Packaging Progress: Genpak Invests $6.69M in Southern Indiana

by with No Comment 1si News1si Press ReleaseEconomic Development

Scottsburg, IN. (Jan. 13, 2025)

Genpak LLC, a leading food service packaging manufacturer, will undergo a $6.69 million capital expenditure expansion at its Scottsburg facility as it builds polystyrene operations. The expansion will result in 45 new jobs by 2028, with opportunities for employees to earn an hourly wage above the current county average. The new jobs will add to the company’s 138 existing employees.

Genpak’s total training expenditure will be $173,000 for new business activities. Beyond employee investment, Genpak will also expand its existing infrastructure through multiple equipment upgrades that will bolster manufacturing operations.

Anyone interested in applying for a position with Genpak, located at 845 South Elm Street in Scottsburg, Indiana, can visit the company’s careers webpage by clicking here.

“Genpak is proud to invest in our Scottsburg location, a strategic imperative that strengthens our operations and fosters our talented workforce,” said Jeff Hebert, president of Genpak. “We greatly appreciate the strong support from the city, the Indiana Economic Development Corporation, and One Southern Indiana.  A packaging leader for over 50 years, we are committed to delivering outstanding products to the foodservice industry now and well into the future.”

Based on the company’s Indiana job creation plans, the Indiana Economic Development Corporation   committed an investment in Genpak of up to $425,000 in the form of incentive-based tax credits. These tax credits are performance-based, meaning the company is eligible to claim incentives once Hoosiers are hired. 

 “Indiana’s small businesses are lifting up the state’s economy and our Hoosier communities,” said Ann Lathrop, chief strategy officer at the IEDC. “Thanks to the ingenuity and commitment of companies like Genpak, our entrepreneurs and small businesses are paving the way forward, developing new solutions, supporting quality career opportunities and investing in our workforce, adding to the vibrancy of our communities across the state.” 

“We are elated about the expansion of Genpak here in our community,” said Scottsburg Mayor Terry Amick. “Their decision to make continued investments in their Scottsburg facility and add 45 new jobs emphasizes the attractiveness of Scottsburg’s business environment. We look forward to supporting their continued growth and success.”

“We are thrilled to see Genpak’s continued growth and investment in southern Indiana,” said Lance Allison, President of One Southern Indiana. “Genpak’s dedication to expanding operations and creating high-quality jobs highlights southern Indiana’s reputation as a center for innovation and manufacturing excellence. This expansion continues Genpak’s leadership in food service packaging and underscores their strong partnership and commitment to our community.”

About Genpak

Founded in 1969, Genpak is a leading manufacturer and innovator of foodservice packaging. From compostable containers and premium tableware to versatile hinged packaging, Genpak serves a multitude of restaurant operators and retail establishments across North America.  The company’s dedication to innovation, versatile food packaging solutions, and commitment to maintaining excellent customer relationships efficiently serve the ever-evolving demands of the foodservice industry.

About One Southern Indiana

One Southern Indiana (1si) was formed in July of 2006 as the economic development organization and chamber of commerce serving Clark and Floyd counties. 1si’s mission is to help businesses innovate and thrive in the southern Indiana / Louisville metro area via the three pillars of Business Resources, Economic Development, and Advocacy. For more information on One Southern Indiana, visit www.1si.org.

Contact:
Genpak
Jeffrey Hebert | Genpak
Jhebert@genpak.com | 980-256-7729

One Southern Indiana
Ellinor Smith | Content Marketing and Media Relations Manager
Ellinors@1si.org | 812-945-0266

Economic Update | Interest Rates and Indiana Manufacturing

by with No Comment 1si NewsEconomic Development

submitted by
Uric Dufrene, Ph.D., Sanders Chair in Business, Indiana University Southeast

The Fed reduced the Fed Funds rate by another quarter point, as expected. This marked the 3rd reduction during 2024, but as we suggested some time back, we will now see a slowdown in the number of Fed interest rate reductions for 2025.  We can expect a hold at the next Fed meeting, or no change to the current Fed Funds rate of 4.5%. This means that interest rates will likely be higher for longer. Higher interest rates have had a significant impact on interest-sensitive sectors like real estate and durable goods manufacturing. Manufacturing has had a greater impact on states like Indiana and Kentucky, where it often reigns as one of the largest economic sectors across state locales. Since higher interest rates ensued back in 2022, Indiana manufacturing employment is down by about 22,000. Kentucky fares better, with a gain of about 3,000 manufacturing jobs since that time. Indiana is a manufacturing-intensive state, with the highest percentage of manufacturing employment in the nation. Kentucky is also in the top 10.    

The higher interest rate impact of slower manufacturing on Indiana is lessened through diversification of an economy, and we can point to regional economies in Indiana for examples.  Kokomo, with 41% of its workforce employed in manufacturing, is experiencing an unemployment rate that exceeds 9%, and the region has added fewer than 1,000 payrolls since last year. Other heavy manufacturing metro areas, like Elkhart-Goshen and Columbus, are also seeing slow payroll growth. Elkhart-Goshen is down slightly and Columbus is under 1,000. The metro area with likely the greatest diversification is perhaps Indianapolis. Less than 10% of the Indianapolis workforce is now employed by manufacturing, and the largest sector, healthcare and social services, employs just under 12% of the workforce. Since last year, Indiana added 45,000 jobs, or a 1.4% growth rate. This is down from a couple of years ago, and largely due to the slowdown we are seeing in manufacturing. Indianapolis, on the other hand, added 30,000 jobs, representing a growth rate of 2.5%;  U.S. payroll growth was only 1.4% over that same period. Indianapolis holds about ½ of all payrolls in Indiana, but since last year, is responsible for 2/3rds of the job growth.   

Interestingly, there are two Indiana metro areas with a heavy concentration of manufacturing, and with job growth rates higher than Indiana and the U.S. Why are these two metro areas achieving higher growth rates in jobs, even with manufacturing being the largest sector in both regions? One possible link might be to education. Both regions are home to major research universities, and college attainment rates are higher than the Indiana average.   

The latest report on metropolitan employment shows Louisville Metro is up by 8,500 payrolls since last year, or 1.2% growth, under Kentucky growth of 1.5% and U.S, growth of 1.4%.  While manufacturing growth in Louisville has slowed, it does not explain the overall slower growth of total payrolls. Back in 2022 and 2023, leisure and hospitality were the major drivers of Louisville Metro payrolls, reaching growth rates as high as 16%, and in both years, leisure and hospitality growth exceeded overall payrolls. During this past year, however, leisure and hospitality growth has slowed, now negative year-over-year for the past 6 months. Two sectors, education and health services along with professional business services, explain about 70% of the job growth over the past year.     Manufacturing still maintains a significant position in Louisville Metro but is no longer the largest industry. Louisville Metro is a service town, with education and health services and professional and business services making up the two largest sectors. 

The latest ISM (Institute for Supply Management) report on manufacturing came in just under 50, slightly under expansion.    New orders and production were both expanding, however, showing some green shoots in manufacturing. Despite higher interest rates, this could be early signs of a nascent recovery in manufacturing for 2025. 

 

Anne Keller headshot

Long-Standing One Southern Indiana Employee Wins Inaugural Economic Development Award

by with No Comment 1si News1si Press ReleaseEconomic Development

Anne Keller, Sr. Director of Business Development, won the Excellence in Local Economic Development award. 

New Albany, IN. (December 13, 2024) 

Anne Keller headshotOne Southern Indiana (1si) is proud to share that Anne Keller, Senior Director of Business Development, has received the inaugural Excellence in Local Economic Development award, presented by the Indiana Economic Development Corporation (IEDC), in honor of her hard work and dedication throughout the state of Indiana.  

Keller, who has been with 1si for over eleven years, works exclusively to provide detailed and critical information to site selectors and vendors to match them with site opportunities in Southern Indiana. Her work has helped bring projects such as Conco, Inc., Meta, and Canadian Solar to the region. In addition to working with site selectors and vendors, Anne is part of several committees and organizations, including the 1si Pearls of Wisdom committee, the 1si Economic Development Council, and serves as the Treasurer for the South Central Indiana Economic Development group. 

The IEDC Excellence in Local Economic Development award, a statewide recognition, is an honor given to an individual who has shown great initiative in business attraction efforts in the state of Indiana. The inaugural award was presented at the Indiana Economic Development Association’s (IEDA) Annual Conference in Indianapolis, Indiana.  

“Anne Keller is a vital part of 1si and the Southern Indiana region,” said Lance Allison, president and CEO of 1si. “Anne continues to be instrumental in bringing projects to Clark, Floyd, and Scott County, and her dedication to business attraction is shown with the quality of work and projects. We are excited for Anne and this phenomenal accomplishment!”  

About One Southern Indiana  
One Southern Indiana (1si) was formed in July of 2006 as the economic development organization and chamber of commerce serving Clark and Floyd counties. 1si’s mission is to help businesses innovate and thrive in the Southern Indiana / Louisville metro area via the three pillars of Business Resources, Economic Development, and Advocacy. For more information on One Southern Indiana, visit www.1si.org.   

  
Ellinor Smith, Content Marketing and Media Relations Manager  

EllinorS@1si.org  | 812-945-0266  

Economic Update | Growth versus Inflation – a match shaping up for 2025

by with No Comment Economic Development

submitted by
Uric Dufrene, Ph.D., Sanders Chair in Business, Indiana University Southeast

Will the economy cause the Fed to slow rate cuts?  The probability of another Fed rate cut in December has come down from upwards of 80% to about 66%. As we move into 2025, the pace of cuts is expected to slow, counter to expectations at the advent of the rate-cutting cycle.  There are two primary reasons for the expected slowing of cuts:  a strong economy and the stickiness of inflation. 

The Fed led the cutting cycle with an unexpected reduction of 50 basis points. This was in the middle of an existing strong economy and inflation, while lower than the start of the year, had still not reached the target of 2%. The Fed will reduce in December, but expect January odds to come down after the release of economic data, shifting the odds to no reduction in January.    

For the strength of the economy, we can look at gross domestic product (GDP), which is the market value of goods and services produced by the macroeconomy.  The latest figures show that GDP increased by 2.8%, from the 2nd to the 3rd quarter of 2024. This is well above the average quarterly growth since 2022. And the consumer is driving this growth, responsible for a whopping 85% of the 2.8%. 

While consumer sentiment remains depressed, largely due to the negative effects of inflation, consumers remain confident due to a couple of ongoing dynamics.  One is the labor market.  While the labor market has softened, the unemployment rate remains at relatively low levels and job openings continue to exceed the number of unemployed.  Layoffs, as measured by new claims for unemployment, are at historically low levels. Current levels are just over 200,000 weekly, and these are nowhere near levels needed for any hints of a recession. The other factor driving consumer spending is household balance sheets. The net worth of households is at an all-time high, driven by home values and the equity markets. During the Great Recession, it took about 5 years to recover the net worth lost during the housing crash and equity market losses. Coming out of Covid, household wealth suffered declines in 2022 but has been climbing since. Strong balance sheets encourage spending, and this is showing up in sustained consumer spending, the big driver of gross domestic product. 

Since the Fed began its rate-cutting cycle, inflation is higher than it was at the end of September. The post-Fed cut inflation rate was 2.41% at the end of September and the most recent data places headline CPI at 2.6%. The core rate, CPI minus food and energy, is even higher at 3.3%. We see the impact of this sticky inflation on the 10-year yield, higher now than levels that existed just prior to the September Fed rate reduction. For the consumer, this means elevated mortgage rates compared to the recent low of 6.1%.    

In summary, the Fed will likely cut in December. The absence of a cut would signal the mistake that was made in September, but unless the data deteriorates considerably, expect a pause for January.   

Regional Updates 

As 2024 comes to an end, the Louisville Metro area will see slower payrolls this year compared to 2023. Latest preliminary estimates show that Louisville payrolls are up about 3,700 from the prior year, and the unemployment rate about 3/4% higher than 2023, 4.2% compared to 3.5% last year. The region saw gains in education and health services, transportation and warehousing, and professional and business services. However, losses in leisure and hospitality, manufacturing, financial activities, retail and information provided headwinds to overall payroll growth. 

We see similar patterns in Southern Indiana. The most recent county data show that Southern Indiana gained over 1,000 jobs in the second quarter of 2023, compared to the prior year. Healthcare and transportation and warehousing were the dominant growth sectors and manufacturing saw another decline, over 1,000 payrolls. 

These most recent changes for Southern Indiana are consistent with the pattern that emerges from pre-Covid to now. Since 2019, the year prior to Covid, the largest gainer for Southern Indiana is transportation and warehousing, followed by health care and social services.  Accommodation and food services is up just over 1,000 positions. The greatest loss is observed for manufacturing, down more than 2,500 jobs since 2019. Even with this significant decline, both total wages and average weekly wages are higher, pointing to productivity gains in regional manufacturing.  Despite the decline in payrolls, manufacturing also remains as the sector with the highest level of total wages across Southern Indiana, reinforcing the role as an impactful economic development sector. 

As we exit 2024, the region can expect an acceleration of payroll growth and an unemployment rate that remains relatively flat.    Expect volatility in the markets, but the U.S. will avoid a recession.   

As the macroeconomy accelerates in growth, the battle between growth and inflation will ensue. Supporting both growth and disinflation will be a supply side boost to the economy, brought about by a deregulatory environment, and incentives that boost labor force participation and capital investment.    

International minerals supplier establishing first U.S. facility at Ports of Indiana–Jeffersonville to support green manufacturing

by with No Comment 1si Press ReleaseEconomic Development

Lumina Sustainable Materials to open mineral processing, research hub in Jeffersonville 

JEFFERSONVILLE, IN. (Nov. 12, 2024) An international supplier of specialized minerals will develop its first U.S. facility at Ports of Indiana-Jeffersonville to supply Midwest manufacturers with greener mineral additives. Lumina Sustainable Materials will invest $14.3 million at the Jeffersonville port to establish a multimineral processing facility, logistics base, and test laboratory to serve the rapidly growing polymers, electronic glass, coatings, aerospace, and building and construction markets. The new operation, located at 1302 Port Road, plans to add 50 full-time positions by 2027 with an average hourly wage of $35 per hour.   

“The total value package offered by Ports of Indiana and the State of Indiana is unmatched,” said Lumina Sustainable Materials CEO Brian Hanrahan. “The ability to ship by barge into the Midwest, to leverage logistics facilities and services, and to partner with the port on future expansions and container exports makes Jeffersonville a perfect place for our U.S. processing and research facility. We mapped our target customers for polymers, coatings, and building and construction, and Jeffersonville is in the center of it all.” 

Lumina sources minerals from around the world and is working with Purdue University, NASA, and NASA subcontractors to develop innovative mineral-based products, improve lunar simulants, and support research projects involving space travel. The company will renovate and repurpose an existing building at the Jeffersonville port that has been vacant for more than 10 years and will partner with Ports of Indiana to develop a shared laboratory facility for research and educational uses by community partners and schools. The Jeffersonville facility will use the port’s barge and rail services and serve as Lumina’s processing and logistics hub for the Western Hemisphere. In addition to mineral processing, the Jeffersonville site will manufacture advanced polymer additives, including concentrates of novel flame retardants, performance modifiers, and lightweight mineral fillers. 

“Lumina’s decision to establish its first U.S. facility in Jeffersonville speaks volumes about our city’s appeal as a center for innovation and growth,” said Mayor Moore. “This investment brings exciting opportunities for new high wage jobs and strengthens our position as a logistics and research hub for advanced industries. We’re proud to welcome Lumina to Jeffersonville and look forward to partnering with them as they bring economic and environmental value to our community and around the world.” 

“We’re thrilled our Jeffersonville port can serve as a launch pad for Lumina’s first U.S. facility,” said Ports of Indiana CEO Jody Peacock. “This is an innovative company that has done extensive research to find an ideal U.S. location to support its global supply chain. We’re excited to partner with Lumina to grow business and develop facilities that will create innovative products and drive further research and education in our community.” 

Funded by investors in Canada and Switzerland, Lumina primarily processes anorthosite, a silicate mineral, that replaces less environmentally friendly raw materials in the production of electronic glass, plastics, paint and fiberglass. The product comes from the White Mountain Mine in western Greenland, which has the largest anorthosite deposit on earth. The only larger deposit is on the moon. Anorthosite will be shipped from Greenland to New Orleans by ocean vessel and transloaded to barge for transport to Jeffersonville.  

Lumina works with allied mineral suppliers from around the world, sourcing pyrophyllite from Canada, barium sulfate from Morocco, bauxite from Guyana and graphite from Greenland. It is also developing the first vertically integrated manufacturing operations for producing battery anodes from mine to finished active anode material. 

“International companies like Lumina continue to choose Indiana for U.S.-based growth thanks to our pro-growth business environment and skilled talent pipeline,” said Ann Lathrop, chief strategy officer at the Indiana Economic Development Corporation (IEDC). “We are excited to welcome Lumina to our ecosystem of innovators statewide that is developing new solutions and creating new products to advance the future economy.”  

Based on the company’s job creation plans, the IEDC committed an investment in Lumina of up to $725,000 in the form of incentive-based tax credits. These tax credits are performance-based, meaning the company is eligible to claim incentives once Hoosiers are hired.  

“Considering Lumina could have located anywhere in the Western Hemisphere, we’re extremely honored they picked our Jeffersonville port,” said Lance Allison, president and CEO of One Southern Indiana. “It’s gratifying for our regional economic development team to partner with a forward-looking company like Lumina that is committed to providing economic and environmental value to our region.” 

About Lumina Materials: Lumina is an innovative material science company tackling today’s most pressing manufacturing challenges with industry-leading sustainability. With customers around the world, Lumina is developing infrastructure for growth in North American and Europe while exploring additional materials and technologies to create sustainable solutions for critical markets. Lumina is a privately-owned business shipping minerals such as anorthosite from Greenland to customers on three continents and developing high impact products that extend beyond industrial minerals through custom chemistry and processing solutions. www.luminamaterials.com  

About Ports of Indiana 

Ports of Indiana is a statewide port authority operating three ports on the Ohio River and Lake Michigan. Established in 1961, Ports of Indiana is dedicated to growing Indiana’s economy by developing and maintaining a world-class port system, and by serving as a statewide resource for maritime issues, international trade, and multimodal logistics. www.portsofindiana.com  

About One Southern Indiana 
One Southern Indiana (1si) was formed in July of 2006 as the economic development organization and chamber of commerce serving Clark and Floyd counties. 1si’s mission is to help businesses innovate and thrive in the Southern Indiana / Louisville metro area via the three pillars of Business Resources, Economic Development, and Advocacy. For more information on One Southern Indiana, visit www.1si.org.  

Contacts: 

Lumina Sustainable Materials 
Brian Hanrahan | CEO / Commercial North America and R&D 
Brian@Lumina.gl  

Ports of Indiana 
Eric Powell | Director of Communications 
Epowell@portsofindiana.com | 317-233-6231 

One Southern Indiana 
Ellinor Smith | Content Marketing and Media Relations Manager 
EllinorS@1si.org | 217-320-4832 

 

### 

International minerals supplier establishing first U.S. facility at Ports of Indiana–Jeffersonville to support green manufacturing 

by with No Comment 1si News1si Press ReleaseEconomic DevelopmentMember News

Lumina Sustainable Materials to open mineral processing, research hub in Jeffersonville 

JEFFERSONVILLE, IN. (Nov. 12, 2024) An international supplier of specialized minerals will develop its first U.S. facility at Ports of Indiana-Jeffersonville to supply Midwest manufacturers with greener mineral additives. Lumina Sustainable Materials will invest $14.3 million at the Jeffersonville port to establish a multimineral processing facility, logistics base, and test laboratory to serve the rapidly growing polymers, electronic glass, coatings, aerospace, and building and construction markets. The new operation, located at 1302 Port Road, plans to add 50 full-time positions by 2027 with an average hourly wage of $35 per hour.   

“The total value package offered by Ports of Indiana and the State of Indiana is unmatched,” said Lumina Sustainable Materials CEO Brian Hanrahan. “The ability to ship by barge into the Midwest, to leverage logistics facilities and services, and to partner with the port on future expansions and container exports makes Jeffersonville a perfect place for our U.S. processing and research facility. We mapped our target customers for polymers, coatings, and building and construction, and Jeffersonville is in the center of it all.” 

Lumina sources minerals from around the world and is working with Purdue University, NASA, and NASA subcontractors to develop innovative mineral-based products, improve lunar simulants, and support research projects involving space travel. The company will renovate and repurpose an existing building at the Jeffersonville port that has been vacant for more than 10 years and will partner with Ports of Indiana to develop a shared laboratory facility for research and educational uses by community partners and schools. The Jeffersonville facility will use the port’s barge and rail services and serve as Lumina’s processing and logistics hub for the Western Hemisphere. In addition to mineral processing, the Jeffersonville site will manufacture advanced polymer additives, including concentrates of novel flame retardants, performance modifiers, and lightweight mineral fillers. 

“Lumina’s decision to establish its first U.S. facility in Jeffersonville speaks volumes about our city’s appeal as a center for innovation and growth,” said Mayor Moore. “This investment brings exciting opportunities for new high wage jobs and strengthens our position as a logistics and research hub for advanced industries. We’re proud to welcome Lumina to Jeffersonville and look forward to partnering with them as they bring economic and environmental value to our community and around the world.” 

“We’re thrilled our Jeffersonville port can serve as a launch pad for Lumina’s first U.S. facility,” said Ports of Indiana CEO Jody Peacock. “This is an innovative company that has done extensive research to find an ideal U.S. location to support its global supply chain. We’re excited to partner with Lumina to grow business and develop facilities that will create innovative products and drive further research and education in our community.” 

Funded by investors in Canada and Switzerland, Lumina primarily processes anorthosite, a silicate mineral, that replaces less environmentally friendly raw materials in the production of electronic glass, plastics, paint and fiberglass. The product comes from the White Mountain Mine in western Greenland, which has the largest anorthosite deposit on earth. The only larger deposit is on the moon. Anorthosite will be shipped from Greenland to New Orleans by ocean vessel and transloaded to barge for transport to Jeffersonville.  

Lumina works with allied mineral suppliers from around the world, sourcing pyrophyllite from Canada, barium sulfate from Morocco, bauxite from Guyana and graphite from Greenland. It is also developing the first vertically integrated manufacturing operations for producing battery anodes from mine to finished active anode material. 

“International companies like Lumina continue to choose Indiana for U.S.-based growth thanks to our pro-growth business environment and skilled talent pipeline,” said Ann Lathrop, chief strategy officer at the Indiana Economic Development Corporation (IEDC). “We are excited to welcome Lumina to our ecosystem of innovators statewide that is developing new solutions and creating new products to advance the future economy.”  

Based on the company’s job creation plans, the IEDC committed an investment in Lumina of up to $725,000 in the form of incentive-based tax credits. These tax credits are performance-based, meaning the company is eligible to claim incentives once Hoosiers are hired.  

“Considering Lumina could have located anywhere in the Western Hemisphere, we’re extremely honored they picked our Jeffersonville port,” said Lance Allison, president and CEO of One Southern Indiana. “It’s gratifying for our regional economic development team to partner with a forward-looking company like Lumina that is committed to providing economic and environmental value to our region.” 

About Lumina Materials: Lumina is an innovative material science company tackling today’s most pressing manufacturing challenges with industry-leading sustainability. With customers around the world, Lumina is developing infrastructure for growth in North American and Europe while exploring additional materials and technologies to create sustainable solutions for critical markets. Lumina is a privately-owned business shipping minerals such as anorthosite from Greenland to customers on three continents and developing high impact products that extend beyond industrial minerals through custom chemistry and processing solutions. www.luminamaterials.com  

About Ports of Indiana 

Ports of Indiana is a statewide port authority operating three ports on the Ohio River and Lake Michigan. Established in 1961, Ports of Indiana is dedicated to growing Indiana’s economy by developing and maintaining a world-class port system, and by serving as a statewide resource for maritime issues, international trade, and multimodal logistics. www.portsofindiana.com  

About One Southern Indiana 
One Southern Indiana (1si) was formed in July of 2006 as the economic development organization and chamber of commerce serving Clark and Floyd counties. 1si’s mission is to help businesses innovate and thrive in the Southern Indiana / Louisville metro area via the three pillars of Business Resources, Economic Development, and Advocacy. For more information on One Southern Indiana, visit www.1si.org.  

Contacts: 

Lumina Sustainable Materials 
Brian Hanrahan | CEO / Commercial North America and R&D 
Brian@Lumina.gl  

Ports of Indiana 
Eric Powell | Director of Communications 
Epowell@portsofindiana.com | 317-233-6231 

One Southern Indiana 
Ellinor Smith | Content Marketing and Media Relations Manager 
EllinorS@1si.org | 217-320-4832 

### 

Economic Update | Is the Weak Jobs Report an Early Signal?

by with No Comment Economic Development

–And Consumers Power Ahead 

submitted by
Uric Dufrene, Ph.D., Sanders Chair in Business, Indiana University Southeast

The U.S. economy saw the smallest monthly gain in payrolls since 2020.  The BLS monthly employment report showed that payrolls increased by only 12,000 in October, significantly under the 112,000 that was expected. The unemployment rate remained flat at 4.1%. Two hurricanes, including one that occurred during the survey reporting period, along with a major Boeing strike, were cited as possible reasons for the overall weak number. Given the uncertainty, this is not necessarily a signal for a broader slowdown in the economy. We should treat it as a one-off and wait until the next employment report for additional hints of a developing trend. 

Here are some of the reasons why the weak employment number is not part of a broader slowdown. First, we can look at weekly unemployment claims. In the past two weeks, unemployment claims have continued to decline and have come in under consensus estimates.  Last week, claims were at a very low 216,000, which is well under any level associated with a weakening economy.  Secondly the ADP Report, a labor report produced by the private firm ADP on the Wednesday before the BLS report, showed that the nation added 233,000 jobs, well over the consensus of 104,000.  The ADP report is historically volatile and there is debate around its usefulness. Nonetheless, it is a data point, and one that does convey some information about the labor market. Finally, the consumer continues to be resilient.  Making up 2/3rds of the U.S. economy, the consumer continues to drive economic growth. Recent consumer surveys showed increases in consumer optimism, and the latest report on consumer spending showed healthy gains.   

A strong economy was evident with the latest GDP report.  The preliminary report on GDP showed that gross domestic product increased by 2.7% over the prior year, higher than the consensus estimate of 2.5%. Over the quarter, growth was 2.8%, and of the 2.8%, consumers contributed 2.46 points out of the 2.8%. Consumers drove growth in the third quarter, and with rising consumer sentiment numbers, there are no noticeable signs of a consumer slowdown just yet. 

On the inflation front, the Fed’s preferred inflation gauge, the core PCE price index, was a little hotter than expected and above the Fed’s target of 2%. While the Fed has made tremendous progress in driving the inflation rate down, it remains elevated and above target. As we mentioned in the last update, after the Fed’s unexpected cut of ½ percent, the 10-Year Treasury started climbing, and last week, saw additional gains, closing at 4.4%, and up from 3.7% just a few weeks ago. The yield closed higher after the dismal employment report, suggesting that bond participants were not pricing any significant slowdown due to the weaker jobs report. Market participants continue to price two additional rate cuts, but we can likely expect the pace to slow.    

Higher interest rates will continue to impact interest rate sectors like manufacturing, and the latest employment report showed a decline of 46,000 jobs. The ISM Manufacturing Index showed continued contraction in the sector, with the index coming in at 46.5, lower than expected. Slower manufacturing has had an impact on manufacturing intensive states like Indiana and Kentucky, with slower payroll gains and unemployment rates that exceed the national average.   

There had been increasing doubt about remaining Fed cuts this year, due to sticky core inflation and robustness of the consumer.  The weak jobs report sealed the deal for the case for cuts remaining this year. As we go into 2025, expect the pace for cuts to slow and become more uncertain. 

pāco manufacturing Gears Up for Growth: Precision Automation Expands Operations in Clarksville, IN with $157K Investment and Job Creation

by with No Comment 1si News1si Press ReleaseEconomic Development

Clarksville, IN. (Oct. 29, 2024) 

Precision Automation Company, Inc. (pāco manufacturing) will undergo expansion as they merge their New Jersey-located manufacturing operation to Clarksville, Indiana, which will more than double their throughput capacity. In addition to relocating 15 pieces of production machinery and support infrastructure from the New Jersey location, the project involves a total capital investment of $157,017 and will create approximately 14 new full-time positions by 2025. The company has 14 associates at its current location. The move also includes ongoing training for new business activities with $153,000 in expected total training expenditure by 2025. 

Since 1946, Precision Automation Company, Inc. has provided high quality Automation Systems, Contract Machine Work, Fabrication, Machinery, Controls, and related integration services that improve productivity for their customers. Additionally, they work with several industries such as pharmaceuticals, food and beverage, warehousing and distribution centers, and consumer goods. Now, they will continue to serve a diversity of markets both domestically and globally by expanding their Clarksville operation which has been in Indiana since 1953 and the current Clarksville location since 1968. 

Robert Daily, pāco manufacturing vice president, shares “We look forward to our expanded operations in Clarksville, Indiana. This expansion marks an exciting new chapter for our company as we integrate our New Jersey-based manufacturing operation into our Indiana facility. We are committed to investing in our local community by offering competitive wages and training to contribute to our employees’ success. We are excited to increase our capacity, continue providing high quality products to our customers, and watching Clarksville grow stronger because of our efforts.” 

Based on the company’s Indiana job creation plans, the Indiana Economic Development Corporation (IEDC) committed an investment in pāco manufacturing of up to $130,000 in the form of incentive-based tax credits. These tax credits are performance-based, meaning the company is eligible to claim incentives once Hoosiers are hired.   

“Indiana’s rich tradition of manufacturing excellence remains strong today thanks to the commitment of companies like pāco manufacturing,” said Ann Lathrop, chief strategy officer at the IEDC. “Indiana has a robust ecosystem of manufacturers statewide that are developing new innovations and supporting high-quality careers, investing alongside our state and communities to create a better future for Hoosiers.” 

Clarksville Town Manager Kevin Baity said “Clarksville is proud to welcome the expansion of pāco manufacturing to our community. With significant investment and the creation of new, high-paying jobs, pāco is not only contributing to our economy, but also enhancing Clarksville’s reputation as a hub for innovation and industry. We look forward to their continued success and are excited to support their growth in our community.” 

“We are delighted about the expansion of Precision Automation in Southern Indiana,” said One Southern Indiana CEO and President Lance Allison. “The move underscores the attractiveness of our business and economic development environment and the strong network we offer to companies looking to grow in the region.” 

About pāco manufacturing 
Since 1946, Precision Automation Company, Inc. and pāco manufacturing provides high quality Automation Systems, Contract Machine Work, Fabrication, Machinery, Controls, and related integration services that improve productivity in our customers’ manufacturing and product handling processes. As an ISO 9001:2015 Certified Company and business certified by ISNetworld, they are held to the highest standards of quality in their industry. It is their commitment to continuously improve performance and capabilities in order to maintain their competitive edge. 

About One Southern Indiana 
One Southern Indiana (1si) was formed in July of 2006 as the economic development organization and chamber of commerce serving Clark and Floyd counties. 1si’s mission is to help businesses innovate and thrive in the Southern Indiana / Louisville metro area via the three pillars of Business Resources, Economic Development, and Advocacy. For more information on One Southern Indiana, visit www.1si.org.  

Contact: 
pāco manufacturing 
Robert Daily | pāco manufacturing 
Bobd@pācomanufacturing.com | 812-283-7963 

One Southern Indiana 
Ellinor Smith | Content Marketing and Media Relations Manager 
EllinorS@1si.org | 217-320-4832 

### 

US Armed Forces contractor announces second major expansion in Southern Indiana 

by with No Comment 1si News1si Press ReleaseEconomic Development

Conco, Inc. Expanding their facility with $71 million investment in Scottsburg.  

Scottsburg, IN. (October 28, 2024) 

Southern Indiana is celebrating another expansion of Conco, a full-time, full-service supplier of ammunition containers and related services. The company plans to invest another $71.4 million to expand their Scottsburg location, adding 150,000 square feet to the existing facility to accommodate increased state-of-the art manufacturing, finishing, and storage capabilities. The expansion will also create an additional 175 full-time jobs with an hourly average wage of $30 per hour. This is in addition to the $54 million capital investment and 175 jobs announced in September 2023, bringing the total on-site employment to 350.  

Conco has served the United States Armed Forces as a full-time supplier since 1967. With a strong reputation for high-quality products, on-time delivery, and technical support, they continue to meet the military’s needs and develop innovative products to adapt to ever-changing requirements. Conco is also a designated “return site” equipped to store, de-militarize, and prepare container models for reuse and resale. Their specialized products include insensitive munitions, rectangular containers, square bell containers, and round bell containers, in addition to their refurbished ammunition container options.  

“The Conco team couldn’t be more excited about our continued growth in Southern Indiana,” said Karen Paschal, President and CEO of Conco. “As we increase our production goals, investing in our Scottsburg facility is the ideal solution and will position us to fulfill our duty as a mission-critical defense partner. We are honored to partner alongside the City of Scottsburg and the State of Indiana to create additional growth and opportunities for our region.” 

Based on the company’s job creation plans, the Indiana Economic Development Corporation (IEDC) has committed to an investment in Conco of up to $1.9 million in the form of performance-based tax credits. These tax credits are performance-based, meaning the company is eligible to claim incentives once Hoosiers are hired. In addition, the City of Scottsburg is offering the company personal and real property tax abatement, phasing in over five and ten years, respectively. 

Mayor Terry Amick of Scottsburg shares, “The expansion of Conco into Scottsburg represents a major milestone for our community. Their combined $125 million in capital investment and 350 local jobs will have a transformative impact on our local economy. We’re eager as a city to support Conco and to see the positive effects their presence will bring to our growing community.” 

“Indiana is playing a critical role in national security thanks to the commitment and collaboration of the state’s defense ecosystem,” said Ann Lathrop, chief strategy officer at the IEDC. “From our federal installations to innovators supporting the global supply chain to defense contractors like Conco, Indiana is keeping citizens safe while supporting continued economic growth. Conco’s latest expansion will bolster the state’s defense sector while creating quality career opportunities and bolstering new community growth in southern Indiana.” 

“Conco’s expansion in Southern Indiana is a significant win for our region and we are thrilled to support their continued growth,” said Lance Allison, President and CEO of One Southern Indiana. “Their investment and job creation in Scottsburg showcases the strength of our local economy and the opportunities that exist for businesses to thrive. Conco’s long-standing service to the United States Armed Forces, combined with their innovative approach, highlights the kind of forward-thinking companies we are proud to have in Southern Indiana.” 

About Conco, Inc. 
Conco is a designated “small business” with 50 years of experience dedicated to the ammunition container market and is ISO 9001:2015 certified. Conco is centrally located in Louisville, KY, and is currently the prime contract container supplier for several U.S. Army ammunition programs. For more information, visit concocontainers.com. If interested in a position at Conco, email resumes to resumes@concocontainers.com. 

About One Southern Indiana 
One Southern Indiana (1si) was formed in July of 2006 as the chamber of commerce and economic development organization, now serving Clark, Floyd, and Scott County. 1si’s mission is to help businesses innovate and thrive in the Southern Indiana / Louisville metro area via the three pillars of Business Resources, Economic Development and Advocacy. For more information on One Southern Indiana, visit www.1si.org. 

Contact: 
Conco, Inc. 
Karen Paschal | President & CEO 
kpaschal@concocontainers.com 

One Southern Indiana 
Ellinor Smith | Content Marketing and Media Relations Manager 
Ellinors@1si.org | 217-320-4832 

### 

Economic Update | The 10-Year Yield Moving Upward Again

by with No Comment Economic Development

submitted by
Uric Dufrene, Ph.D., Sanders Chair in Business, Indiana University Southeast

Ever since the Fed unexpectedly reduced rates by 50 basis points, the bond market for the 10-year Treasury moved in a different direction. Just prior to the September Federal Reserve meeting that produced the oversized and unnecessary reduction of ½%, the rate on the 10-year yield had hit a recent low of 3.66%. The Fed announcement came on September 18th, and two days after, rates on the 10- year yield had climbed to 3.73%.  Since then, rates have moved in an upward direction, with the most recent at 4.08%.    

If we dissect the components of the 10-year Treasury, it is impacted by two primary drivers.  One is anticipated growth in the economy, and the other is expected inflation.   If the market perceives that growth is going to slow down, then we would expect the 10-Year yield to decline. As investors perceive slower growth, they might find bonds to be more attractive than equities, increasing demand for Treasuries, and thereby increasing the price.  Bond prices and interest rates are inversely related.  So, an increase in demand for bonds will push interest rates down.  So, when investors anticipate slower growth, we can expect the 10-year yield to decline. On the contrary, higher anticipated growth will push bond yields higher, as investors move to equities and push bond prices lower and yields higher. An example of higher growth came in the last retail sales report that showed better than anticipated retail sales, and as a result, GDP estimates were revised upward.   

The other component to the 10-year yield is anticipated inflation, and bondholders expect to be compensated for inflation.  Otherwise, bonds lose out to inflation and the result is reduced purchasing power in subsequent years.    Since the Fed announced the reduction in rates, expected inflation, as measured by the difference between 5-year Treasury Inflation Protected Securities (TIPS) and 5-year bonds, increased from 1.98% to 2.23%. Since the oversized reduction by the Fed, the inflation narrative is beginning to resurrect from just a few weeks ago. Expected inflation has moved up, and actual inflation, as measured by the last Consumer Price Index (CPI), came in higher than expected.   As we cited a few weeks ago in Economic Update, the Fed may be approaching a pause on rate reductions, or certainly rate reductions that will be less aggressive. The Fed Watch Tool is showing probabilities that favor four consecutive reductions of 25 basis points each. As we go through the next several months, we’ll likely see the odds revised and the number of cuts reduced.   

The implications of higher 10-year Treasury yields will be felt across several fronts. One is higher mortgage rates. Since the last Fed rate reduction, mortgage rates have moved from 6.14% to 6.52%.  Rates on auto loans and credit cards will also move higher, compounding some of the complications faced in the auto sector and consumer financing.   

Even with higher mortgage rates, homeowners have been tapping into home equity, helping fuel consumer spending. Home values have increased significantly since the pandemic, increasing the net worth of existing homeowners. Higher home values have increased homeowner’s equity, and homeowners are taking advantage of this increased equity through a resurgence in home equity loans. From 2008 to 2021, home equity loans saw consistent declines in volume. Since 2021 however, home equity financing has been on the upswing. Tapping into home equity lines of credit will support additional growth overall. 

To sum up, the 10-year is increasing once again, reflecting a combination of higher growth and inflation. The combination of both will force the Fed to step on the brakes again, and the result will be fewer rate reductions.