Muncie forecast 2025

Dagney Faulk, Ph.D.

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

Owen Holzbach

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

While the Muncie metro experienced employment and wage growth over the past year, the rate of growth has slowed. However, this was expected given the Federal Reserve’s policy actions to slow the economy. The number of food stamp recipients and payments were relatively stable over the year. New housing permits increased for both single-family and multi-family units. Home sales slowed a bit from the recent peak, but the single-family housing market is still tight.

Business news from 2024 includes new construction, business openings and the closing of longtime retail and manufacturing establishments:

• Construction of a Holiday Inn Express & Suites hotel on the northside began during the spring.¹ Expectations are that the added hotel capacity in the Muncie area can help meet demand related to conventions and events.

• The long-struggling Muncie Mall was sold to Hull Property Group, a retail group focused on redeveloping distressed regional retail centers.²

• A new storage and sorting facility for Buyer’s Market has located in the former Pepsi facility that closed in 2023.³

• Big Lots is the latest big box store to announce it will close its Muncie location by the end of 2024.⁴

• North American Stamping Group, an automobile parts producer, is also closing its Muncie facility by the end of 2024.⁵

• Construction began on Ball State’s Village revitalization plan, which includes a performing arts center and hotel.⁶

• The East Central Indiana region received a $35 million READI grant, which is helping to fund Ball State’s Village revitalization plan among other projects in the region.⁷

Labor markets

As the macro economy has cooled over the past year, Muncie has experienced volatility in its labor market (see Table 1). The unemployment rate increased from January to August 2024, reaching 5.2% (+0.8% over this period). Muncie’s unemployment rate was consistently higher than that of the state over this time period.

The metro’s labor force, which is the number of people working or actively looking for work, decreased from January to August 2024, while the labor force grew statewide. The Muncie labor force totaled 49,450 in August 2024, a number lower than the August 2019 pre-pandemic labor force of 52,207.

Employment by industry was measured using January-to-August averages for each year (see Table 2). Total nonfarm employment growth has slowed, increasing by only 0.7% to 48,050 in 2024, and remains lower than the 2019 pre-pandemic level of 49,713. Other services (+9.1%) and private educational and health services (+3.3%) saw the largest gains, while information (-11.1%) experienced the largest decrease.

Wage growth (reported in Table 3) was more muted than during the previous couple of years. Average weekly wages increased to $996 per week, a 2.9% nominal increase from the previous year. In contrast, wage growth during the previous two years was 8.3% (2023) and 7.4% (2022). Wages for the first quarter of 2024 increased in 13 of the 18 industries tracked below. Other services (+9.6%) and professional, scientific and technical services (+7.6%) saw the largest gains, while utilities (-17.0%) saw the sharpest decline.

The inflation rate, using the Midwest Consumer Price Index for the first quarter, was 2.76% between 2023 and 2024. This is lower than the 5.47% inflation rate for the previous period (2022 Q1 to 2023 Q1). Of the 13 industries that experienced nominal wage growth, 10 experienced wage growth that was higher than the inflation rate. The three sectors with wage growth below the inflation rate were management of companies and enterprises (+0.9%), health care and social services (+2.1%) and information (+1.1%).

Housing

Permits for new building construction during the first eight months of the year increased (see Table 4). Single-family permits increased by 72.1%, while multi-family permits increased 1,040%. New building permits are lower than in 2022 (177), but that is in part due to pent-up demand in 2022 as the economy emerged from the pandemic.

Single-family home sales through the Multiple Listing Service (MLS) experienced an uptick in 2024, although the number of homes sold is still lower than the peak sales periods during and immediately after the pandemic. The number of days on the market increased and the average sales price continued to increase (see Table 5). We expected home sales to slow down as mortgage rates increased, but the housing market remains tight.

Social safety net

Measures related to food stamp payments and the number of recipients (see Table 6) were stable over the period examined. Total food stamps issued in the Muncie MSA did not show much variation, increasing by 2.1% from September 2023 to September 2024. The number of households receiving food stamps was also stable, ranging from 6,900 to just over 7,000 over the same period. This accounts for about 16% of the households in the county.

Outlook

Over the year, the Muncie MSA experienced a shrinking labor force, higher unemployment rates and slow employment growth, with total employment still lower than pre-pandemic levels. Most of the job growth that did occur was in the services sector. Earnings growth was slower than the previous few years, with just over half of the industry sectors examined experiencing earnings growth higher than the inflation rate. The housing sector was a bright spot for the metro, with increases in the number of building permits issued and healthy sales of existing homes. The number of food stamp recipients and payments were stable, not increasing or decreasing much over the year.

The most recent forecast from Indiana University’s Center for Econometric Model Research shows employment growth of 1.89% over the next two years (2023 Q4 to 2025 Q4).⁸ Personal income is expected to increase 3.4% through 2027. The population projection shows a slight decrease of -0.23% by 2027.