Author: Faulk, Dagney
Date published: December 1, 2012
The data available thus far for 2011 show a mixed economic picture in the Anderson metropolitan area (Madison County). There are a few encouraging signs in the local economy. The 2010 Census showed only a small population decline (1.3 percent) from 2000. The unemployment rate has decreased over the past year. Manufacturing employment has increased as have overall wages. Anderson, like other cities in the Midwest, is struggling to redefine itself after the exodus of large-scale manufacturing firms over the past several decades. Added to this mix is the necessary restructuring of local government activities due to property tax caps. To its credit, Anderson has some high-profile companies such as Bright Automotive (hybrid electric vehicles) and Coes (antimicrobial additives) working on new technologies and increasing employment.
This article includes the most current data available on various measures of economic activity from public sources for the Anderson metropolitan area in order to analyze changes over the past year. A summary of the labor market forecast for the Anderson area is included in the conclusion.
In Madison County, the unemployment rate has decreased over the past year with the exception of a couple of months early in the year (see Table 1). The preliminary unemployment rate for September 2011 is 9.7 percent and is higher than the state (8.5 percent) and national (8.8 percent) unemployment rates (not seasonally adjusted). The number of unemployed workers in Madison County has slowly trended down since March, but the labor force has been decreasing also, leading to the stubbornly high unemployment rates for the county. This suggests that frustrated job seekers are continuing to drop out of the labor market, migrate out of the area or both.
A look at the Current Employment Statistics shows variation in employment gains and losses in 2011. Total non-farm jobs in Madison County averaged 39,700 for the first three quarters of 2011. This is a decrease of about 1,500 jobs since 2007, the beginning of the most recent recession. Manufacturing (adding over 300 jobs) was the sector with the most job growth. Sectors with the largest job losses were trade, transportation and utilities; leisure and hospitality; and government (see Table 2). This marks the second year of net increases in manufacturing employment, but these are small increases relative to the thousands of manufacturing jobs lost over the past four decades. The Anderson metropolitan statistical area (MSA) began the millennium with around 10,500 manufacturing jobs and currently has around 4,000. The peak for manufacturing employment was around 30,000 jobs in the early 1970s.
Average wages increased to $630 per week during the first quarter of 2011 (the most recent data available) and continue to be lower than the state average of $770 for the same period. Table 3 shows average weekly wages (not adjusted for inflation) for the first quarters of 2010 and 2011. Most sectors experienced increases in wages. The sectors with the strongest wage growth were manufacturing (23.4 percent), information (21 percent), and agriculture and forestry (13.4 percent). Sectors that experienced declines in wages include public administration (government), accommodation and food services, professional scientific and technical services, and educational services. The inflation rate between the first quarters of 2010 and 2011 was 2.2 percent, so workers in most sectors experienced real wage growth over this period.
The housing market showed further weakening in Madison County. Residential construction as measured by new single- and multi-family housing units increased with 39 permits issued between January and September 2011- down from 48 permits during the same period a year earlier (see Table 4). This is substantially lower than earlier in the decade. Sales of existing homes show no sign of recovery yet (see Table 5), although the decrease in the number of units sold was not as severe as in the previous year. Home sales through September 2011 decreased more than 6 percent relative to the same period in 2010 to about 2,300 units. The average price of homes sold was just over 3 percent higher but likely due to the mix of houses sold during this period.
Social Safety Net
Changes in the number of food stamp recipients and the dollar amount of food stamp payments are one indicator of economic distress in a community. The number of food stamp recipients and the corresponding amount of food stamps issued increased during the past year in Madison County but at a slower rate than the previous year (see Table 6).
The number of food stamp recipients increased 14 percent to more than 21,000 individuals (about 16 percent of the population in the county). The dollar amount distributed in food stamps increased by more than 13 percent to exceed $2.8 million. This increase reflects the state of the economy in east-central Indiana during the slow recovery from the recession.
May 2011 marked the third full year of operation of Hoosier Park Casino. After declining between 2009 and 2010, the winnings and the wagering tax generated at Hoosier Park increased over the past year. Winnings increased 7.8 percent to $216.9 million and wagering tax revenues generated from these winnings increased 9.9 percent to $60.9 million. As in the previous year, Hoosier Park ranked sixth of the 13 Indiana casinos for fiscal year 2011 in terms of total winnings. In November 2009, Ohio voters approved a ballot initiative to allow casinos in Cincinnati, Cleveland, Columbus and Toledo. The new Columbus and Toledo casinos are currently scheduled to open in March and April 2012, respectively. These casinos may draw patrons from Hoosier Park and other Indiana casinos.
The official numbers show small improvements over the situation last year in some areas. While the level of employment in the county has decreased, average wages have increased and the unemployment rate has decreased over the past year (but is still high by historical standards). The high unemployment rate and corresponding increases in the number of people needing public assistance, the slow rate of home sales, and the decreasing labor force in the county are the dark clouds.
In the coming year, we expect employment to stabilize and income will see small gains (in the 3 percent range) as the economy continues its slow recovery.
1. Forecast from the Center for Econometric Model Research, Indiana University, Bloomington, August 2011.
Dagney Faulk, Ph.D.: Director of Research, Center for Business and Economic Research, Ball State University