Anderson Forecast 2014
Associate Professor of Entrepreneurship, Fall School of Business, Anderson University
The economy in 2013 has been a mixed picture for Anderson. While the unemployment rate in Madison County decreased by more than 1 percentage point since 2012, it remains approximately 15 percent above the state’s rate. The labor force increased, but remains below levels of three years ago. The Flagship Enterprise Center (business incubator) has assumed more of a landlord role, and the housing market appears to be on the uptick with the number of building permits issued rebounding from a record low in 2012. Unfortunately, more people are receiving food stamps and the county continues to suffer in several areas.
This article includes the most current data available on various measures of economic activity from public sources for the Anderson metropolitan area (Madison County). The goal is to analyze changes over the past year and provide a market forecast summary for the Anderson area, which appears in the conclusion of this article.
The unemployment rate decreased from 2012 to 2013 in Madison County (see Table 1). The preliminary unemployment rate for August 2013 is 8.6 percent, down from 9.8 percent a year earlier. The unemployment rate is consistently running 15 percent higher than the state unemployment rate (7.5 percent, not seasonally adjusted). The number of unemployed workers in Madison County decreased by more than 300 workers over the course of the year while the labor force increased by about 800 workers. The decreasing unemployment and increasing labor force have led to a lower unemployment rate and suggest that previously frustrated job seekers are returning to the labor market.
Table 1: Madison County Labor Force and Unemployment, September 2012 to August 2013
|Year||Period||Labor Force||Unemployment||Unemployment Rate|
Note: Data are not seasonally adjusted.
Source: Bureau of Labor Statistics
Though the population of the area has not changed much over the past 20 years, the demographics of those living in the area have changed. One manifestation of this in recent years is the decrease in the number of residents filing tax returns and the value of those returns (see Table 2). In 2011, the most recent year for which data is available, the total number of returns filed is 8 percent below that of 2007; there are 63 percent fewer declaring over $1 million and 12 percent fewer declaring between $30,001 and $250,000. Most noticeable is that the total income value of all returns is 11 percent lower than it was in 2007 and it has consistently declined each year.
Table 2: IT-40 Tax Returns for Residents of Madison County, 2004 to 2011
|Year||Total Number of Returns Filed||Number of Returns over $1 Million||Number of Returns from $30,001 to $250,000||Total Value of All Returns|
Note: The total value of all returns equals Federal adjusted gross income. Source: STATS Indiana using Indiana Department of Revenue data
The housing market shows signs of rebounding in Madison County. Residential construction as measured by single family building permits was similar to 2011 levels after bottoming out in 2012 (see Table 3). Comparing January through September, there was an 89 percent increase in the number of permits issued in 2013 compared to 2012. The Builders Association of Greater Indianapolis estimates the 66 permits issued in 2013 have created a total economic impact of $11,819,531 in local income, $2,683,229 in local taxes, and 200 local jobs.
Table 3: Madison County Single Family Building Permits, 2000 to 2013
* January through September totals
Note: Incorporated data include the following areas: Alexandria, Anderson, Elwood, Frankton, Ingalls, Lapel, Pendleton and Summitville
Source: Builders Association of Greater Indianapolis
According to the Metropolitan Indianapolis Board of Realtors, the number of new listings for existing homes decreased slightly in August 2013 to its lowest level in five years (compared to August of previous years). Closed sales are up 10.6 percent, but the median sales price is down. However, the average sales price is the same as it was one year ago and the percent of asking price obtained has increased to its highest level in four years to 88.9 percent (see Table 4).
Table 4: Madison County Residential Real Estate Sales for August, 2009 to 2013
|Year||Average Sales Price||Percent of Original List Price Received at Sale||Single-Family Detached Inventory|
Note: All comparisons are for the month of August for each year.
Source: Metropolitan 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 2013 in Madison County (see Table 5).
Table 5: Madison County Food Stamp Recipients, January to August, 2004 to 2013
|Year||Average Monthly Food Stamps Issued||Average Monthly Food Stamp Recipients|
Notes: Each year is based on January through August monthly averages. Dollar amounts are not adjusted for inflation.
Source: STATS Indiana, using FSSA data
The number of food stamp recipients increased to more than 23,000 individuals (about 17.5 percent of the population in the county, or 19 percent of households) during the January to August time period. The amount of money distributed in food stamps increased by almost 3 percent to more than $3 million monthly. This increase reflects the state of the economy in east central Indiana during the slow recovery from the recession.
Though the county is the 13th largest in the state in terms of population, according to the Indiana State Department of Health, it is 8th in number of suicides. According to the U.S. Census Bureau’s 2011 numbers, the most recent data available, the poverty rate for Madison County is 18.9 percent, higher than every neighboring county with the exception of Delaware, and above the national average of 15 percent.
With a public school enrollment of nearly 19,000, the county constitutes 1.8 percent of all students in Indiana public schools, but 3.7 percent of all high school dropouts in the state. These numbers have decreased from past years as a result of the Excel Academy and newcomer The Crossing. Working in conjunction with each other, these entities are slowing the spiral in which the schools suffered and performed poorly in previous years. Of the students enrolled in public schools in Madison County, more than half are on free or reduced lunches.
The Outlook for 2014
While the official numbers show some areas of improvement over the economic situation in Anderson from last year, it is too early to be considered in the clear. In the coming year, it is expected that employment growth will be flat and there will be only modest gains in income (in the 1 percent to 2 percent range) as the economy continues to improve.