Muncie forecast 2023

Dagney Faulk, Ph.D.

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

Cade Deckard

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

During 2022, the Muncie metro continued to recover from the business closures and shutdowns that occurred during the height of the pandemic. The pandemic interrupted the small gains in employment and income that had been made over the 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. Positive gains in employment and income were evident during 2022, but the level of employment is still lower than pre-pandemic levels.

Highlights from 2022’s business news included new businesses moving to sites around Muncie. Living Green Farm, specializing in aeroponic farming, opened a facility in a shell building that had been vacant since 2014.¹ Filtrec, an Italian filter maker, opened a production facility and moved its North American headquarters to Delaware County.² A Gillman Home Center store (hardware and building materials) opened during September on the southside of Muncie. The CanPack Group, a manufacturer of aluminum beverage cans, continued construction of an 862,000 square-foot facility in the southside industrial park.³ BrickRed Systems, an IT consulting firm based in Redmond, Washington, purchased the former, mostly vacant Southway Plaza shopping center and plans to operate a facility there.⁴

This article uses the most recent data available (at the time of this writing) 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 area experienced low unemployment rates over the last year with several months coming in below 3%. The labor force, which consists of employed persons along with persons actively looking for work, is finally approaching pre-pandemic levels and grew from 51,714 to 53,241 during this period (September 2021 to September 2022). Before the pandemic, Muncie’s labor force topped 54,000 in 2019. With an increased labor force post pandemic and the high number of current job openings, we expect the unemployment rate to remain low, between 3% and 4% during the coming year, even as the macroeconomy adjusts to higher interest rates and the likelihood of recession.

Employment by industry was measured using January-to-August averages for each year. No single industry saw a decline in employment from 2021 to 2022 (see Table 2). The number of jobs increased by a total of 1,288 jobs, or 2.7%, over this period. The four industries that saw the greatest percentage gains in employment were leisure and hospitality (6.9%); trade, transportation and utilities (2.9%); financial services (2.8%); and other services (2.8%). Industries experiencing the slowest growth were manufacturing (1.8%); private educational and health services (1.5%); government (1.4%); and information (0.0%). Even with the continued growth of employment across industries, there is still an abundance of posted jobs ready to be filled. Retail trade, a subsector of trade, transportation and utilities, showed employment increases for the second year in a row as the economy recovered from pandemic closures.

Average weekly wages in Muncie have continued to increase reaching $911 per week, a 9.5% nominal increase over the past year (see Table 3). A total of 13 industries saw an increase in weekly wages, the largest being health care and social services (24.0%) followed by wholesale trade (17.3%). Five industries experienced a decline in wages, the largest being finance and insurance (-14.7%) and utilities (-4.6%).

Using the Midwest consumer price index, the inflation rate from the first quarter of 2021 to the first quarter of 2022 was 8.14%, much higher than previous years when the inflation rate was under 2%. Overall, eight of the 18 industries seen below had wage growth higher than the inflation rate and, therefore, experienced real wage increases.

Housing

Looking at census data, 177 residential building permits were issued in the Muncie metro through August 2022. 171 of them were single-family units and six were multifamily units (see Table 4). This is the highest number of housing permits issued since 2004. This dramatic increase in housing permits mirrors national trends over this period when mortgage rates were at historic lows.

Looking at single-family home sales in the Muncie metro, the number of units sold was lower during 2022 (see Table 5). Although fewer units were sold over this period, the average number of days on the market has drastically decreased since 2016. The Muncie metro also saw increases in both the average sales price as well as the median sales price for units sold. The average sales price increased from $151,257 in 2021 to $165,637 in 2022, while the median sales price increased from $125,100 to $139,000 over the same period. These indicators suggest that the housing market is experiencing high demand with relatively low supply of housing compared to earlier years. More recently, demand is decreasing in response to higher interest rates, which will put downward pressure on prices over the coming year.

Social safety net

From the fall of 2021 to the spring of 2022, food stamp payments in the Muncie metro steadily increased from $3.3 million to $3.5 million, until the summer of 2022 when food stamp payments drastically declined reaching $2.3 million during September (see Table 6). Although the total food stamps issued from September 2021 to September 2022 has decreased by 28.5%, the number of households that are receiving food stamps has increased by 0.7% over the same period. More people are using this social service, but receiving smaller payments than previously issued, which aligns with higher labor force participation as discussed earlier.

Outlook

The indicators presented in this analysis show that the Muncie metro is recovering from the pandemic recession. Labor force participation has increased over the past year, unemployment has decreased and the number of total food stamps has decreased. Employment has increased particularly in sectors like leisure and hospitality, financial activities and retail that were hit hard by the pandemic. Several industry sectors, including health care and social services, have experienced real (inflation-adjusted) wage gains. The housing indicators are consistent with a hot housing market that is likely to cool over the coming year as interest rate increases filter through the economy.

The Indiana University Center for Econometric Model Research’s forecast shows employment growth of 1.9% in the Muncie MSA over the next two years as the metro continues to recover from the pandemic, while income is projected to increase 4.5% during 2023.⁵ Population will continue to show a slow decline with a projected 0.25% annual decrease during 2023.