Jeffersonville Steel Processing Company Chooses Ports of Indiana-Jeffersonville for Major Expansion

by with No Comment 1si News1si Press ReleaseEconomic Development

voestalpine Roll Forming Corporation significantly grows Jeffersonville operations

Jeffersonville, IN. (Aug. 19, 2024)

voestalpine Roll Forming Corporation (RFC) will move forward on a major expansion of its Jeffersonville operations. The expansion includes a new production line for frame rails for several major global customers, including over $77,900,000 in construction, equipment, and other related services. The expansion will also include over 100 new jobs that will meet or exceed the Clark County average wage.

voestalpine RFC, a supplier of roll formed metal, services several different industries, including aerospace, construction, material handling, off-highway, office furniture, solar, and transportation, is wholly owned by voestalpine AG, a globally leading steel and technology group operating in over 50 countries.

“This next chapter of growth for RFC would not be possible without the support from state and local leaders. We look forward to expanding our business operations with this transformative project adding long-term infrastructure, employment opportunities and overall value to the Jeffersonville community for years to come,” said Kevin Dierking, President & CEO, voestalpine Roll Forming Corporation.

“Indiana has a rich tradition of manufacturing and delivering high quality materials that power the world around us thanks to commitment of companies like voestalpine,” said IEDC Chief Strategy Officer Ann Lathrop. “The company’s continued growth and industry partnership in Southern Indiana will help advance critical industries, from aerospace to energy to infrastructure and transportation, while supporting job growth and community development in Jeffersonville and the surrounding region.”

“We are thrilled voestalpine RFC continues to find success in Jeffersonville and has officially decided to significantly grow operations at their Ports of Indiana-Jeffersonville location, adding over 100 new jobs, all of which are at or above the county average wage,” said Mayor Mike Moore. “The City of Jeffersonville’s continued focus on quality of place, complimented with a competitive business environment, has set the stage for this continued momentum and long-term community impact.”

“Our team is very pleased that voestalpine RFC has chosen Ports of Indiana-Jeffersonville for its new operations,” said Ports of Indiana CEO Jody Peacock. “voestalpine RFC is a forward-thinking leader in producing specialized roll-formed metal for vital sectors like aerospace, construction, solar energy, and transportation. Establishing the new facility adjacent to their current operations allows voestalpine to capitalize on the port’s multimodal connections, comprehensive logistics services and operational synergies, thereby strengthening their competitive edge.”

“Voestalpine has operated in this region for years, and when a customer of ours chooses to expand here, it’s a win for Hoosiers,” said Duke Energy Indiana President Stan Pinegar. “We are glad to work with them to help make this possible. This will bring both capital investment and jobs—both permanent and construction—to the community.”

“One Southern Indiana welcomes this announcement from RFC and celebrates another win for our growing community,” said One Southern Indiana CEO and President Lance Allison. “This announcement offers our residents and industry a growing opportunity and is yet another indicator of our regional strength and capacity to support global industry leaders such as RFC.”

Based on the company’s job creation plans, the Indiana Economic Development Corporation (IEDC) will commit an investment in voestalpine Roll Forming Corporation of up to $2 million in the form of incentive-based tax credits and up to $2 million in Hoosier Business Investment tax credits. These tax credits are performance-based, meaning the company is eligible to claim incentives once Hoosiers are hired.

About voestalpine Roll Forming Corporation

voestalpine Roll Forming Corporation supplies custom roll formed metal components into several industries including Aerospace, Construction, Material Handling, Off-Highway, Office Furniture, Solar and Transportation.

In 2000, Roll Forming Corporation was acquired by globally leading steel and technology group voestalpine AG joining the Metal Forming, Tubes and Sections division. In 2001, voestalpine Roll Forming Corporation became a corporate partner to the state of Indiana by adding a manufacturing facility in Jeffersonville, Indiana.

Today, voestalpine Roll Forming Corporation has seven production facilities across three states with five facilities and headquarters located in Shelby County, Kentucky and one facility each in Pennsylvania and Indiana.

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 a self-funded enterprise 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. Web: www.portsofindiana.com

About Duke Energy

Duke Energy Indiana, a subsidiary of Duke Energy, provides about 6,300 megawatts of owned electric capacity to approximately 900,000 customers in a 23,000-square-mile service area, making it Indiana’s largest electric supplier.

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. Web: www.1si.org

Contact:
voestalpine AG
mediarelations@voestalpine.com

One Southern Indiana
Brittany Schmidt, Manager of Programs, Events, and Groups
BrittanyS@1si.org   
812-945-0266

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Economic Update: Fed Inaction Leads to Market Overreaction

by with No Comment 1si NewsEconomic Development

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

A few weeks ago, the Economic Update suggested that there was an outside chance for the first Federal Reserve cut to come in July, but more than likely we would see the first cut in September. After the last batch of key economic releases, the FedWatch Tool is now pricing, with 100% odds that the first cut will come in September. We predicted that cuts would then come again in November and December. Current probabilities are now pointing to cuts in November and December. Will the economy see a recession in 2024, or will it simply hit an expected soft patch? 

The odds of a September rate cut quickly changed with the release of the July employment report, coming in weaker than expected. The BLS reported that the nation’s economy added 114,000 jobs, far less than the expected level of 175,000. The unemployment rate increased from 4.1% to 4.3%. While the report showed that the labor market is weakening, as we have been expecting, the stock market reaction was probably an overreaction. Payroll growth slowed, but not far under what we would expect as normal job growth. The unemployment rate did notch upward, but a closer look suggests that the increase may not persist.     The number of unemployed increased by 352,000, and of this amount, 249,000 were on temporary layoffs. Without the large increase in temporary layoffs, the unemployment rate would have remained unchanged at 4.1%. 

One dynamic of the labor market over the past year has been the divergence between employment from the household survey and payrolls from the establishment survey. Employment from the household survey increased about 1.3 million (.8%) since last year, with some months showing declines. The establishment survey showed payroll growth at 2.4 million (1.5%), a difference of approximately 1 million. Historically, a divergence between these two series is usually followed by convergence. In the current state,  convergence would require either a slowdown in payrolls or an acceleration in employment. Last week’s report produced a slowdown in payrolls, perhaps the start of slower growth from the establishment survey. The report also showed a decline in weekly hours worked, and a small gain in average hourly wages.    

Following the report, expectations for a Fed cut in rates spiked. The FedWatch Tool is currently showing an almost even split between a reduction of a quarter or half a percent. Unless we get a much weaker payroll report for August, along with very soft inflation reports, the likely cut in September will be ¼% of a point.     

Equity markets sold off with the release of the July employment report, and the signal of a slowing economy. Then came Monday, with the Dow dropping more than 1,000 points. Markets were somewhat relieved and cut losses after the release of the ISM Services report, pointing to expansion in the service economy.   

More encouraging news came later in the week,  with the release of new claims for unemployment.  For the past several weeks, claims had been trending upward, an  indicator of a slower economy. Markets were surprised when claims came in below what was expected and surged as a result.   

The market turbulence last week was a combination of Fed inaction and market overreaction. With CPI less food, energy, and shelter rate running under 2%, a justification could have been made for the first cut in July. Market overreaction came in response to the national employment report on Friday, followed by Monday’s Yen carry trade-related sell-offs.  

The softening of payrolls brought a significant decline in the 10-year Treasury yield, a precursor to lower mortgage rates. 30-year mortgage rates have come down to 6.5%, and this will bring about a boost to the supply of homes, thus applying headwinds to shelter costs.  One reason for the current limited supply of homes has been the “lock-in” effect from homeowners with sub-4% mortgages. A reduction in rates will boost supply, as homeowners exercise options to either scale up or down in home ownership preferences.    

We are not ready to declare a recession just yet. While the labor market will continue to soften, this is also a matter of normalization of the macro-economy. Payroll changes averaged 251,000 a month in 2023, and that is still too high. Unemployment claims have risen from earlier levels but remain low compared to historical levels. Job openings have declined but still at levels that exceed the number of unemployed. Recession territory would need to see the opposite. Negative year-over-year changes in industrial production usually correspond to a recession, but for the last two months, the change in industrial production has turned positive, a reversal from the first quarter. The economy has not escaped a recession just yet. Keys to watch in the coming weeks will be the labor market and consumer spending. If both weaken considerably, recession calls will increase in intensity.  

Expansion on the Horizon: Jeffersonville Steel Processing Company Considers Growth at Ports of Indiana-Jeffersonville 

by with No Comment 1si News1si Press ReleaseEconomic Development

voestalpine Roll Forming Corporation looking to potentially expand Jeffersonville operations. 

Jeffersonville, IN. (Aug. 5, 2024) 

voestalpine Roll Forming Corporation (RFC) is considering a major expansion of their Jeffersonville operations. If Jeffersonville is chosen, the expansion would result in a new production line for frame rails for several major global customers, and would include over $77,900,000 in construction, equipment, and other related services. The expansion would include over 100 new jobs that will meet or exceed the Clark County average wage. 

voestalpine RFC, a supplier of roll formed metal, services several different industries, including aerospace, construction, material handling, off-highway, office furniture, solar, and transportation, is wholly owned by voestalpine AG, a globally leading steel and technology group operating in over 50 countries. 

Several locations are under consideration for the company’s expansion project. As part of its decision-making process, the company is requesting support from the City of Jeffersonville with a final location decision determined and communicated by voestalpine AG on August 19, 2024. Duke Energy has also offered additional incentives. 

“As we look to further develop new markets and grow our business to meet our customer’s needs, we want to thank the Indiana Economic Development Corporation, Duke Energy Indiana, Clark County, One Southern Indiana, Jeffersonville Redevelopment Commission, and the City of Jeffersonville for the support in evaluating where the next chapter of growth will reside for voestalpine Roll Forming Corporation. The cooperation with state and local leaders is a key consideration for us,” said CFO of voestalpine Roll Forming Corporation, Brad Lacy. “It is important to note that we still have a decision to make on an ideal location for our investment for all stakeholders including employees, customers and the communities in which we operate. We will finalize this decision the week of August 12 in partnership with our executive team and an official press release will follow the week of Monday, August 19 from voestalpine AG.” 

“We are thrilled voestalpine RFC continues to find success in Jeffersonville and are now under final consideration to significantly grow their operations at their Ports of Indiana-Jeffersonville location,” said Mayor Mike Moore. “This expansion is yet another reflection of the vibrant economic environment we have fostered over the years, now affording us this opportunity to bring over 100 new high-wage jobs to the community, all of which are above the Clark County average wage.” 

“Ports of Indiana is delighted voestalpine RFC is considering the Jeffersonville port for this critical expansion,” said Ports of Indiana Chief Executive Officer Jody Peacock. “This is a visionary company that provides specialized roll formed metal for key industries, including aerospace, construction, solar, and transportation. By locating next to its existing facility, it can further enhance its competitive advantage by leveraging the port’s multimodal connections, logistics services, foreign-trade zone and operational synergies within the port’s steel campus.” 

“Voestalpine has operated in this region for years, and when a customer of ours considers expanding here, it is a win for Hoosiers,” said Duke Energy Indiana President Stan Pinegar. “We are glad to work with them to help make this possible. This would bring both capital investment and jobs—both permanent and construction—to this community.” 

“We are delighted about the potential expansion of voestalpine RFC in Southern Indiana,” said CEO and President of One Southern Indiana, Lance Allison. “This 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 voestalpine Roll Forming Corporation 

voestalpine Roll Forming Corporation supplies custom roll formed metal components into several industries including Aerospace, Construction, Material Handling, Off-Highway, Office Furniture, Solar and Transportation. 

In 2000, Roll Forming Corporation was acquired by globally leading steel and technology group voestalpine AG joining the Metal Forming, Tubes and Sections division. In 2001, voestalpine Roll Forming Corporation became a corporate partner to the state of Indiana by adding a manufacturing facility in Jeffersonville, Indiana. 

Today, voestalpine Roll Forming Corporation has seven production facilities across three states with five facilities and headquarters located in Shelby County, Kentucky and one facility each in Pennsylvania and Indiana. 

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 a self-funded enterprise 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. Web:  www.portsofindiana.com

About Duke Energy 

Duke Energy Indiana, a subsidiary of Duke Energy, provides about 6,300 megawatts of owned electric capacity to approximately 900,000 customers in a 23,000-square-mile service area, making it Indiana’s largest electric supplier. 

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: 
voestalpine AG  
mediarelations@voestalpine.com 

One Southern Indiana 
Brittany Schmidt, Manager of Programs, Events, and Groups 
BrittanyS@1si.org  
812-945-0266 

 

### 

Economic Update | Consumer Preferences of Services Over Goods

by with No Comment 1si NewsEconomic Development

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

The consumer is responsible for almost 70% of the U.S. economy and has been one of the biggest surprises of the post-pandemic economy. Last year, we wrote about the resilience of the consumer, in the face of high inflation, and most recently about a potential pullback of the consumer in 2024.     Any economic slowdown will either be led by the consumer or adversely impact the consumer.  The ideal slowdown for the Fed is one that does not derail the consumer altogether, or significantly trip up the labor market.  Accomplishing this would fit the soft-landing scenario. 

Last week, we learned that the economy accelerated in the second quarter, growing by 2.8% compared to 1.4% in the first quarter. The largest contribution to this acceleration in GDP was once again, the consumer. The consumer contributions of services spending to GDP growth exceeded goods by almost twice the level.  On the goods side, durable goods were the greatest contribution, primarily through auto sales.  On the services side, healthcare spending dominated and was the leading contributor to growth. 

While this news was encouraging, we also must remember that the GDP report is backward-looking. GDP does not reflect current economic conditions, or even the near term ahead.   It is a picture of the economy in the rear-view mirror. Even so, the report still came as another surprise, built on the resilience of the consumer. 

Our last consumer-related column did raise the possibility of an overall pullback of the consumer. Despite the positive GDP report, this is still in the cards.   Goods are cold, and some services remain hot. A slowing consumer will provide additional validation that a cut is now warranted.  Recent reports show that inflation continues to head in the direction that will support a cut in interest rates, now most likely in September.    

High interest rates have had a noticeable impact on durable goods, longer-lasting items that often require financing.  Take automobiles, for example.  Domestic auto unit sales last month were at 1.96 million (seasonally adjusted annual rate).   Just prior to the pandemic, domestic auto unit sales were running just over 3 million.    This pre-pandemic level of 3 million was also a bottom compared to ten years ago when domestic unit sales were close to 6 million.  During the Great Recession, when household finances were devastated from both a housing crash and elevated unemployment rates, domestic unit auto sales hit a bottom of 2.8 million. The current level of new auto sales is at a historic low, and lower than the depths of even the Great Recession. However, foot traffic data by Placer.ai show that visits to car dealerships are about flat compared to last year, but now moving above trend for this time of the year.  Incentives and lower rates may be having an impact and luring buyers back.  Auto sales should see some appreciation from here.

One durable good important to Indiana is the RV, with Indiana holding the place as the largest RV  manufacturing state.  RV purchases are also sensitive to interest rates, and we can see the impact of higher rates on RV shipments coming out of RV manufacturers. During June, RV shipments hit 25,000, and this was up slightly from 2023.    Back in June 2021, RV shipments were double, hitting levels of 50,000 in a month.   Employers rushed to hire more people to keep up with demand. Since then, Indiana’s employment in transportation equipment manufacturing, which includes RV manufacturing, is down by about 10,000. A review of foot traffic of random RV retail establishments across Indiana shows a noticeable decline in customer visits, declining by an average of 19%  from a year ago.  

Retail sales for furniture, furnishings, household equipment, electronics, and appliances are down since the beginning of 2023, and down about 10% compared to the surge of 2021. Government stimulus and mortgage rates below 3% drove significant demand, but higher interest rates have softened sales since. Foot traffic for furniture and home furnishings is down about 10% across Indiana compared to the prior year. Electronic store visits are only down 5%, but this is 25% below the baseline trend.

While interest-sensitive industries have experienced challenges, others, specifically food and drinking establishments, are at an all-time high. Retail sales are expressed in nominal terms, which means that some revenue gains will be due to inflation. Since the start of 2022, food and drinking establishments sales are up about 30%, while overall price levels by 10%. While there is variability within the industry, some of these gains in food and drinking establishments are real increases when compared to early 2022.  Sales are also up by about 4.5% since last year,  higher than the current inflation rate.   As a comparison, food and drinking establishment sales were flat during the Great Recession and it took 7 years to realize the same percentage change in industry sales since 2020.   Challenges do remain, such as labor and food costs, but having enough customers is not the primary concern. Following the pandemic, consumers have gravitated toward valuing experiences over goods, and food and drinking sales are reflective of this.

With inflation now heading in the right direction, the other piece to the soft landing lies in the labor market.   Payroll growth remains strong, but signs continue to emerge of a softening labor market.  Unemployment claims have been edging upward, and continuing claims are the highest since late 2021.   The unemployment rate has been inching upward, exceeding an increase of ½% in some locales. Average hourly wage growth is now under 4%, compared to 5% last year, and almost 7% two years ago.  The July employment report is expected to show additional cooling, and that should be the final validation for a September rate cut, along with increasing headwinds for consumers.  

Economic Update | National Manufacturing Impact on Regional Payrolls – And Rate Cuts are on the Horizon

by with No Comment 1si NewsEconomic Development

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

Coming out of the pandemic, the Indiana and Kentucky economies fared quite well. Kentucky was one of the leading states with respect to job creation, and Indiana consistently saw unemployment rates that were under the national average. As the national economy continues to move toward a softening, along with the ongoing manufacturing slump, we examine the impact of manufacturing job growth across Indiana and Kentucky.   

First, both states have a heavy concentration of manufacturing jobs, and any changes in the macroeconomy will be felt locally. Nationally, manufacturing has been experiencing slower growth, and some have even described it as a manufacturing recession. The ISM Index, a measure used to show growth or contraction in manufacturing, has been under 50 since November 2022, except for one month, March 2024.  A reading under 50 signifies contraction and over 50 expansions. With a slower manufacturing environment, orders are being fulfilled, unlike the supply chain-challenged days of the pandemic. The ISM backlog orders index, for example, has been trending down for all of 2024, signaling that manufacturers are having less difficulty fulfilling orders. Industrial production, a measure of the nation’s manufacturing activity, moved into negative territory last June and has hovered around negative to slightly positive since. Durable goods orders, a leading indicator of future economic activity, have been trending downward for all of 2024. Orders plummeted last month and are now at negative year-over-year changes. The sluggishness in orders does not portend vigorous manufacturing activity ahead.  A declining interest rate environment will work to reverse this trend, but the impact will not be immediate.   

We can see the impact of the national manufacturing slowdown on payrolls across Indiana and Kentucky, as well as the region. The manufacturing employment concentration in Indiana is greater than two, which implies that the proportion of workers employed in manufacturing is twice the national average. In Kentucky, while higher than the national average, the employment concentration in Kentucky manufacturing is 1.5, which implies that the proportion of workers employed in manufacturing is 150% higher than the national average.   Thus, we expect any national slowing in manufacturing will have a greater impact on Indiana versus Kentucky. 

Indiana manufacturing jobs peaked in August 2022, at 544,000.  Since then, manufacturing payrolls have been on a steady decline, with the latest count at 531,000. This puts manufacturing employment down almost 15,000 jobs over the past 18 months, while overall job growth is up 71,000 over that same period. The metro areas of Elkhart-Goshen, Columbus, and Muncie are experiencing a negative change in payroll growth, with Bloomington and Terre Haute hovering just above 0, basically flat. The decline is not as significant in Kentucky, but the state has less than ½ of the manufacturing jobs of Indiana. Since August 2022, Kentucky has been seeing a small gain in manufacturing, compared to the loss of 15,000 in Indiana.  However, since peaking in October 2023, manufacturing payrolls are now down almost 3,000 in Kentucky. All metro areas in Kentucky are seeing positive job growth, with Owensboro and Louisville Metro seeing growth of less than 1%.     

To be sure, job growth across both states continues to expand, but at slower rates.  Indiana payroll growth has slowed to 1.4%, year-over-year, compared to 2% in early 2023. Kentucky growth has slowed to 1.3% year over year, compared to more than 3% in early 2023.  While manufacturing does not employ the numbers from twenty years ago, both states continue to employ a greater percentage of workers compared to nationally.  Consequently, the national manufacturing slowdown will also have an impact on regional payroll growth. Louisville area manufacturing is down close to 2,000 payrolls over the year, and Southern Indiana saw negative manufacturing job growth for the final three quarters in 2023.  We can also see the overall softening with higher unemployment rates in both states:   4.6% (compared to 4.1% last year) in Kentucky and 3.7% (compared to 3.3% last year) in Indiana. 

The leading contributor to job growth for both Indiana and Kentucky has been healthcare. Over the year, Indiana and Kentucky gained 15,000 and 14,000 healthcare jobs respectively.  In the past two years, these amounts have doubled. Over the past year, health care is responsible for ½ of the job growth in Kentucky and around a third in Indiana. 

In our last column, we suggested that the Fed would likely cut interest rates in September, with an outside chance of one happening in July.   The CPI report was released last week, and it showed inflation came in weaker than expected, declining by .10% over the month. The super core CPI, which strips away food, energy, and shelter, was under 2%.    So, the Fed did receive the CPI print to justify a September cut.  The missing piece for a July cut was on the labor side. The last employment report did show some labor market softening, with another uptick in the unemployment rate. Overall payroll growth was still strong, however, rising by another 206,000. Probabilities are now showing the first cut for September. As the labor market continues to soften, and assuming the disinflation trend, we should see three rate reductions for the rest of the year.   

Economic Update | First Interest Rate Cut Coming in September, or Maybe July

by with No Comment 1si NewsEconomic Development

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

After a rocky start to the year, inflation appears to be heading in a downward trend again. After peaking during the middle of 2022, inflation then began a steady ride down. Supply chain issues, one of the causes of the inflationary spike, were being resolved, and this showed up as disinflation in big ticket items such as cars and trucks. As 2023 came to an end, inflation continued to move in a favorable direction, and the Fed opened the door to cuts during 2024.  At the start of the year, the Fed indicated that the economy could expect three cuts to the Federal Funds rate. The market was even more optimistic as it was expecting six cuts across 2024. Disinflation saw gains in consumer indicators like consumer sentiment, rising from a 50-plus-year low.    

Then as 2024 began, inflation was proving to be stickier. The first quarter saw inflation coming in higher than expected, leading the Fed and market to back off the number of anticipated interest rate cuts for this year. Six expected cuts by market participants declined to two, and the Fed signaled a decline from three to one cut for 2024.   

The past couple of months have produced inflation reports that were more favorable for pending interest rate cuts. Inflation was weaker than expected, and odds are now favoring the first cut to occur in September. With a labor market that continues to show some signs of softening, additional weak readings in inflation could eventually result in three rate reductions this year, higher than what current market participants are expecting. 

Declining inflation matters to consumers because of the impact on prices paid. Consumers also feel the sting of inflation with higher interest rates, from credit cards to car loans and mortgages. The barometer rate to watch here is the 10-year Treasury yield, a key determinant of interest rates paid by consumers, and strongly influenced by expected inflation. As inflation falls, interest rates on the 10-year yield will follow.  This means lower interest rates for consumers, particularly mortgage rates. Back in October 2023, the 10-year yield almost crossed the 5% threshold, peaking at 4.92%. Mortgage rates almost surpassed 8%, stopping at 7.9%.  With the most recent slide in the 10-year yield, mortgage rates have also declined, now just under 7%. 

So, what happens to inflation will have a lot to say about Federal Reserve actions on interest rate reductions and the 10-year yield.  The Fed will see another employment report and CPI before the next July meeting.  If inflation comes in weaker than expected, look for the first cut in September.  If we get a weak employment report, with either a weak payroll number or a noticeable uptick in the unemployment rate, look for the odds of a July cut to increase. If we see no Fed action in July,  two to three cuts are likely for the rest of the year.  The combination of a softening labor market, weaker consumer spending, and inflation that approaches the preferred 2% rate will provide the go-ahead for the Fed to begin easing.  The presence of the November election puts the first cut in either July (currently low probability) or September.  This provides an option for subsequent cuts or another pause.  Waiting until November throws politics into the mix, and this is what the Fed will want to avoid. Expect a first cut in either July or September.

Global Communications Company Signals Expansion to Meet Growing Demands

by with No Comment 1si News1si Press ReleaseEconomic Development

Communications Test Design, Inc., is expanding their global operations with a new location in Charlestown.   

Charlestown, IN. (June 20, 2024) 

Communications Test Design, Inc. (CTDI) is expanding into Charlestown, IN! The global company will open a new location at 1651 Penny Martin Lane, within River Ridge Commerce Center, in response to a growing customer base.  

CTDI is a global leader in engineering, repair and logistics services that provides solutions to the communications industry.  Customers of CTDI include major telecommunication carriers, cable service providers, and OEMs worldwide. CTDI has two business units: Networks & Cable and Mobility & Consumer Electronics. This new location, within the River Ridge Commerce Center, is expected to bring over 600 new jobs to the region.  

“Southern Indiana is the perfect location for CTDI to find continued success,” said General Manager of Real Estate Toby Booker. “The surrounding areas have proven to be a great area for technology companies, and we look forward to building our workforce with steady, good paying positions. We invite all interested applicants to visit www.ctdi.com to learn more.” 

Based on the company’s job creation plans, the Indiana Economic Development Corporation (IEDC) committed an investment in CTDI of up to $4.75 million 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 economic momentum continues to build as companies like CTDI commit to growing and creating new jobs statewide,” said Ann Lathrop, chief strategy officer at the IEDC. “In today’s climate, speed is the new incentive, and mega sites like the River Ridge Commerce Center make investing easy, helping companies get up and running quickly. In addition to creating hundreds of new Hoosier jobs, CTDI’s expansion will accelerate further economic growth and community development in Charlestown and the surrounding southern Indiana region for years to come.” 

“Charlestown celebrates CTDI’s continued success and growth in the community,” said Charlestown Mayor Treva Hodges. “Adding yet another global leader in our backyard only affirms the significant value our residents and community investments offer to companies looking to locate and expand operations in Southern Indiana.” 

“We are excited for CTDI’s continued growth at River Ridge, and their commitment to the Southern Indiana region,” said River Ridge Development Authority Executive Director Jerry Acy. “CTDI‘s expansion further demonstrates the competitive advantages companies gain by doing business at River Ridge and highlights Southern Indiana’s growing reputation as the place to be within the tech community.” 

“Communications and related infrastructure and capacity will continue to be critical to our economy, and having a global communications leader in Southern Indiana is very exciting,” said Lance Allison, president and CEO of One Southern Indiana. “Additionally, CTDI’s commitment to the community and local economy will have returns to our community for years to come.” 

About CTDI 

Founded in 1975, CTDI is a full-service, global engineering, repair and logistics company that provides best-cost solutions to the communications industry. CTDI provides a dynamic business model to global customers that is comprised of two business units (Networks & Cable and Mobility & Consumer Electronics) and nine divisions: Carrier Networks, Cable & Business, MSO Video & Broadband, OEMs, Product Supply, Carrier Mobility, ACE, MPS iOS and MPS Android. CTDI’s customers include the major telecom carriers, cable service providers, and major OEMs from around the world. Our corporate headquarters are in West Chester, PA, and we support an expanding customer base with over 20,000 associates in over 100 facilities worldwide. 

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: 

Communications Test Design, Inc. (CTDI) 
Armena Ballard 
armena.ballard@ctdi.com 
610-772-6183 

One Southern Indiana 
Brittany Schmidt, Manager of Programs, Events, and Groups 
BrittanyS@1si.org  
812-945-0266 

 

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Economic Update | Will Consumers Finally Tap on the Brakes?

by with No Comment 1si NewsEconomic Development

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

Consumer spending on goods and services makes up more than 2/3rds of the nation’s economy. Healthy consumer spending drives the economy, and weaker spending can lead to slowdowns or even a recession. Coming out of the pandemic, the consumer emerged as strong as ever, initially spending high on goods and then moving on to services. However, the most recent report on consumer spending showed that spending cooled unexpectedly. Is this the beginning of a pullback from the consumer, leading to slower growth for the rest of the year?    

One irony, and there have been many during the past couple of years, is that consumer moods were quite dismal, but consumer spending remained elevated. Consumer surveys, like the Conference Board’s Consumer Confidence Index or the University of Michigan Consumer Sentiment,  have been at record lows. But even with low levels of consumer sentiment, consumer spending continued to be solid. Forty-year high inflation, along with higher interest rates, were the primary drivers of this negative consumer sentiment, with recent levels being the lowest in 50 years. As inflation began to decelerate, consumer sentiment resumed a jagged edge climb, up until last month, when consumer sentiment plunged almost 10 points. Consumer confidence, which is more reflective of labor market views, has not seen the depths of consumer sentiment, but over the past year, it has moved sideways. 

Along with subdued measures of consumer sentiment, consumers are beginning to show some signs of stress and changes in behavior. Credit card delinquencies have been rising since the end of 2021 and are now at the highest level since late 2011. Non-business bankruptcy filings are the highest since the 3rd quarter of 2020 when the economy saw a jump in pandemic-induced bankruptcies. 

While the inflation rate has come down compared to 2022, it remains elevated and above the preferred 2% Fed goal.   And while the inflation rate is lower now than a year ago, the price index itself is about 20% higher than two years ago, which means that prices remain higher.

All this is beginning to show up with changes in consumer behavior. An examination of foot traffic, based on Placer.ai data, shows that discount and dollar stores foot traffic across the Louisville Metro region is up 17% compared to last year.  Consumers are seeking bargains to combat higher prices. Foot traffic at restaurants, which rely more on consumer discretionary spending, is down 10%.  Furniture and home furnishings foot traffic is down 10% from last year. Attractions, which include cinemas and similar entertainment venues, are down 31% in foot traffic. 

Can we derive clues on the national economy from local trends?  After all, tourism, transportation and warehousing, and manufacturing are all key sectors for the region and might also convey signals about the national economy.  Across the five Southern Indiana counties that make up the Louisville Metro area, the latest data show that job growth cooled in the second half of 2023. In the first half of 2023, the five counties added 2,600 jobs per quarter, and growth slowed to an average of just over 700 jobs per quarter in the second half of the year. Both manufacturing and administrative and support and waste management and remediation services (primarily temporary labor services) shed jobs in the second half of 2023. Both industries are bellwethers for subsequent growth. Accommodation and food services, one measure reflective of consumer discretionary spending, saw a reduction in payrolls.

For the entire metro area, job growth has also slowed for the start of 2024.  The most recent data show that the year-over-year change in jobs, on a percentage basis, is the slowest since 2010, excluding the job losses that occurred with Covid. Manufacturing, retail, financial and professional and business services are seeing a reduction in jobs, and leisure and hospitality have also slowed.

Signs are beginning to emerge that consumers may finally be taking a break. This may be welcome news to the Fed, but elevated inflation will make it difficult to lower interest rates anytime soon.

Leading Active Nutrition Company Expanding Operations to Southern Indiana

by with No Comment 1si Press ReleaseEconomic Development

1440 Foods to hire nearly 200, invest more than $60,000,000 at new Jeffersonville production facility.

Jeffersonville, IN (May 16, 2024)

1440 Foods, a leading portfolio of active nutrition brands, is bringing its main manufacturing operations to Jeffersonville, Indiana, along with nearly 200 jobs and new investment to the region.

The group will move into 301 Salem Road, in River Ridge Commerce Center, which formerly hosted Enjoy Life Foods. 1440 Foods will invest more than $60,000,000 into the building, including improvements to the existing structure and new machinery and equipment to make it a state-of-the-art facility for developing and manufacturing their products. 1440 Foods has committed to a long-term lease of the River Ridge property and plans to maintain a consistent presence in the community.

The facility is expected to begin production in 2025. A groundbreaking event is scheduled for Wednesday, May 22, at 3:30 p.m. EST.

Jointly owned by 4×4 Capital and Bain Capital Private Equity, 1440 Foods exists to provide people energy to unleash their potential through its innovative portfolio of healthy foods and supplements that are designed to support muscle development, recovery, and overall wellness goals.  1440’s portfolio combines powerful and complementary growth brands, including:

  • Pure Protein, a leading lifestyle nutrition line known for its bestselling portfolio of bars, ready-to-drink beverages, powders, and savory snacks; 
  • MET-Rx, a sports nutrition brand with over three decades of unwavering commitment to offering delicious meal replacement products which fuel workouts and optimize performance;
  • Body Fortress, a leading performance protein powder brand trusted by disciplined fitness enthusiasts to strengthen their bodies both physically and mentally.

“The opening of the Jeffersonville location is a significant milestone in our plan to make protein-rich snacking options accessible to as many people as possible,” said Alexandre Médicis, Chairman of the Board for 1440 Foods. “We considered several locations but found that Jeffersonville was perfect due to its proximity to major transportation channels and availability of a skilled and ready workforce. We look forward to becoming part of the Jeffersonville community, and we’re eager to expand our fantastic team in the coming months.”

Based on the company’s job creation and investment plans, the Indiana Economic Development Corporation (IEDC) committed an investment in 1440 Foods of up to $3.7 million in the form of incentive-based tax credits, up to $500,000 in training grants, and up to $200,000 in Manufacturing Readiness Grants. These tax credits are performance-based, meaning the company is eligible to claim incentives once area residents are hired.

1440 Foods has already begun hiring for leadership and administrative roles for the facility. Hiring for various production roles, including team leads, material handlers, packers, line operators, and other positions will begin later this year. Available jobs are posted on the company’s website, 1440Foods.com.  The facility will offer competitive benefits and wages, with all employees eligible to participate in the company’s annual bonus program. Wages will range from $18.50 to $33 an hour depending on position, skill, and experience.

“Indiana is the ideal destination for manufacturers and solution providers like 1440 Foods that need to quickly and efficiently reach customers across the country,” said Ann Lathrop, chief strategy officer at the IEDC. “Here in southern Indiana, 1440 Foods will find the pro-growth business climate, skilled talent and engaged business community needed to grow and be successful.”

“The City of Jeffersonville is excited that 1440 Foods has chosen the River Ridge Commerce Center as the location for their newest state-of-art manufacturing facility,” said Jeffersonville Mayor Mike Moore. “This significant investment is a great addition to our growing network of food and beverage industry partners, and we are confident they will find long-term success by employing 200 local residents at an average hourly wage of $33.”

“River Ridge welcomes 1440 Foods to our region,” said Executive Director of River Ridge Development Authority, Jerry Acy. “We are excited to see the investment that 1440 Foods will make in an existing industrial building and are pleased to have another industry leader within River Ridge.” 

“America Place is delighted to have 1440 Foods as part of our real estate area,” said CEO Jim Karp. “We are proud the improvements of our building captured the attention of such a great company as 1440 Foods and wish them continued success in their newest facility.”

“1si is thrilled to grow our robust ecosystem within the food and beverage industry with 1440 Foods,” said CEO and President of One Southern Indiana, Lance Allison. “They will be a great partner to have in the area and we look forward to supporting this new facility’s success in Southern Indiana.” 

About 1440 Foods

1440 Foods is a sports and active nutrition company on a mission to energize people to unleash their potential with a focused portfolio of accessible, great-tasting health and wellness brands: Pure Protein® nutrition bars; Body Fortress® high efficacy protein powders; and MET-Rx® high-performance meal replacements. 1440 Foods brands can be purchased online at Amazon, or at a wide range of grocery, pharmacy, and convenience store chains nationwide such as Wal-Mart, Target, Kroger, Meijer, Walgreens, CVS, and others. To learn more about 1440 Foods, visit www.1440Foods.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. 

Contact:
1440 Foods
Ben Adkins
BenAdkins@SoliloquyGlobal.com | 502-619-4267

One Southern Indiana
Brittany Schmidt, Manager of Programs, Events, and Groups
BrittanyS@1si.org  | 812-945-0266

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Economic Update | “Bad News”, and Stock Markets Surge

by with No Comment Economic Development

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

Markets started the year anticipating six interest rate reductions by the Fed, while the Fed was proclaiming three. Continued moderation of the Consumer Price Index (CPI) along with Fed speak gave the markets confidence that 2024 would be the year of rate cuts.  Stock markets surged as a result.

A few columns ago, I offered that the narrative of “stagflation” would begin to enter the national scene. Stagflation is the combination of slower growth and inflation, or elevated prices.  This was reinforced with the first quarter GDP report showing quarter-over-quarter growth of 1.6%, along with CPI reports showing that inflation was greater than expected. Interest in the term “stagflation” surged on Google Trends, peaking during late April. The market went from pricing six rate reductions down to possibly two.   

All this changed with the national employment report released on May 3rd. Jobs added came in at 175,000.   While this would normally be considered a solid month, it was significantly under the market-expected level of 240,000 plus. A few weeks ago we talked about equity markets in search of “bad news”, and it hit the jackpot on May 3rd!   The average workweek declined to 34.3 hours, along with average hourly earnings. Along with the slowdown in payrolls, the unemployment rate increased to 3.9%, from 3.8% the prior month. Inferences from the national employment report were supported by a prior report on job openings, showing additional declines. The S&P surged more than 1% on this “bad news”. The weaker payroll growth put rate cuts by the Fed back on the table. Last week, new claims for unemployment ticked up to the highest level since August. The CME Fed Watch Tool is now showing the odds of the first Fed rate reduction in September, and another one in December, although with less than convincing current probabilities. 

There has been other “bad news” over the past couple of weeks. The ISM Services Index, a measure of service-side activity of the economy, unexpectedly declined to 49.2, signaling contraction in the largest part of the economy. During the pandemic, the service side of the economy had cooled considerably, as consumers flocked to goods spending. Since then, goods spending moderated, and services fueled economic growth. The ISM Services Index has been under 50 in only three different periods since 2009:  April and May of 2020, December 2022, and the last reading. The index happened to be released on the same day as the employment report, and this was additional “bad news” for the positive stock market response. 

Survey data have also cooled over the past few weeks.  The Small Business Optimism Index has been declining since December and is now at the lowest level since late 2012. Respondents point to inflation as the top business problem. Measures of consumer optimism have also waned.  The Conference Board consumer confidence measure, which leans more on employment and job security,  declined to 97, less than the market consensus and lower than the prior month of 103.1 The University of Michigan consumer sentiment measure, which is aligned more with consumer finances, plunged to 67.4, under the expectation of 76.5 and lower than the prior month of 77.2.

Locally, employment across the five Louisville Metro Southern Indiana counties (Clark, Floyd, Harrison, Scott, and Washington) is down from last year. This measure of employment is not necessarily country-specific. That is, the place of employment could be outside the five counties, in Kentucky, for example. So, negative changes in employment in the five counties do not necessarily imply that jobs are shrinking in these specific counties. But here is an interesting observation of negative year-over-year changes in Southern Indiana employment. In the last 30 years, a negative change in employment is usually associated with a recession, either a year or so before or during. A negative year-over-year change in employment occurring without a recession happened only once, and that was in 2004.

How fast conditions can change!  Since as recent as the third week of April, the Dow, S&P, and NASDAQ are all up around 5%, reversing losses of the prior month. The market is getting the bad news it was seeking, and now interest rate cuts will need to materialize to sustain gains. The problem with cuts is that a weaker economy is usually the cause.