Muncie Forecast 2015
Director of Research, Center for Business and Economic Research, Ball State University
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.
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|
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|
|Trade, Transportation and Utilities||8,913||8,563||8,188||8,163||8,438||8,888||8,738||8,850||113||1.3%|
|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%|
|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|
|Management of Companies and Enterprises||977||1,750||1,713||2,034||1,977||1,888||1,807||2,072||265||14.7%|
|Finance and Insurance||744||729||727||721||704||835||892||960||68||7.6%|
|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%|
|Health Care and Social Services||609||600||627||618||636||700||762||776||14||1.8%|
|Accommodation and Food Services||202||209||208||218||222||236||231||233||2||0.9%|
|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%|
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
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
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
|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|
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
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
- K. Roysdon, “Hometown Hit: Marsh Closing Two Muncie Stores,” The Star Press, January 10, 2014. K. Roysdon, “Jarden Move Takes 100 Jobs from Daleville to Fishers,” The Star Press, July 12, 2014. K. Roysdon, “Muncie’s Last Kmart to Close,” The Star Press, September 23, 2014. K. Roysdon, “Muncie Packager Laying Off Half Its Workforce,” The Star Press, August 16, 2014.
- “S. Slabaugh, “BZA OK’s Bell Aquaculture $30 Million Fish Farm Expansion in Albany by 4-3 Vote,” The Star Press, March 28, 2014. K. Roysdon, “New Hotel: Work Begins, Groundbreaking Set,” The Star Press, October 7, 2014. T. L. Moyer, “Anderson, Muncie and New Castle Uniting for the Future,” Herald Bulletin, October 11, 2014.
- S. Slabaugh, “$7 Million Downtown Muncie Apartment Project OK’d,” The Star Press, April 6, 2014. K. Roysdon, “Lofts at Roberts Ready to Open in Downtown Muncie,” The Star Press, April 8, 2014. K. Roysdon, “Huge Village Project Wants to Be ‘Good Neighbor’,” The Star Press, October 4, 2014.
- This is the inflation rate for the Midwest region using the CPI for all urban consumers.
- Forecast comes from the Indiana University Center for Econometric Model Research, as of August 2014.