The Herald Bulletin

Morning Update

Local Business

November 20, 2012

Stormy skies continue for local economy in 2013

County isn’t keeping pace with gains around state, professor says

ANDERSON, Ind. — The county’s stormy economy isn’t clearing up anytime soon.

That’s according to a 2013 economic forecast, presented at Tuesday’s Rotary Club luncheon at Anderson Country Club. Anderson University professor Emmett Dulaney delivered the local outlook, which is “not kind to Madison County,” he said.

Dulaney, who writes a weekly business column for The Herald Bulletin, focused on three facets of the local economy: employment, education and housing.

The first, he said, is characterized by slow improvement that fails to keep pace with the rest of the state.

Madison County’s jobless rate fell 1.5 percent — from 10.5 percent to 9 percent — between January and September of this year. Indiana’s jobless rate was 7.5 percent in September, and the Indiana University Kelley School of Business predicts the state will end 2013 at around 7 percent.

But it’s “very safe to say that unemployment will continue to hurt the local economy for several more years,” Dulaney said.

The city has made 10 jobs announcements so far this year, totaling around 1,100 new projected jobs, but “we haven’t added them to the payroll just yet,” Dulaney said. To make matters worse, the county is below average for salaries in every category, he said.

Looking forward, he said, focus should be on fostering entrepreneurs and small businesses — 72 percent of the county’s employers have fewer than 10 on the payroll — and on encouraging collaboration over competition.

The second facet of the local economy, education, isn’t much better off.

In response to poor school performance reports — eight of 33 county schools graded by the state earlier this year received D marks or lower — some parents have used tuition transfers. That’s only part of the county’s brain drain problem, he said, considering only 17 percent of area residents have a four-year degree.

That could be part of the reason for the high jobless rate, he said, because “we can only attract high value-added jobs if the workforce is properly educated.”

Programs like the Madison County Education Coalition could help, he said, as they strengthen the “linkage between economic development and education initiatives.” He said the county should also explore forgivable loans which are an incentive for “graduates to stay in the area and increase the base.”

The last facet, housing, isn’t much better. The county handed out only about 15 percent of the single-family home permits this year than it did 10 years ago.

But on the plus side, the housing market seems to have bottomed out and prices and new homes construction are on the rise, according to the IU outlook.

There aren’t many new homes being built in Madison County, Dulaney said, which should be good news for existing home prices.

But those prices will tick down if the number of commuters increases, “unemployment increases, or other options appear more attractive,” he said.

Find Baylee Pulliam on Facebook and @BayleeNPulliam on Twitter, or call 648-4250.

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