Economic Update: Latest County Jobs Show Speed Bump; Challenges in Transportation and Warehousing

by with No Comment 1si NewsEconomic Development

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

Coming out of Covid, the Southern Indiana economy has been seeing some of the strongest job growth in the past 20 years. Not counting the outsize numbers that occurred during 2020 and 2021, the past several quarters have generated some of the most impressive job gains. There was only one other period in the past 20 years where job gains were higher,  2015 and early 2016. Manufacturing, retail trade, and administrative and support, waste management, and remediation industries were the largest contributors to job growth during that period.     

New data are out at the county level, and it showed a noticeable deceleration in job growth for the five Southern Indiana counties of Clark, Floyd, Harrison, Scott, and Washington. This is a rear view of the economy since county payroll data have about a 6-month lag but can contain some useful information about the current state and trajectory of the economy. For the 3rd quarter of 2023, the Southern Indiana region gained 544 jobs compared to the previous year. Throwing out the Covid-related job losses, this would be the weakest since the 3rd quarter of 2019.   

When we break job activity down by industries, we see that the greatest losses occurred with industries that had the strongest gains during the high job growth year of 2015. Both manufacturing and administrative and support, waste management, and remediation (temporary labor services falls in this industry) suffered the largest job losses, losing 745 and 1,159 jobs respectively. Health care and social services added the most, boosting payrolls by 1,185.  For the four quarters leading up to 2023:Q3, health care was the dominant job creator across Southern Indiana.   

Transportation and warehousing saw another drop in payrolls. Back in 2021 and 2022, transportation and warehousing led all industries in job growth across the region. The nation’s economy saw a goods spending bonanza, driving demand for transportation services to carry goods from manufacturers to the consumer’s doorstep. The latest data show that the strong gains in transportation and warehousing had vanished, with the industry seeing negative changes for three consecutive quarters. 

Strong growth in transportation and warehousing was not just a Covid effect.  Back in 2018, transportation and warehousing saw job gains that exceeded 2,000 for four consecutive quarters. For 10 quarters up to 2023:Q3,  the average job change in transportation and warehousing was just 125 jobs. This almost standstill in transportation and warehousing is linked to both challenges and opportunities coming out of Covid. Record-breaking goods spending by consumers, along with all-time highs in freight rates, invited more trucking capacity and this necessitated the hiring of workers. This explains the large increase in transportation and warehousing jobs back in 2022. 

Since then, consumers have shifted more spending back to services, while freight rates have declined to levels that existed back in 2021, after hitting a record peak in 2022. Declining freight rates, along with current excess capacity in the industry have contributed to what some referred to as a “freight recession”. Local numbers in transportation and warehousing reflect part of this slowdown.     

Despite these challenges, truck driver occupations are still among the highest in job postings. A closer look, however, shows that job posting intensity, a measure of how hard employers work to fill positions, is the highest across all job postings and higher than the regional average. It was difficult to fill truck driver positions prior to Covid, and this difficulty has only intensified since.

Other areas of weakness in the 2023 3rd Quarter release dealt with wages.  Average weekly wages declined by $20, but more concerning was the decline in total wages for the region, the first decline since the 2nd quarter of 2020, the start of the Covid recession. Three industries contributed to the overall decline in wages:  manufacturing, transportation and warehousing, administrative and support, waste management, and remediation services.   

The 3rd quarter of 2023 turned out to be a slower period for Southern Indiana, consistent with the subdued growth expected in our 2023 economic outlook. There is a macroeconomy explanation to this 3rd quarter story. National manufacturing was in contraction all of 2023, and transportation and warehousing are still feeling the effects of a Covid boom and subsequent bust.    

We move to the national jobs report this Friday, the Super Bowl of economic indicators.  Watch for the size of the monthly job gains, changes in average hourly wages, and labor force growth. All will provide additional clues about inflation pressures, and subsequent actions, including delayed rate reductions, by The Fed. 

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Advocacy Update | 02.29.24

by with No Comment 1si NewsAdvocacy

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The 2024 Legislative Session has been moving! Here are some upcoming deadlines to keep in mind as the session moves forward. This year’s session seems set to conclude by the March 14, 2024, deadline.

  • Monday, March 4th – Last Day for 3rd reading of Senate bills in House
  • Tuesday, March 5th – Last day for Senate adoption of conference committee reports without Rules Committee approval
  • Tuesday, March 5th – Last day for 3rd reading of House bills in the Senate
  • Thursday, March 14th – Last day for adjournment of both houses

If you want to see our earlier Advocacy updates, please click here!

As a reminder, this year’s Call to Action continues the conversation with talent attraction and retention, focusing mainly on housing development, availability and affordability of childcare and eldercare, incumbent worker training options, employability of people with disabilities, and eliminating worker shortages.

New this Week:

Significant movement on HB-1183 (Foreign Ownership of Agricultural Land) has caused concern. The amendments made are not favorable to economic development projects. The final version of the bill would prohibit individuals or a company that is majority owned by foreign individuals from purchasing land that has been used as farm, timber or pasture land in the last five years and also prohibits the purchase of any land that is within 50 miles of a military base or 10 miles of a national guard armory or maintenance facility.

With the second reading scheduled for today, we anticipate having some major updates to discuss at our next leadership meeting and will continue to keep you updated on this bill’s progress.

Bills 1si is Monitoring:

  • HB-1121 – Local Income Taxes
    • Passed the Tax and Fiscal Policy Committee on 2/27/2024.
    • Scheduled for second reading on 2/29/2024.
  • HB-1183 – Foreign Ownership of Agricultural Land
    • Passed the Agriculture Committee on 2/27/2024.
    • Scheduled for second reading on 2/29/2024.
  • HB-1199 – Repeal of Economic Enhancement District Law
    • Amendment #1 and the second reading occurred on 2/27/2024.
    • Third reading scheduled for 2/29/2204.
  • SB-61 – Tourism Improvement District
    • No movement since 2/21/2024
  • SB-295 – Indiana Economic Development Corporation
    • No major updates.

Current List of Bills 1si Supports or Opposes:

Supports:

  • SB-2 – Child care
    • Bill is on second reading, scheduled for 2/29/2024.

Opposes:

  • The one bill that 1si opposes, HB-1157 – Non-Disclosure Agreements in Economic Development, has been labeled as “inactive.”

We’ll keep you updated, but if you’d like more information on our 2024 Advocacy Agenda, or to download a copy of it, please visit www.1si.org/advocacy or download your PDF copy here.

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Advocacy Update | 02.21.24

by with No Comment 1si NewsAdvocacy

Advocacy-Update-Email-Header2

The 2024 Legislative Session has been moving! Here are some upcoming deadlines to keep in mind as the session moves forward. This year’s session seems set to conclude by the March 14, 2024, deadline.

  • Tuesday, February 27 – Last day for House adoption of conference committee reports without Rules Committee approval.

If you want to see our earlier Advocacy updates, please click here!

As a reminder, this year’s Call to Action continues the conversation with talent attraction and retention, focusing mainly on housing development, availability and affordability of childcare and eldercare, incumbent worker training options, employability of people with disabilities, and eliminating worker shortages.

New this Week:

SB-61 has had significant amendments made to the original document and is now a bill that 1si does not fully support; it has been moved to the bills that 1si is monitoring. The 1si Advocacy Leadership team has also fielded questions on HB-1121, Local Income Taxes, and added that to the monitoring list.

Bills 1si is Monitoring:

  • HB-1121 – Local Income Taxes
    • The first reading was on 2/7/2024 and referred to the Senate Committee on Tax and Fiscal Policy.
  • HB-1183 – Foreign Ownership of Agricultural Land
    • No updates since last week, 2/14/2024
  • HB-1199 – Repeal of Economic Enhancement District Law
    • Recommends passage as amended, Yeas: 14; Nays:0 on 2/20/2024
  • SB-61 – Tourism Improvement District
    • Bill is scheduled for a hearing on 2/21/2024 through the House Committee on Ways and Means.
  • SB-295 – Indiana Economic Development Corporation
    • No updates since last week, 2/14/2024

Current List of Bills 1si Supports or Opposes:

Supports:

  • SB-2 – Child care
    • Bill is scheduled for a hearing on 2/22/2024 through the House Committee on Family, Children, and Human Affairs.

Opposes:

  • The one bill that 1si opposes, HB-1157 – Non-Disclosure Agreements in Economic Development, has been labeled as “inactive.”

We’ll keep you updated, but if you’d like more information on our 2024 Advocacy Agenda, or to download a copy of it, please visit www.1si.org/advocacy or download your PDF copy here.

Economic Update | Will the Consumer Continue Spending?

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 combination of 4-decade high inflation and the subsequent acceleration of interest rates almost assured a recession in 2023. Some economists had even forecast a 100% chance of a recession.  Bloomberg Economics, for example, in October 2022 predicted that the probability of a recession was 100% within 12 months. One often-cited indicator was the difference in interest rates on 10-year and 2-year Treasury securities. The rate on 2-year Treasuries had moved higher than the rate on 10-year Treasuries, a consistent predictor of recessions in the past. In fact, for the past six recessions, a recession followed when the difference between the 10-year and 2-year moved negative.     

We now know that the recession that was almost guaranteed never occurred. Growth was quite robust, with the 3rd quarter Gross Domestic Product (GDP), the market value of goods and services, hitting 4.9%, and the 4th quarter topping 3%. A closer look at GDP shows that the consumer was the primary driver of last year’s strong growth. Consumers were supposed to break over inflation and high-interest rates, but we saw the opposite.  In three of the four quarters, consumers made the greatest contribution to the growth in GDP. Because the consumer makes up more than two-thirds of the U.S. economy, what happens to the consumer will have a lot to say about the overall state of the economy, including this coming year.   

One of the drivers of consumer spending last year was the labor market. While job growth did decelerate from the previous year, the labor market remained quite strong. Average monthly job gains continued to exceed numbers observed prior to the pandemic, and the unemployment rate remained at historical lows.   Job openings, one measure of the demand for workers, declined from the start of the year but remained higher than the number of unemployed. The growth in average hourly wages has declined from the recent peak of March 2022 but now exceeds the inflation rate. In fact, from April 2021 to April 2023, inflation exceeds the growth in average hourly wages, putting consumers in a foul mood. Consumer sentiment plummeted to the lowest level on record by June 2022, where similar levels had always been associated with a recession.   

Since April 2023 however, the change in average hourly earnings surpassed the growth in prices, placing consumers in a stronger position. This is one of the reasons why consumer spending continued through 2023, thereby escaping a recession. Consumers have noticed, and both consumer sentiment and confidence have increased from the start of 2023. Continued low initial claims for unemployment, available job openings relative to the number of unemployed, strong wage gains relative to inflation, and monthly job creation, should continue to fuel a steady level of consumer spending. Households are also beginning to tap into home equity, reversing a decline in home equity loan activity since the Great Recession. This is fueled by the record high levels of household net worth, serving as a buffer to any downturn and support for consumer buying.

Risks to this consumer outlook are beginning to surface, however. The household debt service ratio saw a large decline coming out of the pandemic, as households were able to use government stimulus and pandemic-driven behavior to pay down debt. All those gains have been erased, and household debt is just under the level that existed prior to February 2020. Higher borrowing rates have impacted consumer payments, with delinquencies on credit cards and consumer loans now higher than the level that existed just prior to the pandemic.     

We should expect interest rates to continue their decline through 2024. Declining mortgage and consumer borrowing rates will further boost consumer sentiment and confidence, helping sustain consumer spending. This depends on the continued decline in inflation through the year, and interest rate cuts anticipated by the Fed. 2024 is not off to a good start however, as inflation came in higher than expected, and there was an undershoot in retail sales, except for food and drinking places. One data point does not set a trend, and the next few months will provide key data for the remainder of the 2024 outlook. 

Nonprofit Spotlight | Waterfront Botanical Gardens

by with No Comment 1si NewsNonprofit Spotlight

Waterfront Botanical Gardens
1435 Frankfort Avenue
Louisville, KY  40206
502-276-5404
www.waterfrontgardens.org

Contact person:
Megan Bibelhauser, Director of Marketing and Communications
mbibelhauser@waterfrontgardens.org

Please use 300 words or less to describe your agency and your impact on the community.

Waterfront Botanical Gardens is an urban botanical garden located minutes away from downtown Louisville and southern Indiana. Built upon a former landfill, the Gardens are a living museum that allows visitors to explore native and unique plant species while creating a deeper connection with nature. From Master Gardener to planting novice, the Gardens are here for all to enjoy. Admission is FREE, but as a 501(c)(3) nonprofit, the Gardens rely on community support to grow. Of the complete 23-acre site, three acres have been developed. The Gardens offer adult and youth programming, special community events, event rental space, group tours, and more. Soon, Waterfront Botanical Gardens will simply be a part of growing up in Kentucky and southern Indiana!

Agency Mission Statement or Description: Our mission is to cultivate urban botanical gardens that educate, inspire, and enhance appreciation of the relationship between plant life and a healthy environment.

Year established: Waterfront Botanical Gardens opened to the public in 2019.

Counties/regions serviced: The Gardens are a local, regional, and national attraction.

Focus areas: Environment, Sustainability, Adult and Youth Education

Impact on community: Waterfront Botanical Gardens is a unique cultural institution that provides imaginative and engaging programming, events, and experiences as well as education and research. In 2022, we welcomed 40,000 visitors to the Gardens and provided education to nearly 3,000 youth and 1,600 adults.

Volunteer Opportunities: Volunteers help us grow! Whether you love getting down in the dirt or greeting guests with a smile, there’s an opportunity for everyone to get involved at the Gardens. Join our 300 active volunteers with hands-on gardening, education, community outreach, special events, administrative support, Garden Guiding, and more! Visit waterfrontgardens.org/volunteer for information.

How 1si members can help your organization: We need your help to continue growing! 1si members can support the Gardens by donating, attending a class or special event, becoming a member, volunteering, or renting space at the Gardens for your next special event. If nothing else, please come visit – it’s free! Explore these opportunities at waterfrontgardens.org/guide.

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Advocacy Update | 02.14.24

by with No Comment 1si NewsAdvocacy

Advocacy-Update-Email-Header2The 2024 Legislative Session has been moving! Here are some upcoming deadlines to keep in mind as the session moves forward.  

  • Tuesday, February 27 – Last day for House adoption of conference committee reports without Rules Committee approval.  

If you want to see our earlier Advocacy updates, please click here! 

As a reminder, this year’s Call to Action continues the conversation with talent attraction and retention, focusing mainly on housing development, availability and affordability of childcare and eldercare, incumbent worker training options, employability of people with disabilities, and eliminating worker shortages.  

New this Week: 

Members of the 1si Team and Board of Directors visited the Indiana Statehouse for the Indiana Chamber Executive Association (ICEA) Chamber Day. The group attended a unique opportunity to meet and greet Governor Holcomb with other area chambers. Afterward the group attended panels and presentations focused on legislation, READI 2.0 and updates, tourism and community marketing, and advocacy.  

 

 

 

The group met with the following legislators while in Indianapolis: Senator Gary Byrne (Dist. 47), Representative Zach Payne (Dist. 66), Representative Rita Fleming (Dist. 71), and Representative Ed Clere (Dist. 72) before the Chamber Day Dinner.

Bills 1si is Monitoring:  

  • HB-1183 – Foreign Ownership of Agricultural Land 
  • The first reading occurred on 2/12 in the Senate, referred to the Committee on Agriculture. 
  • HB-1199 – Repeal of Economic Enhancement District Law 
  • The first reading occurred on 2/7 in the Senate, referred to the Committee on Tax and Fiscal Policy. 
  • SB-295 – Indiana Economic Development Corporation  
  • The first reading occurred on 2/12 in the House, referred to the Committee on Ways and Means.  

Current List of Bills 1si Supports or Opposes: 

Supports: 

  • SB-2 – Child care 
  • The first reading was on 2/6/2024 and was referred to the Family, Children and Human Affairs Committee; no updates since then. 
  • SB-61 – Tourism Improvement District 
  • The first reading occurred on 2/12 in the House, referred to the Committee on Ways and Means. 

Opposes:  

  • The one bill that 1si opposes, HB-1157 – Non-Disclosure Agreements in Economic Development, has been labeled as “inactive.” 

 

We’ll keep you updated, but if you’d like more information on our 2024 Advocacy Agenda, or to download a copy of it, please visit www.1si.org/advocacy or download your PDF copy here.  

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Advocacy Update | 02.07.24

by with No Comment 1si NewsAdvocacy

Advocacy-Update-Email-Header2

It’s week five of the Indiana General Assembly, and we’re almost to the halfway point of the 2024 session! Here are some upcoming deadlines to keep in mind as the session moves forward.

  • Tuesday, February 27 – Last day for House adoption of conference committee reports without Rules Committee approval.

If you want to see our earlier Advocacy updates, please click here!

As a reminder, this year’s Call to Action continues the conversation with talent attraction and retention, focusing mainly on housing development, availability and affordability of childcare and eldercare, incumbent worker training options, employability of people with disabilities, and eliminating worker shortages.

New this Week:

This week, the 1si Advocacy Leadership team focused on and discussed the bills that we are currently monitoring to see if there has been any progress or updates that need to be acted upon. The team also continued the conversation around SB-61, Tourism Improvement District, that Chair Jim Epperson originally was going to testify on behalf of 1si.

Any bill that did not receive a hearing or got voted out of a committee last week is now dead for the year, as the deadlines for both the House and Senate were last week. Bills have been heard on the House and Senate floors, and 1si continues to monitor the bills on our lists below.

Bills 1si is Monitoring:

  • HB-1183 – Foreign Ownership of Agricultural Land
    • Referred to Senate on 2/2/2024.
  • HB-1199 – Repeal of Economic Enhancement District Law
    • Referred to Senate on 1/31/2024.
  • HB-1368 – Riverfront Economic Development Tax Area
    • Has been with Local Government (House) since 1/10/2024. Labeled as “Inactive.”
  • SB-155 – Compensation for Business Losses
    • Has been with Tax and Fiscal Policy Committee since 1/18/2024. Labeled as “Inactive.”
  • SB-295 – Indiana Economic Development Corporation
    • Referred to the House on 2/2/2024.

Current List of Bills 1si Supports or Opposes:

Supports:

  • SB-61 & HB-1345 – Tourism Improvement District
    • SB-61 – The third reading passed on 2/2/2024 and has been sponsored by Rep. Baird and cosponsored by Rep. Karickhoff.
    • HB-1345 has been with the Ways and Means Committee since 1/10/2024 and is considered “inactive”.
  • SB-2 – Child care
    • The first reading was on 2/6/2024 and was referred to the Family, Children and Human Affairs Committee.
  • HB-1165 – Regulatory Sandbox Program and Right to Start Act
    • No major updates: labeled as “inactive.”

Opposes:

  • HB-1157 – Non-Disclosure Agreements in Economic Development
    • No major updates: labeled as “inactive.”

We’ll keep you updated, but if you’d like more information on our 2024 Advocacy Agenda, or to download a copy of it, please visit www.1si.org/advocacy or download your PDF copy here.

Thank You for Renewing Your Membership | January 2024

by with No Comment 1si NewsThank Your for Renewing Your Membership

One Southern Indiana would like to thank the following members for renewing their membership in January 2024.

Quarter Century Club (25 Years or More)Member Since
DMLO CPAs & Advisors – New Albany1972
Greater Clark County Schools1980
Jeffersonville Housing Authority1984
AML Construction1986
Amatrol, Inc.1990
New Albany Floyd County Schools1991
City of New Albany1992
L & D Mail Masters, Inc.1992
Norton Healthcare1994
WesBanco Bank, Inc. 1994
Hurst & Associates, LLC1998
Land-Mill Developers, Inc.1998
Axiom Financial Strategies Group1999
First Harrison Bank1999
  
Ten to 24 Years 
Stephen C. Gault Co.2002
Padgett, Inc.2003
Silver Creek Leather Co., LLC2003
Toby’s Lawn & Landscape2003
RE/MAX FIRST2004
Park Community Credit Union2006
Sheraton Louisville Riverside Hotel2007
Harding, Shymanski & Company, P.S.C.2008
Jack Coffman, Commissioner2008
Mediaura2008
FormWood Industries, Inc.2009
Theresa J. Lamb Insurance Agency, Inc.2009
GHK Truss, LLC2012
Rudy and Associates2013
Silver Heights Camp & Retreat Center2013
Squire Boone Caverns2013
United Consulting2013
Brown-Forman2014
Schimpff’s Confectionery2014
  
Five to Nine Years 
Clarksville Strike & Spare Family Fun Center2015
Clayton & Lambert Mfg. Co.2015
Polaris Travel Experts2015
Down Syndrome of Louisville Indiana Campus2016
Mathes Pharmacy & Homecare2016
Our Lady of Providence High School2016
RE/MAX Pat Harrison Enterprises2016
Zaxby’s – Charlestown Rd.2016
A. Rutz Law, LLC2017
Atlas Technical Consultants2017
BJB Inc.2017
Cunningham Campers, Inc.2017
King’s-Quality Restoration Services LLC2017
Little Star Center, Inc.2017
Personal Counseling Services, Inc.2017
Premier Capital Corporation2017
Republic Services2017
Terracon Consultants, Inc2017
The Breakwater2017
JPAR Aspire2018
Louisville Sports Commission2018
Preferred Meats, Inc.2018
S&ME, Inc.2018
The Floyd County Library2018
Kahl’s Body Shop2019
Masters’ Supply, Inc.2019
  
Two to Four Years 
Lincoln Hills Health Center2020
Lewen Line Construction2021
Magnet Culture2021
Louisville Kwik Dry Total Cleaning2022
Medline Industries2022
Olive Tree Resources2022
Redemption Solar and Roofing2022
Taziki’s Mediterranean Cafe Jeffersonville2022
Twin Interiors, Inc2022
  
One Year 
Access Justice2023
Fistful of Ale2023
Floyd County Parks and Recreation2023
Form G Holdings, Inc2023
Harrison County Lifelong Learning2023
Kosair for Kids2023
Navigate Away Travel LLC2023
Nesco Resource2023
Open Door Youth Services2023
St. Mary’s Catholic Church2023

Welcome New Members | January 2024

by with No Comment 1si NewsWelcome New Members

Welcome new members who joined or rejoined during January 2024.

Economic Update | What is Manufacturing Signaling about 2024?

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 strongest sectors for Louisville Metro last year was manufacturing. Sector payrolls grew by 4.3% over the year, only second to mining, logging, and construction of 8.1%.  Even though manufacturing today makes up a smaller share of total jobs compared to 20 years ago, the importance of the sector remains.   We can often gauge overall growth prospects and economic trajectory based on what is happening in manufacturing.

Louisville manufacturing payrolls peaked at around 96,000 back in 1999. Manufacturing employment then began a gradual decline every year until 2009. That’s when employment was decimated by the Great Recession, plunging to a level of about 61,000. Since that time, manufacturing employment has been on the upswing, with the latest numbers being close to 90,000. Despite the strong recent gains in manufacturing employment, services employment makes up a larger percentage of total jobs compared to 1999. In 1999, 79% of jobs were services related. Today, that number stands at 83%. The largest sector is now education and health services, and employment in professional and business services trails manufacturing by only 1,000 jobs.  In 1999, professional and business services payrolls trailed manufacturing by more than 30,000.    

Nationwide, manufacturing did hit a soft patch last year.  While total payrolls grew by more than 2 million jobs over 2023, manufacturing was just about flat, adding only 14,000 jobs. The ISM Manufacturing Index, a survey measure of manufacturing activity, was under 50 for all of 2023.  An index under 50 signals contraction, and above 50 represents expansion. Nationally, 2023 was a year of manufacturing contraction, as evidenced by year-over-year declines in industrial production.   

Signs are emerging that the nationwide manufacturing chill may begin to warm up, providing further evidence of a recession miss.  The last ISM report came in much higher than expected, and just under 50.  The last national jobs report, which blew all consensus estimates out of the water, showed that manufacturing added 23,000 jobs, exceeding the total number of manufacturing jobs added over 2023. In the last three months, national manufacturing added 56,000 jobs.  The ISM new orders statistic, a survey measure of new orders, had the highest increase since 2020, and is now above 50, signifying growth in new orders. The customer inventories index plummeted to the lowest level since October 2022, suggesting that inventories may be thinning out, a sign of future production in the pipeline. Inventory measures like the inventory-to-sales ratio have remained flat for the past seven months, suggesting that inventories have not grown relative to the level of sales.    While that measure has increased from the pandemic low of 1.1, when inventories were quite scarce, a measure of 1.3 is a historically low number. The current labor market will continue to support consumer spending, and when you compare this to the current state of inventories, national manufacturing may begin to see a steady increase in payrolls. 

We should also expect the same for Indiana and Kentucky manufacturing. Indiana manufacturing saw a decline of 4,000 manufacturing jobs over 2023, and Kentucky was just about flat, adding 2,000 jobs. A good part of Indiana losses likely occurred due to the slowdown in RV manufacturing. The Elkhart-Goshen metropolitan region, the RV manufacturing powerhouse, saw jobs peak in 2022 and have declined since, shedding 8,000 jobs. Over a period of one year, Elkhart manufacturing saw a decline of 10,000 jobs.    

Manufacturing often leads to growth or contraction in the overall economy.  Last year’s expected recession never materialized but manufacturing stalled.  As we begin 2024, manufacturing is now showing signs of growth, adding to the soft-landing argument.  Along with last Friday’s blowout payrolls report, 2024 may be shaping up as another year of steady growth.