Gov. Holcomb announces Canadian Solar building new $800M solar cell manufacturing facility in Southeast Indiana

by with No Comment 1si News1si Press ReleaseEconomic Development

Company’s investment will add 1,200 jobs, produce 5GW annually at River Ridge Commerce Center in Jeffersonville, powering solar energy across U.S.

JEFFERSONVILLE, Ind. October 30, 2023– Governor Eric Holcomb today announced plans for a new solar photovoltaic (PV) cell production facility in Indiana. Canadian Solar’s new plant, which will be the company’s second solar module production facility in the U.S., will create approximately 1,200 new jobs in Jeffersonville over the next several years. 

“Indiana’s strong advanced manufacturing sector positions the state to help lead the global energy transition, developing and powering new solutions in batteries, solar and hydrogen,” said Gov. Holcomb. “Canadian Solar’s new U.S. location in Jeffersonville will put our skilled Hoosier workforce at the center of cultivating solar power, making energy efficient panels more accessible to consumers across the country.”

Canadian Solar, an integrated provider of solar power products, services and system solutions, will invest a projected $800 million to construct and equip a state-of-the-art PV cell manufacturing plant at the River Ridge Commerce Center in Jeffersonville. The new plant will produce an annual output of 5GW – equivalent to approximately 20,000 high-power solar panels per day – and ship the finished cells to the company’s new module assembly facility in Texas, announced earlier this year. Production is expected to begin by the end of 2025. 

“Establishing this factory is a key milestone that will enable us to better serve our U.S. customers with the most advanced technology in the industry,” said Dr. Shawn Qu, founder and CEO of Canadian Solar, emphasizing the importance of this new facility. “This is the second of the anticipated long-term investments we expect to make in the U.S. as we think strategically about a sustainable and resilient clean energy supply chain. We thank the state of Indiana, Clark County, and the city of Jeffersonville for their critical support and we look forward to working with them as we grow.”

Canadian Solar plans to begin hiring for new positions in mid-2024 and will ramp up hiring in early 2025 to fully staff the Jeffersonville plant. This facility joins the global manufacturing facilities in Canada, China, Brazil, Vietnam and Thailand.

“The city of Jeffersonville is pleased that Canadian Solar has chosen River Ridge Commerce Center as home for their newest critical production facility in the United States,” said Jeffersonville Mayor Mike Moore. “Not only are they making a large financial investment into our community, but they will also become one of the largest single-site employers in the Greater Louisville region. When in full production, their total employment base will include over 150 engineers at this facility. We are thrilled to see a global industry leader join our community and provide a product with enormous potential.”

“This is a historic investment in River Ridge and Southern Indiana,” said Jerry Acy, executive director of the River Ridge Development Authority. “The technologies of the future are being built right here at River Ridge, I want to thank Dr. Shawn Qu and his team at Canadian Solar for their commitment to our region. We look forward to a successful partnership that will launch the next generation of solar power.”

Based on the company’s job creation plans, the Indiana Economic Development Corporation committed an investment in Canadian Solar of up to $9.7 million in the form of conditional tax credits and up to $400,000 in conditional training grants. The IEDC also committed an investment of up to $2 million in conditional redevelopment tax credits based on the company’s investment plans and up to $200,000 in Manufacturing Readiness Grants. These incentives are performance-based, meaning the company is eligible to claim state benefits once investments are made and employees are hired and trained. The City of Jeffersonville and the River Ridge Development Authority offered additional incentives.

                                                                         – 30 –

About Canadian Solar Canadian Solar was founded in 2001 in Canada and is one of the world’s largest solar technology and renewable energy companies. It is a leading manufacturer of solar photovoltaic modules, provider of solar energy and battery storage solutions, and developer of utility-scale solar power and battery storage projects with a geographically diversified pipeline in various stages of development. Over the past 22 years, Canadian Solar has successfully delivered around 88 GW of premium-quality, solar photovoltaic modules to customers across the world. Likewise, since entering the project development business in 2010, Canadian Solar has developed, built and connected around 8.8 GWp in over 20 countries across the world. Currently, the Company has approximately 574 MWp of projects in operation, 6.7 GWp of projects under construction or in backlog (late-stage), and an additional 18 GWp of projects in advanced and early-stage pipeline. Canadian Solar is one of the most bankable companies in the solar and renewable energy industry, having been publicly listed on the NASDAQ since 2006. For additional information about the Company, follow Canadian Solar on LinkedIn or visit www.canadiansolar.com

International Restaurant Chain Announces New Bakery and Distribution Hub in Southern Indiana

by with No Comment 1si News1si Press ReleaseEconomic Development

The Cheesecake Factory Incorporated will open a large-scale bakery to distribute its iconic desserts. 

Charlestown, IN. (October 25, 2023) 

Charlestown is welcoming a high-profile name to its community. The Cheesecake Factory Incorporated, an industry-leading restaurant, is opening a large bakery for manufacturing and distributing its iconic cheesecake and other desserts to operators, retailers, and distributors. The bakery and operations will be housed in the River Ridge Commerce Center and will invest over $74 million into the land, construction, machinery, fixtures, and IT. By 2025, the bakery and distribution operations should have more than 200 employees, making an average wage higher than the Clark County average.  

The Cheesecake Factory, known for its extensive menu, is a leader in experiential dining. The company has more than 300 restaurants in the United States and Canada across its portfolio of concepts and operates two bakery facilities in the United States. They were named to the FORTUNE Magazine’s “100 Best Companies to Work For®” list for the 10th consecutive year in 2023. The bakery’s role is to produce high-quality cheesecake and desserts for the company’s restaurants and licensees as well as third-party customers.  

“We are very pleased to locate our new bakery production facility in Charlestown, Indiana,” said David Overton, Founder, Chairman and CEO of The Cheesecake Factory Incorporated.  “This year is the 51st anniversary of my parents opening the first Cheesecake Factory Bakery, and it also marks the 45th anniversary of opening our first restaurant in Beverly Hills.  Over the last half-century our desserts have developed a reputation around the world, and we are so pleased that we’ll have a third bakery production facility to support our domestic and international growth into the future.”   

Based on the company’s job creation plans, the Indiana Economic Development Corporation (IEDC) committed to an investment in The Cheesecake Factory Bakery of up to $2.6 million in the form of conditional tax credits and up to $100,000 in conditional training grants. These incentives are performance-based, meaning the company is eligible to claim incentives once Hoosiers are hired and investments are made. River Ridge Commerce Center is also offering tax savings of approximately $6.3 million on real and personal property and will be making additional road improvements to support the project.  

“Indiana’s strengths in agbioscience and manufacturing make our state the ideal destination to help companies like The Cheesecake Factory to develop products and serve customers across the country,” said Ann Lathrop, chief strategy officer at the IEDC. “As a state, we’re committed to advancing economic and community development in all communities across Indiana. This new investment will accelerate industry growth in Charlestown and the surrounding southeast Indiana region, creating new jobs and new opportunities for Hoosier families to prosper.” 

“What an amazing opportunity for the City of Charlestown and the region,” said Mayor Treva Hodges. “We are excited to be the third production site for The Cheesecake Factory’s bakery operations, and can’t wait to see the community impact their investment will bring our growing area.   

“This commitment by The Cheesecake Factory to bring its bakery production facility to River Ridge is a major moment for the commerce center and exemplifies the investment and rapid growth we’re creating on the Charlestown side of River Ridge,” said Jerry Acy, River Ridge Development Authority Executive Director. “It is truly a pleasure working with David Overton and his team at The Cheesecake Factory, I am proud of what this partnership brings to Southern Indiana and the region.”

“This is a huge win for the City of Charlestown and the Southern Indiana region,” added John Launius, Vice President and Director of Economic Development for One Southern Indiana.  “It is exciting for us to be the newest home to a company with great name recognition and a stellar international reputation for service and quality.  The company’s growth trajectory will benefit Southern Indiana families for decades to come.” 

About The Cheesecake Factory Incorporated 

The Cheesecake Factory is a leader in experiential dining. We are culinary forward and relentlessly focused on hospitality. Delicious, memorable experiences created by passionate people – this defines who we are and where we are going. We currently own and operate 324 restaurants throughout the United States and Canada under brands including The Cheesecake Factory®, North Italia® and a collection within our Fox Restaurant Concepts business. Internationally, 31 The Cheesecake Factory® restaurants operate under licensing agreements. Our bakery division operates two facilities that produce quality cheesecakes and other baked products for our restaurants, international licensees and third-party bakery customers. In 2023, we were named to the FORTUNE Magazine “100 Best Companies to Work For®” list for the tenth consecutive year. To learn more, visit www.thecheesecakefactory.com, www.northitalia.com and www.foxrc.com. 

From Fortune ©2023 Fortune Media IP Limited. All rights reserved. Used under license. Fortune and Fortune 100 Best Companies to Work For are registered trademarks of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of, The Cheesecake Factory Incorporated. 

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: 
The Cheesecake Factory Incorporated 
Investors  
Etienne Marcus 
818-871-3000 
investorrelations@thecheesecakefactory.com  

Media
Berk Communications
Brooke Levine / Gabrielle Gaines
732-735-5982 / 917-991-8354 
cheesecake@berkcommunications.com

One Southern Indiana 
Brittany Schmidt, Content Marketing and Media Relations Manager 
BrittanyS@1si.org  
812-945-0266 

 

### 

Local AISC Certified Steel Fabricator and Manufacturer Expanding Operations

by with No Comment 1si News1si Press ReleaseEconomic Development

Midwest Metal Works, Inc. is expanding operations to include new machinery and training.

New Albany, IN. (October 19, 2023)

Midwest Metal Works, Inc. is growing. The steel fabricator and manufacturer plan to invest in new machinery and training to increase production and create additional business for the Indiana-based company. The total capital investment is estimated at $1,372,873, creating 12 more jobs with an average wage of over $42.00.

Midwest Metal Works has been a local industrial, commercial, and sheet metal fabricator and manufacturer since 2006. The company includes skilled journeymen and apprentices and has created products for many industries, including power generation plants, oil refineries, food manufacturers, automotive, distilleries, and the Department of Defense. Currently, they have 11 full-time employees with an average wage of $37.00.

“We couldn’t be more thrilled to expand our current operations,” said Jeff Elzy, President of Midwest Metal Works. “The increased growth we have seen over the years has led to this expansion, and with the new equipment, we can now produce more for our current clients and increase our client base to include companies that currently look out of Indiana for their products.”

Based on the company’s job creation plans, the Indiana Economic Development Corporation (IEDC) committed to an investment in Midwest Metal Works of up to $100,000 in the form of conditional tax credits. The IEDC also committed an investment of up to $73,140 in Manufacturing Readiness Grants, which are designed to help companies invest in smart manufacturing and new technologies. These incentives are performance-based, meaning the company is eligible to claim incentives once Hoosiers are hired and investments are made. In addition, the City of New Albany is offering the company personal and real property tax abatement, phasing in over five and ten years, respectively.

“Indiana’s robust manufacturing sector continues to accelerate and create new, high-wage jobs thanks to the commitment of companies like Midwest Metal Works,” said Ann Lathrop, chief strategy officer at the IEDC. “As a state, we’re working hand-in-hand with manufacturers to make critical investments in smart technologies and processes to future-proof our businesses, upskill jobs and push Hoosier manufacturing forward, ensuring Indiana is at the forefront of developing and producing the products that power tomorrow’s global economy.”

“The City of New Albany was pleased to be able to assist Midwest Metal Works with their expansion,” stated Mayor Jeff Gahan. “It’s wonderful to see companies like Midwest Metal Works recognize the value of being located here in our River City, and we are so proud that they have chosen to expand in New Albany.”

 “We are very excited to see Midwest Metal Works continue to grow,” said John Launius, Vice President and Director of Economic Development at One Southern Indiana. “Not only are they expanding current operations, but they are also contributing to our region’s sustained economic growth by creating more opportunities for our local community.”

 

About Midwest Metal Works

Midwest Metal Works specializes in industrial metal fabrication, installation, and maintenance. With skilled journeymen and apprentices, we are able to complete the work on time and on budget. Decades of experience have allowed our reputation to grow, along with our capabilities and our client list. We supply a variety of industries, including Power Generation Plants, Oil Refineries, Food Manufacturers, Distilleries & the Automotive industry. We offer the highest level of customer service to meet the demanding expectations of our customers. For more information on Midwest Metal Works, visit www.midwestmetalworksinc.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:

Midwest Metal Works
Jeff Elzy, President
jeffelzy@midwestmetalworksinc.com
812-981-0810

One Southern Indiana
Brittany Schmidt, Content Marketing and Media Relations Manager
BrittanyS@1si.org
812-945-0266

Economic Update | Indiana and Kentucky’s Labor Force Challenges

by with No Comment 1si NewsEconomic Development

submitted by
Uric Dufrene, Ph.D., Interim Executive Vice Chancellor for Academic Affairs, Sanders Chair in Business, Indiana University Southeast

The latest statewide employment data show that Kentucky has one of the hottest economies nationwide.  August BLS data puts Kentucky payroll growth at about 2.6% from the same time last year. Over the year, the Bluegrass state has added about 52,000 jobs.  The Lexington and Bowling Green metropolitan areas saw the highest percentage change in jobs, at 3.4% each. The largest metropolitan area, Louisville, added about 7,000 jobs over the year, for a growth of about 1.0%. 

In contrast, Indiana added 59,000 jobs, a change of 1.7% from the previous year. The two metro areas of Indianapolis and Ft. Wayne show the highest percentage growth in jobs at 2.5% and 2.2% respectively. Three metro areas, Muncie, Elkhart-Goshen and Lafayette-West Lafayette, saw a negative change in payrolls from the year before.   Elkhart-Goshen, home to the RV manufacturing industry, saw the largest decline of 5,000 payrolls year-over-year. 

While the short-term progress in payroll growth is impressive, especially for Kentucky, the longer-term growth in the labor force for both states is troubling. Labor force growth is critical because of the impact on gross domestic product.  Limited labor force growth will ultimately show up in a state’s GDP-generating capacity unless this is counterbalanced by capital investments that result in higher productivity. 

We can compare the labor force growth of both states to neighbors as well as other states that have notched economic wins.  Since states vary by size, we need to make statistical adjustments to place states on a level playing field, or to compare apples to apples. We can do this by indexing the labor force of each comparison state to 100.  The magnitude of growth in the labor force will then show up as the difference from the starting point of 100.  

Over the past 20 years, the labor force of Indiana grew to an index of 107.85.  Kentucky is slightly under this at 103.94. You can interpret this as a 7.85% change in the labor force for Indiana since 2003, and a 3.94% change for Kentucky.  How does this compare to neighboring states?   Well, both Indiana and Kentucky fare better than Ohio (99.75%) and Illinois (102.02).  For Ohio, the state’s labor force is smaller today than 20 years ago. 

The comparisons are quite stark when you compare to states that are seeing strong economic gains, driven by labor force growth and capital investments. Kentucky’s neighbor to the South, Tennessee, has an index value of 116.7, which means its labor force has grown by almost 17%.   Georgia’s index value is 120.35, or a 20% growth in labor force.  Much has been written and documented about the population growth of states like Florida and Texas.  Both states are seeing labor force growth of 36% and 38% respectively.   Other notable observations for comparative purposes:  Idaho (139.69), Nevada (137.7), South Carolina (122.25), California (112.36), Wyoming (109.39), and the U.S. (114.46).   Indiana and Kentucky’s labor force growth has been below the U.S. for the past 20 years.

In the last state employment report, there were five states that produced job growth higher than Kentucky:  Florida (2.8%), Idaho (2.7%), Nevada (3.9%), Texas (3%), and Wyoming (2.7%).   All saw labor force growth that exceeded both Indiana and Kentucky in the past 20 years.    

For both Indiana and Kentucky, growth in the labor force is critical to their respective economic futures.  We must continue to make the quality of place investments that help boost the attractiveness of both states and help retain and attract workers.  The decline in the college-going rates of both states is alarming, and if not reversed, will make talent in-migration even more critical.  Investments in education and technology must help drive productivity gains, all being crucial for long term economic growth.    

Economic Update | The Fed versus The Data

by with No Comment 1si NewsEconomic Development

Submitted by Uric Dufrene, Ph.D., Interim Executive Vice Chancellor for Academic Affairs, Sanders Chair in Business, Indiana University Southeast

In the economic indicators game, the monthly employment report has always been the champion among all economic indicators.  The monthly payroll numbers along with the unemployment rate conveys much about the state of the macroeconomy and offers clues to both bond and stock investors.  It remains one of the most watched and followed. Since the forty-year high in inflation last year, and early inaction by the Fed, inflation indicators are now in the running for the most important and followed. From 2000 to 2021, the highest rate of core inflation was 2.93% and that occurred in the second half of 2006, just before the Great Recession. Core strips out the cost of food and energy and is a preferred measure of underlying inflation. Outside of that run-up in 2006, the highest core rate was just over 2%.  So, inflation was contained, and as a result, inflation reports such as the Bureau of Labor Statistics Consumer Price Index did not attract as much attention or excitement. Since the headline 9.1% CPI peak of last year, interest and monitoring of the CPI have increased considerably.  It is one of the reports that provides insights on prices and ultimately Fed decisions on interest rates.

“Data dependent” is a phrase that has been used by Chairman Powell over the past several FOMC meeting regarding Fed decisions on interest rates. This means that the data will ultimately determine Fed decisions, which is how it usually works, and supposed to work.  So, if inflation comes in hotter than expected, this could result in either a pause or interest rate increases.  If inflation is weaker than expected, this might produce a decision that would reduce interest rates. The Fed paused on the decision last week, holding the Fed Funds rate at 5.5%.  However, the “dot plot” was revised upward, indicating that rates would be “higher for longer”. As mentioned in a recent column, the Fed has no other choice for such a narrative.  It must be hawkish, and that was the tone of the last meeting.   Nonetheless, there was a pause in interest rates, and now the next decision moves to November. 

On data dependency, the last BLS report on the Consumer Price Index (CPI) showed that the annual rate of inflation increased from 3.2% to 3.7%. This was slightly above the consensus estimate of 3.6%. The monthly increase was .6%, the highest monthly increase in more than a year. The increase in the monthly and annual rates was due to gasoline, accounting for more than half of the monthly increase.   The cost of shelter was also a major contributor to the monthly increase. The good news was on the core rate, however. The core rate came in a little hotter on a monthly basis but declined from 4.7% to 4.3%. When you remove the cost of food, energy, shelter and used cars, the annual rate of inflation declines to 3.2%.  

How does this compare to a recent period?  Around the Great Recession and Fed policy at the time, the core rate of inflation moved from 2.93% to .6% in almost four years. This also required an unemployment rate to reach 9.9%. In the current regime, the core rate peaked at 6.64% back in September 2022, and has already declined to 4.39% in August. In less than a year, the Fed has already produced a core rate decline that equals the decline observed in 4 years around the Great Recession, and with only 2/10ths increase in the unemployment rate this time.    

Another important indicator for the Fed is average hourly earnings, and here, the trend is in the right direction.  In 2020, during the height of the pandemic, average hourly earnings were up 7.8%.   We then saw the growth in earnings fall off the cliff, declining to 1.47% in April 2021.  As the economy continued to reopen and labor shortages intensified, average hourly earnings increased by almost 7% a year later in April 2022. Since then, however, average hourly earnings changes have been on the decline.  The most recent data release shows a year-over-year change of 4.5%. 

Declining core prices, along with softening average hourly earnings, will likely produce another pause for the Fed in November. The data will drive that decision. While it may be difficult to realize, progress is being made.  An option to increase puts the possibility of another rate hike on the table, but the data will ultimately show that we will likely see another pause. 

Economic Update | Continued Strong Gains for Southern Indiana

by with No Comment 1si NewsEconomic Development

submitted by

Uric Dufrene, Ph.D., Interim Executive Vice Chancellor for Academic Affairs, Sanders Chair in Business, Indiana University Southeast

–All eyes on CPI Wednesday

The latest employment report should put a lid on any further rate increases by the Federal this year.  The last BLS monthly report on the nation’s jobs picture showed another steady increase in payrolls, but the unemployment rate increased to 3.8%. An additional 187,000 jobs were added in August, while slower than the numbers produced last year, such a jump in payrolls would be considered quite healthy compared to historical norms. The Fed is striving for a cooling labor market, as evidenced by a higher unemployment rate, but also not putting the economy in a recession. A softening labor market should also bring more progress on the inflation front, helping meet the Fed’s dual mandate of stable prices and employment.    

The other piece of music to the Fed’s ears came in the hourly earnings figures in the report.  Average hourly earnings increased 4.3% over the year, and this was less than the consensus estimates. Slowing earnings will also serve as a headwind to higher inflation.    

There was more good news as it relates to price pressures, and that came with the jump in the labor force. The nation’s labor force increased by 736,000 in August, driving an increase in the labor force participation rate to 62.8%. An expanding labor force increases the labor pool for employers, reducing wage pressures and contributing to softer price pressures.  

Finally, the previous month’s payroll increase was revised downward, from an initial 185,000 to 105,000, a number that signals a cooling labor market.  Altogether, payrolls for the past two months were revised downward by 110,000, removing some of the steam from a previously hot labor market.

With the most recent data, the economy is inching further along to a softer landing.  Job creation continues, without significant spikes in the unemployment rate, and price pressures continue to subside.  The latest ISM report on services showed a higher-than-expected result, pointing to strength in the services side of the economy.  The most recent report on inflation, the PCE Deflator, and the Fed’s preferred inflation gauge, showed that inflation increased by just 2/10ths of a percent in July. On an annual basis, this puts inflation at 2.4%, close to the Fed’s goal of 2%. The Fed will likely keep rates on hold for their next meeting. An increase is not likely, but don’t expect the Fed to reduce rates for the rest of the year. All eyes will be on the CPI report out this Wednesday. FactSet consensus estimates point to a .6% monthly gain and 3.6% on an annual basis. Anything under these numbers will be met very favorably by equity markets.  Anything higher, expect a turbulent day with stocks and bonds.

Turning to Southern Indiana, the five Indiana counties of the Louisville Metro region gained close to 3,500 jobs in the first quarter, matching the quarterly average since the 3rd quarter of 2021.  Average weekly wages notched another increase, moving to $998 a week, marking the highest wage level in Southern Indiana for any first quarter. The three leading industries based on job growth were health care and social services (+1,342), construction (+524) and retail trade (+415). Accommodation and food services notched another 380 payrolls;  industry payrolls are about 1,200 higher than the level existed during the first quarter of 2020. 

As a comparison to other metro areas across Indiana, this places Southern Indiana 2nd among metro areas with respect to payroll growth during the first quarter of 2023, and above the overall average of 1.5%. Payrolls across Southern Indiana grew by 3.1% over the year;  west Lafayette had the highest growth in payrolls with 3.8%.

Two metro areas, Kokomo and Elkhart-Goshen, saw a decline in year-over-year payrolls.  Elkhart-Goshen saw the largest percent decline, 5.5%, and an overall decline of 7,394. RV shipments are down considerably from last year, and the payroll numbers for Elkhart-Goshen likely reflect this shift in spending.

On the wage front, average weekly wages in Southern Indiana are 23.4% higher than the first quarter of 2020;  average weekly wages have gone from $809 in 2020:Q1 to $998 in 2023:Q1. The largest absolute increase occurred in the professional, scientific, and technical services industry, increasing by $311 since 2020:Q1. Other notable increases since 2020 are in transportation and warehousing (+$289), wholesale trade (+$262) and information (+$243).

We’ll likely see no change in Fed rates for the rest of the year, and any recession is now postponed to 2024. Perhaps the economy will miss one altogether.  It is too early to definitively make that call, but 2023 continues to set the economy up for a softer landing in 2024. 

 

Louisville-based manufacturer to expand into Southern Indiana

by with No Comment 1si News1si Press ReleaseEconomic Development

Conco, Inc. opening a new facility and investing over $54 million in Scottsburg.

Scottsburg, IN. (August 14, 2023)

Southern Indiana is celebrating the growth of another manufacturing company in the region. Conco, a full-time, full-service supplier of ammunition containers and related services, plans to invest $54.5 million to establish a second facility in the region, this one located in Scottsburg, Indiana. The company’s investment includes over $36 million in new equipment, furnishings, fixtures, hardware, and software; $11.5 million to purchase the former Tokusen USA space; and $6.9 million in improvements to the existing spaces. 

This investment will result in up to 175 new full-time positions at the Scottsburg location, including Production Team Members, Quality Technicians, Welders, Paint Technicians, Process Technicians, Controls Technicians, Tool & Die, Industrial Maintenance, Electricians, Engineering and Administration at an average wage of $28 per hour.

Conco has served the United States Armed Forces as a supplier since 1967. With a strong reputation for high-quality products, on-time delivery, and tech support, they continue to meet military 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 container options.

“We are excited to join the Southern Indiana region with our new facility in Scottsburg,” said Karen Paschal, President and CEO of Conco, “When looking at locations, the former Tokusen USA space was a perfect fit for what we needed to expand, and we look forward to working with the State of Indiana, the City of Scottsburg, and its residents to create additional growth for the region.”

The Indiana Economic Development Corporation (IEDC) has committed to an investment in Conco of up to $1.925 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. In addition, the City of Scottsburg is offering the company personal and real property tax abatement, phasing in over five and ten years, respectively.

“Indiana’s defense sector continues to grow, and we’re excited to welcome Conco to our network of advanced manufacturers that are contributing to and supporting our nation’s armed forces,” said Governor Eric J. Holcomb. “Conco’s decision to locate in Scott County is a testament to the region’s skilled workforce and vibrant communities, and the company’s presence in southern Indiana will further advance new patriotic career opportunities for families for years to come.” 

“The City of Scottsburg is thrilled to be working with Conco and helping them establish a home in Scottsburg,” said Terry Amick, Mayor of the City of Scottsburg. “We are proud to support their efforts as they expand their services for the United States Armed Forces and are excited to see the local community growth they will bring to the area.”

“Southern Indiana has seen major manufacturer growth over the last several years with projects expanding or new locations opening in the region,” said Wendy Dant Chesser, President and CEO of One Southern Indiana. “Conco’s decision to expand and open a new location in Scottsburg shows that our region remains a prime location for manufacturers – big and small, current and new. 1si is excited to see what Conco will bring to the manufacturing region and look forward to continuing this partnership and assisting them in any way we can.”

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 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:

Conco, Inc.

Karen Paschal, President & CEO

kpaschal@concocontainers.com

502-962-2121

 

One Southern Indiana
Brittany Schmidt, Content Marketing and Media Relations Manager

BrittanyS@1si.org
812-945-0266

 

###

Economic Update | The Resilience of the Consumer

by with No Comment 1si NewsEconomic Development

submitted by

Uric Dufrene, Ph.D., Interim Executive Vice Chancellor for Academic Affairs, Sanders Chair in Business, Indiana University Southeast

One of the reasons why we have not seen a recession this year, and likely for the rest of the year, has to do with the consumer, driver of almost 70% of the U.S. economy. So, what is happening with the consumer will often provide clues about the direction of the U.S. economy. Last year, for example, the economy was seeing 40-year high rates of inflation.  Skyrocketing inflation was expected to break the backs of the consumer, and a recession would then follow. Additionally, consumer sentiment was in the doldrums, not only due to higher prices but also the collapse in both stock and bond values. Stock market indices saw significant erosion, and bond values declined due to increasing interest rates.  Consumer conditions were not favorable, and a recession was almost certain, as also evidenced by an inverted yield curve (short-term bond yields are higher than long-term bond yields), a reliable predictor of past recessions.    

Despite challenges, consumers have held up, steering the economy clear of a recession, at least for this year. Consumer spending on services has not slowed down. It took almost two years to recover from the decline in spending due to Covid, but spending has been increasing since. Goods spending saw astronomical gains coming out of Covid but has been normalizing since. Goods spending peaked in April 2021, and has decelerated since, but that was to be expected. Households can only make so many home repairs and buy so many couches, refrigerators, and RVs!

Higher mortgage rates were expected to also thwart the consumer, but most households with mortgage balances had already locked in an ultralow mortgage rate, immune from subsequent rate increases. Most are not eager to replace a low-rate mortgage with a higher rate, and this is one of the reasons why the housing supply, or homes available for sale, continues to be challenged.  Existing home sales, at the national level, are down more than 30% from a year ago.  Higher mortgage rates have impacted some industries, like real estate, housing, and mortgage finance, but the impact on most consumers has been minimized. 

One of the contrary benefits of higher mortgage rates is the impact on supply.  Restricting supply is providing support to home prices, when normally, higher mortgage rates might adversely impact housing values, like the housing crash that ultimately brought about the Great Recession of 2007.  Strong home values are providing a boost to homeowner’s equity, building wealth, and supporting a resilient consumer. Since the Great Recession, home equity loans have been on a continued downward slope, but since last year, home equity loans rebounded, allowing homeowners to tap into this wealth to support consumer spending.

This added equity to the household balance sheet is also giving consumers the confidence to take on more debt.  Consumer debt dipped coming out of the Covid recession but started climbing around mid-2021.  Debt continues to increase, but the rate of growth has subsided. Household debt ratios had dropped to a 30-year low in March 2021 and began climbing to a pre-pandemic high in late 2022.  Since then, household debt ratios have declined slightly, providing more ammunition for subsequent consumer spending. A red flag is beginning to emerge on the consumer debt side, however. While delinquency rates are lower than pre-pandemic levels, and significantly below rates associated with the Great Recession, delinquency rates on consumer loans and credit cards have been climbing.   

Household checkable deposits have declined from a peak in September 2022, but remain considerably higher than pre-pandemic levels. Consumer sentiment continues to climb from the trough of June 2022 but is at levels that historically coincide with recessions. Inflation continues to moderate, and the last report showed a decline in the core rate, previously referred to as “sticky”. The progress made on inflation is supporting consumer sentiment, one of the reasons why sentiment has been trending upward. The labor market has softened a little but is still very tight.  Job openings continue to exceed the number of unemployment and the growth in earnings now exceeds the rate of inflation.  We are still expecting a slowdown in the economy, but the overall shape of the consumer is one of the reasons any economic contraction will be mild.  

Economic Update | More Progress on Inflation and Growth

by with No Comment 1si NewsEconomic Development

submitted by

Uric Dufrene, Ph.D., Interim Executive Vice Chancellor for Academic Affairs, Sanders Chair in Business, Indiana University Southeast

The U.S. economy grew more than expected during the second quarter of this year.  The BEA released preliminary estimates of GDP and it showed that the nation’s economy grew at 2.4%, exceeding the consensus estimate of 2%. Consumer spending was the largest driver of growth, contributing 1.12 of the total 2.4% growth. Spending on services was the primary driver of consumer spending, exceeding the contributions from goods spending. The economy imported more goods than exported, subtracting from the overall GDP growth. On the investment component of GDP, non-residential investment was the largest contributor of gross private domestic investment, specifically, investment in equipment and structures.   Residential investment contributed negatively to the overall change in GDP. Government investment also contributed favorably to growth, with local and state government spending contributing the most. The GDP report was a boost to the idea of a soft landing. Even though the GDP report is a look at the economy through the rear-view mirror, it provided further evidence that the economy is inching toward the so-called soft-landing scenario.   

The big news from the past couple of weeks was out of the Fed and the Bureau of Labor Statistics. The Fed announced another increase in the targeted Fed Funds rate to 5.25%.  This increase was largely expected, but followers were more interested in Fed statements and of Jerome Powell for clues on subsequent rate hikes. The CME Fed Watch Tool now places an 80% probability of no change in rates at the next September FOMC meeting, and a 20% probability of a quarter percent hike. All this will rest on data over the next couple of months, with a greater focus on inflation indicators and the labor market. 

Markets and the Federal Reserve did get some reassurances about inflation with the release of two recent price reports:  the CPI and PCE price index.  First, the Consumer Price Index (CPI) declined to 3%, down from the prior month of 4%. The core rate, CPI minus food and energy, came down to 4.8%, from the prior month of 5.3%. The monthly changes for both the headline CPI and the core rate came in under the market consensus. The monthly change of .2% in the headline CPI is consistent with an annual rate of 2.4%. As we’ve mentioned on these pages, the rate of inflation is coming down, and the CPI report provided a significant boost to that argument. The Fed’s preferred gauge on inflation, the PCE Deflator, showed additional disinflation in both the headline rate and the core. The headline rate declined to 3% and the core moderated to 4.1%, down from the prior month of 4.6%. The quarterly Employment Cost Index (ECI) was also released the same day as the PCE Deflator, and it too showed moderation in employment costs, providing additional support for moderating inflation. 

While still above the Fed’s preferred inflation target of 2%, the past two weeks provided additional data in support of moderating inflation. We will likely not see a rate increase in September, or the rest of this year.   The July rate increase may be the last. If the last quarter sees a significant slowdown in the labor market, either through a higher unemployment rate or a reduction in monthly job creation, the Fed could even begin reducing interest rates later this year. I think that scenario is highly unlikely, however.  The labor market remains tight, and employers are reluctant to let go of employees.  Unemployment claims are not pointing to any labor market slowdown, and households have been quite resilient, providing support to overall growth. No recession for this year, and moderating prices, along with a tight labor market, will continue to pave the way for a soft landing. 

This Friday is the Super Bowl of economic indicators, the national employment report.   Payroll gains have moderated from last year but are still above historical monthly gains. In the past couple of years, we’ve observed that “good news” reports resulted in negative stock market reactions due to the impact on Fed Reserve interest rate changes.  A “good news” report implied that the Fed would have to increase rates to slow down the economy and temper inflation. “Bad news” reports had the opposite effect. A “bad news” report produced a positive stock market reaction. If we see a strong report this Friday, it may produce a positive reaction in the markets.  A strong report will provide further support for no recession, and as inflation continues to moderate, the markets will place greater emphasis on growth, over the Federal Reserve’s impact on interest rates. 

Economic Update | On Final Approach for a Soft Landing?

by with No Comment 1si NewsEconomic Development

submitted by

Uric Dufrene, Ph.D., Interim Executive Vice Chancellor for Academic Affairs, Sanders Chair in Business, Indiana University Southeast

The big data point over the past two weeks was the print on CPI (Consumer Price Index). The Bureau of Labor Statistics reported that the annual change in the CPI declined to 3.0% in June, down from the prior month of 4%.  The 3.0% was less than expected and equity markets finished higher on the day. The core rate, which is CPI less food and energy, also declined, from 5.3% in May to 4.8% in June. The “stickiness” of inflation, sometimes described by officials and economists, refers to this core rate. The core for June came in under the consensus estimate and declined ½% from May to June.  The month-over-month change was .2%, compared to .4% in the prior month. Even though the core rate had been declining since September 2022 when it peaked at 6.7%, this was the largest monthly drop since. The reason why this was a significant report is that the narrative for two additional interest rate changes this year changed almost instantaneously. Yields on 2-year and 10-year Treasuries dropped as soon as the report was released.  The CME Fed Watch Tool is pricing another hike in July, but the probabilities favor this to be the last hike.  Prior to the CPI release, two additional hikes were on the table. While two hikes are still possible for the rest of the year, that scenario is now unlikely. 

More evidence of disinflation came the next day with the release of the PPI (Producer Price Index).   The year-over-year change in the PPI was 2.4% in June, down from 2.6% in May.    Taking the monthly change of .1% in June and stretching this out over a year would produce a year-over-year change of 1.2%.      

The economy is not yet in a recession, and one is not likely in 2023. National manufacturing, however, continues to be in a slump.  The last employment report saw manufacturing gain only 7,000 jobs, higher than the previous decline of 3,000.  The ISM manufacturing measure declined to 46, from the previous month of 46.9;  under 50 shows a contraction in manufacturing, and above 50 shows expansion.  The number has been under 50 since October 2022.   Both new orders and the backlog of orders have been trending down all year.  Even though the overall index has been declining for almost a year now, it is not quite yet at a level that coincides with a recession. The lower 40s range is closer to recessionary territory. While national manufacturing is seeing a slowdown, we are not seeing the same in the Louisville Metro region.    Preliminary payroll data show that manufacturing payrolls are growing at a rate that exceeds overall payroll growth. One possible reason is the pent-up demand that we are seeing in automobile sales and the impact on area manufacturers. 

The national slowdown in manufacturing was anticipated due to the surge in goods spending experienced during the pandemic and the months following.  As the economy reopened and spending transitioned from goods to services, goods spending had to normalize. The services economy continues to grow, however.  The last ISM services index came in at 53.9, compared to 50.3 the prior month, and higher than the consensus estimate of 51. As inflation continues to moderate, consumer optimism will increase, providing further support to the service economy.  The latest Michigan consumer sentiment survey saw a big jump in optimism, with the index coming in at 72.6 compared to 64.4 in the prior month. To be sure, consumers are still in the doldrums when we compare current levels of sentiment to historical levels.  But the optimism is on the upswing.   The Conference Board consumer confidence measure is more favorable and has been trending upward since July 2022.

We’ve heard a lot about soft and hard landings over the past year. With indicators over the past couple of weeks, the narrative is going to move in the direction of a soft landing. We will see no recession for the remainder of 2023.  If we continue to see moderating prices, and I think that is the case, there will be no additional hikes past July. Disinflation will support consumer moods and  spending, and a tight labor market will serve as a buffer from a slower economy, which is still expected.  A soft landing may in fact be the best-case scenario of 2023 and into 2024.