Richmond forecast 2024
Director of the Business and Economic Research Center and Professor of Finance, Indiana University East
Richmond, the seat of Wayne County, is located on Indiana’s eastern border. This article focuses on the recent performance of selected key economic indicators and the 2024 economic outlook for the Richmond region, a region comprised of seven east-central Indiana counties: Fayette, Franklin, Henry, Randolph, Rush, Union and Wayne.
Manufacturing is the region’s largest industry sector, providing 13,369 jobs in 2023 Q1, followed by health care and social services (8,198 jobs), retail trade (7,674 jobs) and accommodation and food services (4,523 jobs) (see Table 1).
Per U.S. Bureau of Economic Analysis data for 2021,1 Wayne County continued to have the largest population and earn the highest total income in the region: approximately 32% of the region’s total population (209,699 people) and total income ($10.29 billion). Following Wayne County, Henry County housed close to one-quarter (23%) of the region’s total population and earned more than one-fifth (22%) of the region’s total income. Franklin County ($54,451) and Rush County ($54,210) had the highest per capita personal income (PCPI) values in the region, both reaching 96% of Indiana’s state PCPI ($56,497) and 85% of the U.S. PCPI ($64,143). While Randolph County (+13.3%) experienced the most percentage growth in PCPI since 2020, Franklin County (+6.8%) experienced the least growth.
Labor market
The average January-to-August monthly labor force of the region grew by half a percent to 96,584 people in 2023 compared to the year before (see Figure 1). The labor force averages of Henry County (22,301 people, -0.02%) and Wayne County (29,890 people, +0.04%) remained about the same between the two years, while Rush, Franklin, Union and Randolph counties increased their averages between 0.75% and 2.57%. Fayette County’s labor force average declined by 1.2% between 2022 and 2023.
Over the same eight months in 2023, the overall average monthly unemployment rate for the region was 3.56%, up by 0.35 percentage points from the year before. Whereas Rush County had the lowest average unemployment rate (2.91%) and Fayette County experienced the highest (4.60%), the rest of the region ranged between 3.1% and 3.7%. Except for Fayette County, all the other counties had slightly higher average unemployment rates in 2023 than the previous year.2
Figure 1: Richmond region labor force and unemployment rate
Note: Data are not seasonally adjusted. August 2023 data are preliminary.
Source: Local Area Unemployment Statistics (LAUS) from the U.S. Bureau of Labor Statistics
Jobs and wages
The region added 307 net new jobs in the private sector in Q1 of 2023 when compared with the year before (see Table 1). Manufacturing, construction, educational services and health care and social services added more than 100 jobs, while transportation and warehousing, mining, finance and insurance and management of companies and enterprises added between two and 39 jobs. Accommodation and food services experienced a substantial elimination of 802 jobs, while fewer than 100 jobs were lost in the following industries: retail trade; utilities; wholesale trade; information; real estate and rental and leasing; professional, scientific and technical; administrative, support, waste management and remediation; arts, entertainment and recreation; and other services.
Table 1: Employment by industry
| NAICS classification | Richmond region | Indiana | ||||
|---|---|---|---|---|---|---|
| 2023 Q1 | One-year change | 2023 Q1 |
One-year change | |||
| Total all | 65,454 | 367 | 3,110,035 | 59,942 | ||
| Total private | 53,994 | 307 | 2,721,528 | 51,940 | ||
| Manufacturing | 13,369 | 106 | 535,522 | -1,181 | ||
| Retail trade | 7,674 | -100 | 313,361 | 334 | ||
| Transportation and warehousing | 1,380(D) | 39(ED) | 162,748 | 2,028 | ||
| Agriculture, forestry, fishing and hunting | 40(D) | 0(ED) | 15,481 | 705 | ||
| Mining | 20(D) | 4(ED) | 5,362 | 281 | ||
| Utilities | 175(D) | -14(ED) | 12,958 | -381 | ||
| Construction | 2,986 | 121 | 151,761 | 7,123 | ||
| Wholesale trade | 1,586(D) | -11(ED) | 132,615 | 6,064 | ||
| Information | 371(D) | -26(ED) | 26,596 | 98 | ||
| Finance and insurance | 1,555 | 12 | 103,221 | 1,112 | ||
| Real estate and rental and leasing | 338(D) | -10(ED) | 36,173 | 1,329 | ||
| Professional, scientific and technical | 1,086(D) | -2(ED) | 147,298 | 8,515 | ||
| Management of companies and enterprises | 351(D) | 2(ED) | 34,970 | -203 | ||
| Administrative, support, waste management and remediation | 2,387(D) | -82(ED) | 177,584 | -6,981 | ||
| Educational services | 804(D) | 119(ED) | 51,776 | 2,231 | ||
| Health care and social services | 8,198(D) | 453(ED) | 424,086 | 15,903 | ||
| Arts, entertainment and recreation | 253(D) | -77(ED) | 34,389 | 1,618 | ||
| Accommodation and food services | 4,523(D) | -802(ED) | 265,408 | 9,526 | ||
| Other services (except public administration) | 1,615(D) | -29(ED) | 90,219 | 3,842 | ||
Note: (D) indicates data with one or more counties excluded due to non-disclosure issues and (ED) illustrates an estimate made based on such data for 2022 Q1 and/or 2023 Q1.
Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW)
The region saw an average 10.7% increase in the private sector’s weekly wages (see Table 2). With the exception of the mining industry (which suffered a decline of 17.7%), all other industries recorded an increase in average weekly wages ranging from 1.8% (agricultural, forestry, fishing and hunting) to 25.6% (arts, entertainment and recreation).
Table 2: Average weekly wage by industry
| NAICS classification | Richmond region | Indiana | ||||
|---|---|---|---|---|---|---|
| 2023 Q1 |
One-year change | 2023 Q1 | One-year change | |||
| Total all | $907 | 10.5% | $1,203 | 6.2% | ||
| Total private | $909 | 10.7% | $1,217 | 5.9% | ||
| Manufacturing | $1,152 | 11.6% | $1,586 | 4.3% | ||
| Retail trade | $609 | 7.2% | $712 | 6.0% | ||
| Transportation and warehousing | $1,100(D) | 10%(ED) | $1,103 | 10.4% | ||
| Agriculture, forestry, fishing and hunting | $692(D) | 1.8%(ED) | $938 | 10.4% | ||
| Mining | $628(D) | -17.7%(ED) | $1,652 | 14.6% | ||
| Utilities | $2,251(D) | 16.1%(ED) | $2,441 | 7.6% | ||
| Construction | $1,010 | 13.2% | $1,341 | 11.3% | ||
| Wholesale trade | $1,152(D) | 18.2%(ED) | $1,754 | 9.6% | ||
| Information | $809(D) | 11.1%(ED) | $1,588 | 10.6% | ||
| Finance and insurance | $1,443 | 7.5%(ED) | $2,060 | 6.0% | ||
| Real estate and rental and leasing | $701(D) | 10.4%(ED) | $1,179 | 2.4% | ||
| Professional, scientific and technical | $1,007(D) | 11.0%(ED) | $1,664 | 8.1% | ||
| Management of companies and enterprises | $2,312(D) | 12.0%(ED) | $2,876 | -1.0% | ||
| Administrative, support, waste management and remediation | $785(D) | 13.6%(ED) | $889 | 8.9% | ||
| Educational services | $650(D) | 4.2%(ED) | $902 | 6.1% | ||
| Health care and social services | $1,059(D) | 6.5%(ED) | $1,188 | 1.5% | ||
| Arts, entertainment and recreation | $446(D) | 25.6%(ED) | $873 | 0.0% | ||
| Accommodation and food services | $380(D) | 19.5%(ED) | $426 | 10.4% | ||
| Other services (except public administration) | $578(D) | 13.1%(ED) | $810 | 10.2% | ||
Notes: (D) indicates data with one or more counties excluded due to non-disclosure issues and (ED) illustrates an estimate made based on such data for 2022 Q1 and/or 2023 Q1.
Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW)
Housing market
Over the first eight months of 2023, except for Union County, the housing market in the region’s other counties saw the following as compared to the same period in 2022 (see Table 3):
-
a decline in new listings [highest in Randolph County (-39.8%) and lowest in Wayne County (-5.4%)]
-
a decline in closed sales [highest in Randolph County (-35.6%) and lowest in Wayne County (-8.0%)]
-
an increase in the median sales price [highest in Franklin County (+13.2%) and lowest in Fayette County (+0.6%)]
Unlike Union County, home sellers in all the other counties received a lower percentage of their original list price in 2023 than in 2022. The greatest drop occurred in Rush County (-5.8%), while the smallest one happened in Franklin County (-0.9%). Inventory went the fastest in Randolph County, with a closed sales/new listings ratio of 96.3% between January and August of 2023. On the other hand, Union County’s closed sales/new listings ratio of 57.1% indicates that the county had the slowest-selling housing market in the region.
Table 3: Year-to-date housing market update
| New listings | Closed sales | Median sales price | Percentage of original list price received | Closed sales /new listings 2023 | |||||
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2023 change | 2023 | 2023 change | 2023 | 2023 change | 2023 | 2023 change | ||
| Indiana | 63,290 | -15.4% | 51,983 | -15.0% | $246,900 | 5.1% | 96.9% | -2.7% | 82.1% |
| Fayette County | 107 | -23.0% | 78 | -24.3% | $122,700 | 0.6% | 95.1% | -1.3% | 72.9% |
| Franklin County | 126 | -10.0% | 94 | -15.3% | $275,000 | 13.2% | 95.9% | -0.9% | 74.6% |
| Henry County | 254 | -22.8% | 229 | -28.2% | $135,000 | 3.8% | 96.0% | -2.7% | 90.2% |
| Randolph County | 109 | -39.8% | 105 | -35.6% | $112,000 | 3.5% | 92.0% | -2.6% | 96.3% |
| Rush County | 134 | -10.1% | 98 | -18.3% | $161,000 | 6.6% | 92.2% | -5.8% | 73.1% |
| Union County | 7 | 75.0% | 4 | 33.3% | $130,000 | -39.5% | 105.7% | 16.3% | 57.1% |
| Wayne County | 592 | -5.4% | 497 | -8.0% | $140,500 | 7.7% | 94.6% | -1.1% | 84.0% |
Note: Year-to-date data (including detached single-family homes, condos and townhomes) reflect January through August data.
Source: Indiana Real Estate Markets Report by the Indiana Association of Realtors
Outlook
The IU East Regional Business Confidence Index (IUERBCI) and its sub-indexes, composed from local business operators’ responses to the annual business survey conducted in the region, declined this year (2023) as compared to last year (2022). The IUERBCI decreased by 2.4% this year, due to declines in its Present Situation sub-index (-5.0%) and Expectation sub-index (-0.5%) (see Table 4). These changes suggest that businesses in the region have again experienced a more challenging year in 2023 as compared to 2022. On the other hand, the surveyed businesses still have about the same expectations for 2024 as they had for 2023.
Table 4: IU East Regional Business Confidence Index and its sub-indexes
| 2022 | 2023 | 2022 | 2023 | ||
|---|---|---|---|---|---|
| IU East Regional Business Confidence Index value |
88.58 | 86.43 | IU East Regional
Business Confidence Index score |
2,141 | 2,089 |
| Annual change | -2.4% | ||||
| Present Situation Index value | 83.49 | 79.29 | Present Situation Index score | 875 | 831 |
| Annual change | -5.0% | ||||
| Expectation Index value | 91.44 | 90.95 | Expectation Index score | 940 | 935 |
| Annual change | -0.5% |
Source: The 2023 East-Central Indiana Business Survey, conducted by the IU East Business and Economic Research Center, September-October 2023
One-fifth (20.3%) of the surveyed businesses in the region maintained their production/business activities in 2023, which is at about the same level as in 2022. More than half of them (53.7%) responded that they had increased these slightly (by less than 5%) or significantly (by more than 5%). Most surveyed businesses (80.2%) maintained or expanded their employment in 2023. Only about one-tenth (10.9%) of them shrank their capital investment. 93.3% of the businesses surveyed experienced a rise in their cost of doing business, with 30.8% of businesses reporting a slight increase of less than 5% in their costs and 62.5% of businesses reporting a significant increase of more than 5% in their costs. Despite the challenging year, about two-fifths (38.9%) of the businesses managed to increase their profitability, whereas about a quarter (23.1%) preserved their 2022 profitability level.
Upon planning their 2024 operations, 88.6% of the surveyed businesses expect to increase or maintain their 2023 production/business activity level. While two-thirds (65%) of the businesses anticipate maintaining their 2023 employment level, only 4% plan to reduce their employees and 30.9% anticipate hiring more employees. More than 90% of the surveyed businesses plan on maintaining (60.3%) or increasing (32.2%) their capital investments in 2024. Of the businesses surveyed, 42.6% expect to see an increase in profitability, despite 81.7% of the survey participants anticipating an increase in the cost of doing business.
About a third (31.1%) of the surveyed businesses anticipate the same business and economic conditions in 2024 as in 2023. Over two-fifths (42.6%) are optimistic, while about a quarter (26.2%) are pessimistic about the 2024 conditions.
In the most recent Federal Open Market Committee (FOMC) meeting, the Federal Reserve Board forecasted the following for the U.S.: 3
-
Real GDP growth rate median: 2.1% for 2023 and 1.5% for 2024 (both better than the June projection)
-
Unemployment rate median: 3.8% for 2023 and 4.1% for 2024 (both better than the June projection)
-
Inflation rate median: 3.3% for 2023 and 2.5% for 2024 (2023 is 0.1 percentage point higher than the June projection and 2024 is the same as the June projection)
The October projections of U.S. real GDP growth by the International Monetary Fund (IMF) for 2023 and 2024 were the same as those made by the Fed above, up by 0.3 percentage points and 0.5 percentage points from their July projections, respectively.4
However, based on factors that might result in a slight recession for a short period in early 2024, such as elevated inflation, high interest rates, dissipating pandemic savings, mounting consumer debt, lower government spending and the resumption of mandatory student loan repayments, the Conference Board forecasted U.S. real GDP growth of 2.2% for 2023 and 0.8% for 2024.5
Summary
Taking into consideration that the U.S. inflation rate is still higher than the Fed’s long-run target of 2%, global supply-chain disruptions are still present (caused by two ongoing wars and other factors) and the labor force’s post-pandemic adjustment to jobs requiring physical presence at the workplace, businesses in the region continue to face some hardships in their operations. As a result, we project that the unemployment rate for the region will be around 3% through 2024, with some variation across industry sectors.
Notes
- U.S. Bureau of Economic Analysis (BEA) Regional Fact Sheets, https://apps.bea.gov/regional/bearfacts/.
- Data (not seasonally adjusted) obtained from Local Area Unemployment Statistics (LAUS) from the U.S. Bureau of Labor Statistics, https://www.stats.indiana.edu/laus/laus_view3.html.
- Federal Open Market Committee, “Summary of economic projections,” September 20, 2023.
- International Monetary Fund, “World economic outlook: Navigating global divergences,” October 2023, https://www.imf.org/en/Publications/WEO/Issues/2023/10/10/world-economic-outlook-october-2023.
- Conference Board, “Economic forecast for the U.S. economy,” October 12, 2023.
Acknowledgements
The author deeply appreciates the feedback/support from Dr. Litao Zhong and Dean Denise S. Smith of the School of Business and Economics, Indiana University East.
