Evansville forecast 2014.

• Author: Khayum, Mohammed

By the end of 2010, real output in the Evansville metropolitan area (metro) reached pre-Great Recession (December 2007 to June 2009) levels. However, six years after the onset of the recession, the Evansville economy remains about 1,000 jobs short of the employment level that prevailed in 2007. During 2013, signs of labor market improvement, increases in personal income and real retail sales, combined with the impact of recent fixed investment provide the basis for projecting that employment will reach pre-recession levels in 2014.

Once all the data are released for 2013, nominal personal income is estimated to have increased by 2.6 percent and real gross metro product is estimated to have increased by 0.5 percent. In 2014, Evansville metro area output is forecasted to increase by 2.1 percent, the number of jobs is projected to increase by 1,400 and the forecast for nominal personal income growth is 5.8 percent.

The unemployment rate in the Evansville metro fell from 8.4 percent in January 2013 to 6.9 percent in August. Nationally, the unemployment rate fell from 8.5 percent to 7.3 percent over the same time period. Job gains occurred in the following sectors: professional and business services, education and health services, and trade. Industries experiencing job losses indude construction, financial activities and information.

Mixed signals are evident in the housing market. Homeowners experienced home price appreciation as existing home prices increased from an average of $96,200 in 2012 to $102,500 by the end of the second quarter in 2013. However, mortgage originations are expected to decrease from $1,182 million in 2012 to $933 million in 2013. Between 2012 and 2013, single-family housing permits are estimated to have increased by 28 percent while personal bankruptcies per 1,000 persons are estimated to have decreased from 5.0 to 4.1.

The manufacturing sector continues to be an important base to metro area household incomes and consumer spending activity even as the economy adjusts to an ongoing diversification away from manufacturing industry dependence (see Figure 1).

As one of the most manufacturing-dependent metro areas in the nation, the Evansville economy was noticeably impacted by the Great Recession. Since 2007, Evansville's manufacturing workforce...