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Muncie forecast 2022

Author photo

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

Author photo

Research Assistant, Center for Business and Economic Research, Ball State University

The COVID-19 pandemic continued to impact the local economy. The number of new COVID-19 cases decreased dramatically during the spring and summer as vaccines became widely available, only to spike again late summer and into the fall as the delta variant gained a foothold in the region. At the beginning of November 2021, when this article was written, over 15,000 people in the county had tested positive (out of more than 231,000 tests administered) and 268 people had died of the COVID-19 virus since the beginning of the pandemic.1 For comparison, at the beginning of November 2020, just over 3,400 people in the county had tested positive (out of almost 28,500 people tested) and 85 had died of COVID-19.

Many of the changes in the data discussed in this article can be tied to economic forces unleashed by the pandemic and the related government responses. The pandemic interrupted small gains that had been made in previous years as the Muncie metro recovered from the Great Recession and various structural changes to the local economy related to dramatic decreases in manufacturing employment over the past several decades. Other trends, such as the decline in retail employment, continue even as the economy recovers.

Highlights from 2021’s business news included new businesses moving into several vacant sites around Muncie. Right Drive (a company that sells pre-owned vehicles) is scheduled to open at the former Hubler Ford lot, and North Central Industries (a local company that imports fireworks) is rehabbing a former tool and die facility near downtown into a warehouse and distribution facility.2 A Gillman Home Center store (hardware and building materials) is planned at the southside site of the recently demolished Red Roof Inn.3 A large, multifamily housing development is planned for a former Marsh supermarket site in southeast Muncie.4 In addition, the CanPack Group (a manufacturer of aluminum beverage cans) recently began construction of a facility expecting to employ over 300 workers in the southside industrial park.5 Muncie Power Products has purchased the former Brevini Wind facility near I-69 to expand operations.6

This article includes current data from public sources on various measures of economic activity 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 Muncie metro saw a large decrease in its unemployment rate as the labor market continued to open after the pandemic-related shutdowns that began in March 2020. The local unemployment rate fell from 6.1% in September 2020 to 3.8% in September 2021 (see Table 1). Along with the unemployment rate, total unemployment saw a similar decrease—going from 3,250 in September 2020 to 2,015 in September 2021 (a 38% decline). The labor force saw a very slight increase—going from 52,889 to 52,917 (+0.1%) over this same period. With a stagnant labor force and decreasing unemployment, we can see that people who continued looking for jobs are starting to return to work. The numbers for Indiana as a whole are similar, with a very slight decrease in the labor force (0.1%) over this period, decreasing unemployment (a 42% drop) and a lower unemployment rate (by 2.5 percentage points). The Muncie metro, along with the state as a whole, continue to see lower labor force participation and employment than pre-pandemic levels.

Table 1: Labor force and unemployment in the Muncie metro

Year Month Labor force Unemployment Unemployment rate
2020 September 52,889 3,250 6.1
October 53,372 2,847 5.3
November 53,341 2,574 4.8
December 52,683 2,407 4.6
2021 January 53,296 2,666 5.0
February 52,640 2,708 5.1
March 52,350 2,587 4.9
April 52,400 2,346 4.5
May 52,291 2,585 4.9
June 52,040 2,767 5.3
July 51,741 2,407 4.7
August 51,845 2,486 4.8
September 52,917 2,015 3.8

Note: Data are not seasonally adjusted.
Source: U.S. Bureau of Labor Statistics

Employment by industry is measured using the January-to-August average for each year. Total nonfarm employment saw its fourth year of continuous decline for the Muncie metro, falling 0.9% (-438 jobs) from 2020 (see Table 2). The Muncie metro saw decreases in eight industries, with the two largest being manufacturing (-8.7%) and financial activities (-6.4%). Four industries saw increases in employment—the largest was private educational and health services (6.2%). Leisure and hospitality saw a small increase in jobs and is still below the pre-pandemic level of employment. Job losses continue in retail trade (not shown), which came in at 5,625 jobs—a decrease of 200 from the previous year. “Help wanted” signs are abundant across a variety of industries, and employment would likely be substantially higher if more of the open jobs were filled.

Table 2: Year-to-date Muncie MSA employment

Industry 2017 2018 2019 2020 2021 Change since 2020 Percent change, 2020-2021
Total nonfarm  51,025  50,300  50,213  47,913  47,475 -438 -0.9%
Total private  38,638  38,288  38,563  36,638  36,525 -112.5 -0.3%
Goods-producing  5,788  5,825  5,863  5,400  5,063 -338 -6.3%
Manufacturing  4,300  4,188  4,225  3,725  3,400 -325 -8.7%
Private service-providing  32,850  32,463  32,700  31,238  31,463 225 0.7%
Trade, transportation and utilities  8,863  8,713  8,650  8,225  8,050 -175 -2.1%
Information  300  300  300  300  300 0 0.0%
Financial activities  2,463  2,288  2,238  2,338  2,188 -150 -6.4%
Private educational and health services  8,888  9,125  9,388  8,713  9,250 538 6.2%
Leisure and hospitality  5,250  5,225  5,500  4,975  5,013 37.5 0.8%
Other services  1,800  1,825  1,863  1,900  1,788 -113 -5.9%
Private service-providing—residual  5,288  4,988  4,763  4,788  4,875 88 1.8%
Government (includes public schools and hospitals)  12,388  12,013  11,650  11,275  10,950 -325 -2.9%

Note: All data are January through August averages.
Source: U.S. Bureau of Labor Statistics and Indiana Department of Workforce Development

Average weekly wages for the first quarter continued to increase in nominal terms for the fifth year in a row. Average weekly wages increased by 1.5% since 2020, coming in at $833 per week (see Table 3). Fourteen industries experienced wage increases, with the largest being arts, entertainment and recreation (18.5%) followed by accommodation and food services (11.1%). Five industries saw a decrease in average weekly wages with the largest being educational services (8.0%) and professional, scientific and technical services (6.7%).

Table 3: Average weekly wages in Muncie MSA

Industry 2020 Q1 2021 Q1 Change Percent change
Total $821 $833 $12 1.5%
Management of companies and enterprises 2,462 2,348 -114 -4.6%
Wholesale trade 1,147 1,164 17 1.5%
Construction 875 935 60 6.9%
Public administration 782 849 67 8.6%
Real estate and rental and leasing 667 681 14 2.1%
Other services (except public administration) 523 561 38 7.3%
Arts, entertainment and recreation 314 372 58 18.5%
Accommodation and food services 280 311 31 11.1%
Health care and social services 916 959 43 4.7%
Manufacturing 1,007 971 -36 -3.6%
Transportation and warehousing 893 896 3 0.3%
Administrative, support, waste management and remediation 666 728 62 9.3%
Retail trade 534 561 27 5.1%
Finance and insurance 1,382 1,388 6 0.4%
Professional, scientific and technical services 1,110 1,036 -74 -6.7%
Educational services 994 915 -79 -7.9%
Utilities 2,210 2,141 -69 -3.1%
Information 888 900 12 1.4%

Source: U.S. Bureau of Labor Statistics and Indiana Department of Workforce Development

Using the Midwest consumer price index, the inflation rate from the first quarter of 2020 to the first quarter of 2021 was 1.95%, which is higher than the 2018 and 2019 inflation rates of 1.23% and 1.87%, respectively. Overall, nine of the 18 industries had wage growth lower than the inflation rate and, therefore, experienced real wage decreases.

Housing

According to census data, the Muncie metro saw a total of 18 residential building permits issued through August 2021, all of which came from single-family permits (see Table 4). This low number may be due in part to survey response issues. The Muncie area had no multifamily permits during three of the past five years. The number of residential building permits continues to be low when compared to the number issued before the Great Recession.

Table 4: Muncie MSA year-to-date residential building permits

Year Total Single-family Multifamily
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 69 25 44
2015 3 3 0
2016 25 15 10
2017 10 6 4
2018 10 10 0
2019 21 21 0
2020 69 14 55
2021 18 18 0

Note: Each year is based on January through August totals.
Source: U.S. Census Bureau

In terms of home sales, the Muncie metro saw another increase in existing residential single-family units sold—totaling 1,047 between January and September 2021 (see Table 5). The average number of days on market is at an all-time low of 26 days. The region saw increases in both its average sale price and median sale price. Average sale price increased from $132,750 in 2020 to $151,257 in 2021; meanwhile, the median sale price increased from $116,300 to $125,100 over the same period. Each of these indicators suggest that the housing market is tight—experiencing high demand relative to the amount of inventory available. These numbers suggest that the housing market may be heating up, but the low number of building permits suggest that increasing prices are not yet enough to encourage large-scale building of new single-family units.

Table 5: Year-to-date residential real estate sales in Delaware County

2016 2017 2018 2019 2020 2021
Units sold 860 851 862 901 976 1047
Average days on market 68 59 51 56 50 26
Average sale price $106,438 $106,635 $118,788 $117,466 $132,750 $151,257
Median sale price $ 85,000 $88,000 $92,400 $99,500 $116,300 $125,100

Note: Includes residential, site-built homes only sold through the MLS. Each year is based on January through September totals.
Source: Indiana Regional Multiple Listing Service (MLS)

Social safety net

By late summer 2020, it looked like food stamp payments were starting to decrease, but since September 2020, Muncie metro has seen a steady increase in food stamps issued (see Table 6). This trend continued even as the economy recovered from pandemic-related closings and the unemployment rate decreased. From September 2020 to September 2021 the total dollar amount of food stamps issued increased from $2.54 million to $3.32 million (30.6%). The number of households receiving food stamps and the total number of food stamp recipients has decreased slightly over the year—by 2.3% and 1.3%, respectively.

Table 6: Food stamp recipients in Delaware County

Year Month Total food stamps issued Number of households receiving food stamps Number of food stamp recipients Food stamps average per household Food stamps average per recipient
2020 September $2,544,443  7,175  14,251 $355 $179
October $2,624,354  6,891  13,853 $381 $189
November $2,662,792  6,891  13,987 $386 $190
December $2,709,713  7,097  14,342 $382 $189
2021 January $3,129,427  7,291  14,666 $429 $213
February $3,130,517  7,216  14,625 $434 $214
March $3,107,794  7,207  14,523 $431 $213
April $3,279,913  7,114  14,377 $461 $228
May $3,330,598  7,084  14,356 $470 $232
June $3,337,450  7,088  14,375 $471 $232
July $3,293,509  7,009  14,157 $470 $233
August $3,255,519  6,929  13,950 $470 $233
September $3,324,284  7,011  14,059 $474 $236

Source: STATS Indiana, using Family and Social Services Administration data

Outlook

Muncie is recovering. The unemployment rate decreased dramatically, but the labor force remains lower than the pre-pandemic level, and there has been a small decline in total nonfarm employment. Food stamp payments continued to increase throughout the year, and the increase in average weekly wages did not keep up with inflation. Prices of existing homes have increased due to limited inventory. Leisure and hospitality employment has stabilized, while retail continues to see job losses.

The Indiana University Center for Econometric Model Research’s forecast shows employment growth of 2.2% in the Muncie MSA for 2022 as the county recovers from the pandemic. Income is projected to increase 0.3% during 2022, suggesting that job growth will occur in lower wage sectors.7 Population continues to show a slow decline with a projected 0.5% annual decrease.

Notes

  1. Delaware County EOC COVID-19 Dashboard, https://www.arcgis.com/apps/opsdashboard/index.html#/f7e2404ca14f431d8d1d499ad5256bfa. The number of positive cases reported on this dashboard is likely an undercount because people with mild symptoms or no symptoms are less likely to be tested.
  2. C. Stefanski, “2 vacant Delaware County sites will soon be home to an auto group and a warehouse facility,” Muncie Star Press, Sept. 16, 2021.
  3. D. Penticuff, “Southside Muncie to get development lift with new home store, apartments,” Muncie Star Press, Sept. 17, 2021.
  4. C. Ohlenkamp, “Former Marsh supermarket site to become apartment complex,” The Star Press, March. 1, 2021.
  5. D. Penticuff, “Start of construction of Muncie beverage can factory celebrated by Holcomb, local officials,” Muncie Star Press, Sept. 22, 2021.
  6. “Muncie Power Products buys Bevini Wind building, will spend $20 million on improvements,” Muncie Star Press, Aug. 12, 2021.
  7. Forecasts come from the Indiana University Center for Econometric Model Research (https://ibrc.kelley.iu.edu/analysis/cemr/), September 2021.