News and Tribune

Floyd County

May 17, 2013

“Caution Light’ the economic forecast for rest of year in Southern Indiana

Indiana’s unemployment rate dropped, still higher than 2012

NEW ALBANY —  Southern Indiana has made progress since the employment dip at the depths of the latest recession, but there’s still some catching up to do, Indiana University Southeast economic expert Uric Dufrene said Friday.

During a mid-year economic outlook event, the Sanders Chair of the IU Southeast School of Business said Southern Indiana is nearing pre-recession employment levels.

“We’re adding jobs, but we still have some headwinds that we’re facing,” he said.

The Louisville Metro Statistical Area including Floyd and Clark counties is affected by national trends such as sales in the auto industry, Dufrene said.

If inventories rise due to lack of purchases, the key manufacturing sector will take a hit in the area, he said.

Louisville Metro is about 4,000 jobs shy of its pre-recession 627,000 mark.

“I’m very confident we’ll pass that this year,” said Dufrene, who was the keynote speaker during the annual event.

The IU Southeast School of Business hosts an economic outlook early in the year, and then provides a mid-year economic update.

Dufrene said there has been some recent deceleration on the employment front for the area, but he predicted more than 15,000 payrolls will be added in 2013.

Retail is a sector nationally that has seen some decline recently, and that will affect payrolls accordingly, Dufrene said.

There may be some deceleration in the employment sector, but Dufrene said that doesn’t mean the nation is headed toward another recession.

In recent years, payrolls rebounded dramatically locally in 2010 due to U.S. Census hiring in Clark County, Dufrene continued.

Naturally when those jobs ended, unemployment rates crept back up in the area, he said. Total wages are also stagnant, Dufrene continued.

“Households are still facing challenges in terms of discretionary spending,” he said.

And there’s a close relationship between payrolls, employment trends and spending, Dufrene said.

When durable goods orders decrease, the supply end of the spectrum also wanes which impacts payrolls, he continued.

However, Louisville Metro payroll gains have outpaced national, Indiana and Kentucky averages, Dufrene said.

Looking ahead, Dufrene advised the business leaders and officials who attended the event to think “caution light.” 

Though still well less than pre-recession levels, he said housing construction permits are increasing in the area.

The Ohio River Bridges Project should also bring new homeowners to the region, Dufrene said.

“I think that’s going to be significant,” he said.

A state employment report released Friday showed Indiana’s jobless rate declined from 8.7 percent in March to 8.5 percent in April.

The state added about 6,800 jobs over the past month, according to the report.

“April’s employment picture is cause for cautious optimism,” said Scott B. Sanders, commissioner of the Indiana Department of Workforce Development.

“There is quite a bit more work to do, but things seem to be moving in the right direction, as evidenced by the largest drop in the unemployment rate in over a year.”

While the rate did decline from month-to-month, it was still higher than the same time last year. In April 2012, Indiana’s jobless rate was 8.3 percent.

According to the preliminary data of the U.S. Bureau of Labor Statistics’ survey, Floyd County’s jobless rate was 7.8 percent and Clark County’s 7.7 percent for April.

 

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