Muncie Forecast 2016
Director of Research, Center for Business and Economic Research, Ball State University
Graduate Assistant, Center for Business and Economic Research, Ball State University
The Muncie area economy presented a series of contrasts during 2015. The unemployment rate and food stamp payments decreased, but the labor force did not show steady growth. Employment increased, but it is still well below prerecession levels. Wages increased, but are consistently lower than state averages. The number of existing homes sold and sales prices increased, but construction of new residential units is virtually at a standstill.
As reported in the local media, a few local manufacturing and construction companies reported activity that suggests workforce expansions in the future. Asons, a Muncie construction and property management company, purchased the shuttered Wilson Middle School to rehabilitate as its headquarters, expecting to add more than 300 jobs over the next decade.1 Progress Rail announced that it is moving 100 temporary workers from contract to full-time status.2 Shrimp farming gained a toehold in the county.3
A couple of large downtown projects are changing the landscape of the central business district: Walnut Commons, a near-downtown supportive housing project providing shelter and services to the homeless population, opened in May 2015.4 The Courtyard Hotel and Erskine Green training center for people with disabilities is under construction, along with a parking garage, expecting to open in late 2016.5
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 fell dramatically during 2015, decreasing from 8.0 in January to 4.6 percent in September. This rate is also lower than one year ago (September 2014) when the unemployment rate was 6.3 percent. However, Delaware County’s unemployment rate is still higher than Indiana’s rate of 4.0 percent (not seasonally adjusted) in September 2015. While the number of unemployed workers in the Muncie MSA decreased by about 1,840 people (down 42.1 percent), the labor force is not growing; it actually decreased slightly (-0.1 percent) during 2015 (see Table 1).
Table 1: Labor Force and Unemployment in the Muncie Metro
|Year||Period||Labor Force||Unemployment||Unemployment Rate|
Note: Data are not seasonally adjusted.
Source: U.S. Bureau of Labor Statistics
The labor force and employment numbers are still lower than the prerecession peak which approached 56,000 with over 52,000 jobs, respectively. The lower labor force is due in part to increasing numbers of baby boomers retiring, but also because people have stopped looking for jobs. The low unemployment rate also doesn’t capture underemployment (such as when people work part-time but would prefer full-time work or people with jobs below their skill levels).
Nonfarm employment in Delaware County increased in 2015, adding more than 960 jobs (2.0 percent) since 2014 (see Table 2).
Table 2: Year-to-Date Muncie MSA Employment
|Industry||2011||2012||2013||2014||2015||Change since 2014||Percent Change, 2014-2015|
|Trade, Transportation and Utilities||8,438||8,888||8,788||8,863||8,963||100||1.1%|
|Private Educational and Health Services||9,450||9,213||8,775||8,350||8,313||-38||-0.4%|
|Leisure and Hospitality||4,775||4,900||4,950||4,938||5,100||163||3.3%|
|Government (Includes Public Schools and Hospitals)||12,188||12,813||12,925||12,275||12,838||563||4.6%|
Note: All data are January through August averages.
Source: U.S. Bureau of Labor Statistics and Indiana Department of Workforce Development
Nonfarm jobs are still about 2,000 jobs short of the prerecession level of employment, but this is welcome growth after the decline in 2014. Sectors experiencing job losses include private education and health services (-38 jobs) and financial activities (-13 jobs). Government (which includes public schools and hospitals) experienced the largest job gains with an increase of 563 jobs (4.6 percent). This job growth was mostly in state government jobs (425 new jobs) compared to local government jobs (113 new jobs). Leisure and hospitality added 163 jobs (3.3 percent), and the trade, transportation and utilities sector added 100 jobs (1.1 percent). Manufacturing employment held steady.
Average weekly wages in Delaware County rose for the fifth straight year, increasing from $705 to $724 (2.7 percent). Also, this was the 10th straight year that first quarter average weekly wages either increased or remained constant (see Table 3); however, wages in the Muncie MSA remain consistently below the state average.
Table 3: Average Weekly Wages in Muncie MSA
|Industry||2011 Q1||2012 Q1||2013 Q1||2014 Q1||2015 Q1||Change, 2014-2015||Percent Change, 2014-2015|
|Management of Companies and Enterprises||$1,977||$1,888||$1,807||$2,072||$2,475||$403||19.4%|
|Real Estate and Rental and Leasing||$594||$657||$697||$652||$692||$40||6.1%|
|Other Services (Except Public Administration)||$418||$426||$431||$439||$465||$26||5.9%|
|Arts, Entertainment, and Recreation||$255||$244||$263||$260||$275||$15||5.8%|
|Accommodation and Food Services||$222||$236||$231||$232||$244||$12||5.2%|
|Health Care and Social Services||$636||$700||$762||$776||$811||$35||4.5%|
|Transportation and Warehousing||$733||$788||$803||$807||$827||$20||2.5%|
|Administrative, Support, Waste Management and Remediation Services||$406||$438||$440||$455||$465||$10||2.2%|
|Finance and Insurance||$704||$835||$892||$960||$964||$4||0.4%|
|Professional, Scientific, and Technical Services||$704||$766||$812||$840||$837||$-3||-0.4%|
Source: U.S. Bureau of Labor Statistics and Indiana Department of Workforce Development
A majority of the industry sectors in 2015 (14 out of 18) experienced positive increases in weekly wages ranging from 0.4 to 19.4 percent. Eight of these sectors had increases of 5 percent or more: management of companies and enterprises (19.4 percent), construction (8.2 percent), wholesale trade (8.3 percent), public administration (6.6 percent), real estate and rental and leasing (6.1 percent), other services except public administration (5.9 percent), arts, entertainment and recreation (5.8 percent), and accommodation and food services (5.2 percent).
Four sectors saw a decline in average weekly wages in 2015: utilities; information; professional, scientific and technical services; and educational services.
The inflation rate between the first quarters of 2014 and 2015 was -0.6 percent, so workers in 16 of the 18 sectors experienced real wage growth over this period.6
The number of residential building permits issued within city limits continued to drop in 2015, falling from 14 new permits in 2014 to only three as of August 2015 (see Table 4).
Table 4: City of Muncie Year-to-Date Residential Building Permits
Note: Each year is based on January through August totals for building permits issued within Muncie city limits.
Source: U.S. Census Bureau
There were positive results in the residential real estate market in 2015. The number of units sold increased by 165 from 2014 to reach 882 in 2015—the highest it has been since 2007. The average number of days on the market decreased from 103 in 2014 to 84 in 2015—the lowest since before 2005. The average sale price increased by over $11,000 to $106,225—the greatest it has been since before 2005 (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||84|
|Average Sale Price||$101,891||$98,230||$92,596||$91,632||$90,628||$85,084||$85,957||$92,213||$85,592||$94,839||$106,225|
|Median Sale Price||$80,650||$80,000||$79,900||$75,500||$76,750||$69,950||$72,900||$79,900||$72,905||$80,000||$88,000|
|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%||1.19%|
Note: Each year is based on January through September data.
Source: Jim Kouns with the Mid-Eastern Indiana Association of Realtors (MEIAR)
Local real estate professionals attribute the increases in selling prices to an improving economy and a shortage of inventory due to the lack of new construction. The sale-to-list price ratio was 96.1 percent in the third quarter.7
Social Safety Net
Increases in employment and wages in the metro area are filtering down to low-income households. The dollar amount of food stamps issued decreased for the second year in a row after five consecutive years of increase (see Table 6).
Table 6: Food Stamp Recipients in Delaware County
|Delaware County||Total Food Stamps Issued
|Number of Food Stamp Recipients
|Number of Households Receiving Food Stamps
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
Delaware County issued an average of $2.4 million per month in food stamps in 2015. This is a 3.3 percent decrease since 2014 and the smallest amount issued since 2010. The number of food stamp recipients and number of households receiving food stamps also decreased in 2015, but are still greater than 2011 numbers.
The past year provided hints of increased economic activity, suggesting that Muncie may be moving beyond the long, slow recovery. The unemployment rate decreased, as did food stamp payments. Employment increased but the labor force is not growing, suggesting that frustrated workers have stopped looking for jobs. Housing prices increased and inventories are low by historical standards, which suggests that pressure is building for new construction.
In the coming year, we expect 1 percent growth in employment, as well as higher incomes (3 to 4 percent growth) for the Muncie metro.8
- K. Roysdon, “Former Wilson School Changes Hands,” The Star Press, May 7, 2015.
- K. Roysdon, “Progress Rail Adding Workers; Employs Hundreds,” The Star Press, February 14, 2015.
- S. Slabaugh, “Delaware County Raising Shrimp,” The Star Press, June 5, 2015.
- S. Slabaugh, “Homeless Apartments Complement Hotel,” The Star Press, July 14, 2015.
- K. Roysdon, “Downtown Projects Don’t End with Hotel, Streets,” The Star Press, July 23, 2015.
- This is the inflation rate for the Midwest region using the CPI for all urban consumers.
- Jim Kouns, “Year-to Date Report of Delaware Co. Real Estate Market Data, YTD Third Qtr. 2015.”
- Forecast comes from the Indiana University Center for Econometric Model Research, as of September 2015.