Muncie Forecast 2015

Dagney Faulk, Ph.D.

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

Kurt Waldier

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

Indicator	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