96 years of economic insights for Indiana

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

Bloomington forecast 2020

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Visiting Clinical Associate Professor, Indiana University Kelley School of Business and O'Neil School of Public and Environmental Affairs

A local economy is not an island in and of itself, but is part of the larger global economy. How it performs today and in the future is impacted by events that have already occurred, as well as events occurring in faraway locations. For these reasons, it is useful to consider both trending and the broader business climate when forecasting.

Gross domestic product

Gross domestic product (GDP) was almost $6.4 billion for the Bloomington Metropolitan Statistical Area (MSA)—comprised of Monroe and Owen counties—in 2017 (the most recent year available). That reflects a growth of approximately 2 percent since 2009, the year the Great Recession came to an end.1 During that same time period, real GDP for Indiana grew 15.4 percent,2 while U.S. GDP grew 19.1 percent.3

Unemployment rate

When the Great Recession officially ended in June 2009, the seasonally adjusted U.S. unemployment rate was 9.5 percent4 and the seasonally adjusted Indiana unemployment rate was 10.6 percent.5 The Bloomington unemployment rate was 7.5 percent (not seasonally adjusted).6 The recovery took time, but finally in November 2016, the unemployment rate in Bloomington dropped below 4 percent and has hovered between 2.9 and 4.6 percent since. In August of this year, it was 3.6 percent.

Employment growth

As one would expect, given the drop in Bloomington’s unemployment rate during this time period, employment has steadily grown. In June 2009, 75,226 people were employed7 and estimated employment for September 2019 was 79,166, a growth of 5.2 percent. During that same time period, Indiana’s total employment grew 12.8 percent (not seasonally adjusted). It is also encouraging to note that in the last year, the number of people employed in the Bloomington MSA has continued to grow.

Personal income

Personal income has also been rising. In real dollars, the total personal income generated in 2010 was $5.9 billion. The total for 2019 is currently estimated to be about 42 percent higher at $8.4 billion.8 Between 2010 and 2017, the latest year for which data are available, real per capita income grew 19 percent from $34,143 to $40,717.9 During that same time, real per capita income increased 28 percent across the country10 and 28 percent in Indiana.11

Population growth

The Bloomington area has many characteristics that make it an appealing place to live, reflected by a growth in population from 190,800 in 2009 to a forecasted population of 202,500 for 2019.12

Clearly, the trending for the Bloomington economy is positive. But, we must also consider the broader economic climate as we look to the future.

Bloomington outlook

Over the last decade, the Bloomington economy has performed well and has grown. When looking to the future, we recognize that many factors impacting the local economy cannot be predicted. For example, there are geopolitical issues around the globe that will impact the U.S., Indiana and Bloomington markets, including the great uncertainty regarding U.S. trade policy. These uncertainties impact not only international markets available to U.S. producers, but also the availability of inputs critical to U.S. manufacturing.

Given the information we have right now, however, it is reasonable to be cautiously optimistic about Bloomington’s economic outlook. The major industries that comprise the local economy are projected to continue to perform relatively well in the future. Eighty-nine percent of the jobs in the Bloomington MSA are in the following areas of employment: manufacturing; trade, transportation, and utilities; professional and business services; education and health services; leisure and hospitality; and government.13 The U.S. Bureau of Labor Statistics is projecting modest growth in most of these areas over the next 10 years; as examples, the projected annual growth for professional and business services is 0.8 percent and education services is 1.2 percent.14

Combined, Indiana University Bloomington, Cook Group, Indiana University Health, Monroe County Community School Corporation, and Baxter Healthcare Pharmaceuticals provide almost 20 percent of the area’s jobs. We anticipate demand in the industries represented by these organizations to remain strong. Additionally, these are employers who add a great deal to the appeal of the area.

While there are always uncertainties, there is good reason to expect the Bloomington economy to perform well in 2020 with a modest growth in both population and jobs and low unemployment.

Notes

  1. Fred.stlouisfed.org/series/RGMP14020, accessed 10-27-2019
  2. Fred.stlouisfed.org/series/INRGSP, accessed 10-27-2019
  3. Fred.stlouisfed.org/series/GDPCA, accessed 10-27-2019
  4. Data.bls.gov/timeseries/LNS14000000, accessed 10-27-2019
  5. https://data.bls.gov/timeseries/LASST180000000000003, accessed 10-27-2019
  6. Data.bls.gov/timeseries/LAUMT181402000000006, accessed 10-27-2019
  7. Data.bls.gov/timeseries/LAUMT181402000000006, accessed 10-27-2019
  8. Indiana Sub-State Model from the Indiana University Center for Econometric Model Research, September 2019
  9. Fred.stlouisfed.org/series/RPIPC14020, accessed 10-27-2019
  10. Fred.stlouisfed.org/series/A792RC0A052NBEA, accessed 10-27-2019
  11. Fred.stlouisfed.org/series/INPCPI, accessed 11-4-2019
  12. Indiana Sub-State Model from the Indiana University Center for Econometric Model Research, September 2019
  13. www.bls.gov/eag/eag.in_bloomington_msa.htm, accessed 11-4-2019 
  14. www.bls.gov/emp/tables/employment-by-major-industry-sector.htm