544 233 7.0%
    Private Educational and Health Services 7,900 22 0.3%
    Leisure and Hospitality 5,422 33 0.6%
    Other Services 1,633 -67 -3.9%
  Government 6,089 -44 -0.7%

Note: Year-to-date reflects January to September for each year. September 2012 data are preliminary.
Source: Bureau of Labor Statistics and Indiana Department of Workforce Development

This marks the second year of net increases in manufacturing employment since 2009, but these are small increases relative to the thousands of manufacturing jobs lost over the past four decades. The Anderson MSA began the millennium with 10,500 manufacturing jobs and currently has around 3,800 (as of September 2012). The peak for manufacturing employment was around 30,000 jobs in the early 1970s.

Average wages increased to $660 per week during the first quarter of 2012 (the most recent data available) and continue to be lower than the state average of $821 for the same period. Table 3 shows average weekly wages (not adjusted for inflation) for the first quarters of 2011 and 2012. Most sectors experienced increases in wages. The sectors with the strongest wage growth were arts, entertainment and recreation (22.3 percent), finance and insurance (12.8 percent), and professional, scientific, and technical services (12.5 percent). Sectors that experienced declines in wages include construction and information. The inflation rate between the first quarter of 2011 and 2012 was 2.8 percent, so workers in most sectors experienced real wage growth over this period.1

Table 3: Average Weekly Wages in the Anderson MSA, 2011 Q1 to 2012 Q1

Industry 2011 Q1 2012 Q1 Percent Change
Total $635 $662 4.3%
Arts, Entertainment, and Recreation $422 $516 22.3%
Finance and Insurance $798 $900 12.8%
Professional, Scientific, and Technical Services $608 $684 12.5%
Accommodation and Food Services $213 $239 12.2%
Public Administration $717 $792 10.5%
Administrative and Support and Waste Management and Remediation Services $408 $447 9.6%
Manufacturing $1,057 $1,148 8.6%
Wholesale Trade $804 $856 6.5%
Transportation and Warehousing $722 $768 6.4%
Educational Services $622 $649 4.3%
Other Services (Except Public Administration) $373 $389 4.3%
Retail Trade $401 $414 3.2%
Real Estate and Rental and Leasing $467 $474 1.5%
Health Care and Social Services $678 $686 1.2%
Agriculture, Forestry, Fishing and Hunting $615 $615 0.0%
Construction $767 $757 -1.3%
Information $673 $657 -2.4%

Note: The authors feel the reported average weekly wages for management of companies and enterprises is inaccurate and therefore excluded it from this table.
Source: Bureau of Labor Statistics and Indiana Department of Workforce Development


The housing market showed signs of stabilizing in Madison County. Residential construction as measured by new single-and multi-family housing units was similar to 2011 but still substantially lower than the number of permits issued in the mid-2000s (see Table 4). Sales of existing homes increased to more than 950 units (a 21 percent increase). The average price of homes sold also increased to more than $86,500—a 4.5 percent nominal increase relative to the same period last year (see Table 5).

Table 4: Madison County Residential Building Permits, Year-to-Date 2001 to 2012

Year Total Single-Family Multi-Family
2001 265 257 8
2002 335 231 104
2003 444 364 80
2004 297 291 6
2005 368 326 42
2006 210 191 19
2007 146 144 2
2008 68 52 16
2009 38 36 2
2010 48 44 4
2011 39 37 2
2012 40 38 2

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

Table 5: Madison County Residential Real Estate Sales, Year-to-Date 2004 to 2012

Year Closed Sales Average Sale Price
2004 1,244 $89,586
2005 1,221 $92,021
2006 1,294 $84,539
2007 1,161 $80,251
2008 1,038 $78,093
2009 937 $73,295
2010 812 $76,696
2011 786 $82,804
2012 955 $86,521

Note: Year-to-date reflects January to September for all years.
Source: Metro Indianapolis Board of Realtors

Social Safety Net

Changes in the number of food stamp recipients and the dollar amount of food stamp payments are one indicator of economic distress in a community. The number of food stamp recipients and the corresponding amount of food stamps issued continued to increase during 2012 in Madison County but at a slower rate than the previous year (see Table 6). The average number of monthly food stamp recipients increased 4.4 percent to more than 22,000 individuals (about 17 percent of the population in the county) during the January to October time period. The dollar amount distributed in food stamps increased by more than 4 percent to exceed $2.9 million. This increase reflects the state of the economy in east-central Indiana during the slow recovery from the recession.

Table 6: Food Stamp Recipients in Madison County, January to October Averages, 2004 to 2012

Year Average Monthly Food Stamps Issued Average Monthly Food Stamp Recipients
2004 $1,173,429 13,389
2005 $1,376,317 14,524
2006 $1,457,203 15,388
2007 $1,546,086 15,812
2008 $1,574,533 14,879
2009 $2,085,753 15,832
2010 $2,506,633 18,796
2011 $2,838,637 21,411
2012 $2,954,793 22,354

Note: Dollar amounts are not adjusted for inflation.
Source: STATS Indiana, using FSSA data


The city schools have been losing students for a number of years and the trend shows little sign of reversing. A significant portion of that loss in students is attributable to families responding to the weak performance of the city’s schools by using the tuition transfers to send their children elsewhere. As better-performing students leave the schools, it creates a spiral in which those very schools continue to suffer and perform poorly, in part because of the aptitudes of students they are left with. After graduation, more than 57 percent of high school graduates go on to a four-year school, yet only 16.6 percent of area residents have a four-year degree. Clearly, this is symptomatic of a brain drain in which educated residents are leaving the community.


May 2012 marked the fourth full year of operation at Hoosier Park Casino. After declining between 2009 and 2010, the winnings generated at Hoosier Park increased over the past couple of years. Winnings increased 2.6 percent to $222.5 million and $55.3 million in wagering tax revenues generated from these winnings (see Table 7). As in the previous year, for fiscal year 2012 Hoosier Park ranked sixth of the 13 Indiana casinos in terms of total winnings. In November 2009, Ohio voters approved a ballot initiative to allow casinos in Cincinnati, Cleveland, Columbus and Toledo. The new casinos opened in Cleveland, Toledo and Columbus earlier this year along with a “racino” in Columbus. A casino is scheduled to open in Cincinnati during the spring of 2013. These casinos are likely to draw patrons from Indiana casinos and negatively affect wagering tax revenue.

Table 7: Hoosier Park Casino Win and Wagering Tax Totals, FY 2008 to FY 2012

Year Win Percent Change Wagering Tax Percent Change
2008 $15,873,432 n/a $3,980,053 n/a
2009 $202,201,775 1,173.8% $55,808,319 1,302.2%
2010 $201,116,846 -0.5% $55,426,052 -0.7%
2011 $216,866,917 7.8% $60,901,674 9.9%
2012 $222,463,973 2.6% $55,333,226 -9.1%

Source: Indiana Gaming Commission

Business Incubation

A large portion of the Flagship Enterprise Center’s 193,200 square feet was occupied by Bright Automotive, a hybrid-vehicle firm founded in 2008. In February 2012, the company—which had plans to build a manufacturing site and produce 50,000 vehicles a year with up to 1,000 workers—folded.


Extrapolating on the numbers and trends presented, the following outlook focuses on the three key areas of employment, education and housing.


Unemployment will continue to be a drain on the local economy for several years. There is a considerable lag and disparity between job announcements and actual payrolls. Manufacturing—one area that showed promise in the state last year and early this year—has sputtered and stalled once more. In Madison County, 72.4 percent of all firms employ less than 10 employees (86.6 percent have less than 20), so it is imperative that entrepreneurship and small business ownership be nurtured; however, Indiana received a “C” and “D” in a recent Kauffman Thumbtack Small Business Survey in the categories of promoting training and networking programs, respectively. The Indianapolis region (the survey did not hone in on smaller cities) was ranked “C” and “F” in those two areas. Replicating the study, Grant County—our neighbor to the north—found that only 18.3 percent of area business owners identified the economy as the biggest challenge to starting a business, while 30 percent said it was support. This is an area where Anderson could shine and differentiate itself from its neighbors, but it would take a coordinated effort on the part of all the parties that business owners must deal with.


A properly educated workforce is necessary to attract high value-added jobs. There is much work to do in this area, but it is encouraging to see the work being done by the Madison County Education Coalition. With a strategic goal of developing a stronger linkage between economic development and education initiatives, this organization has accomplished much in a short period of time. One solution to the brain drain that others in the area (particularly the Grant County Economic Growth Council)are using is “forgivable loans” that reduce the amount of money graduates must pay back if they stay within the area.


It cannot be disputed that we have bottomed out in construction—the number of permits being issued in Madison County has stabilized but is still low compared to pre-recession numbers. The bad news is that the lack of new construction does not mean that the number of existing homes could not still represent a surplus—a condition leading to declining values—if the number of homes desired in the county lessens.

The official numbers show some small improvements over the economic situation in Anderson last year in some areas. In the coming year, we expect employment growth to be flat and small gains in income (in the 2 percent range) as the economy continues its slow recovery.2