In the aftermath of the Great Recession, which lasted from December 2007 to June 2009, a growing body of research has documented the importance of household debt in explaining the trajectory of economic activity leading up to and during that economic downturn. Areas where households were heavily indebted relative to their income when the recession started experienced sharper declines in consumption and employment. The Federal Reserve has published interactive maps allowing users to explore the debt-to-income ratio by state, metropolitan statistical area and county for each year since 1999.
In the Evansville Metropolitan Statistical Area (Evansville MSA), the debt-to-income ratio increased from 0.794 to 1.137 between 1999 and 2018. During the time frame of the Great Recession, the debt-to-income ratio declined from 1.297 to 1.159. This was accompanied by declines in household spending, employment and output.
During 2019, relatively strong growth in both the transportation and warehousing and management of companies and enterprises sectors--combined with increases in personal income and announcements of future fixed investments--provide the basis for projecting increased employment, output and income in 2020.
Announcements in 2019 that will boost economic activity in the Evansville region in 2020 include a $1.3 billion expansion/upgrade by Toyota Motor Manufacturing, Indiana, Inc. to its plant in Gibson county, a solar project for the Evansville Airport to cover the entire short-term parking area, a $6.6 million foam packaging project at the Vanderburgh Industrial Park, a $30 million pilot plant at SABIC Innovative Plastics, and the $25 million to $30 million redevelopment of the 5th and Main Tower building in downtown Evansville. In addition, developments in the health care sector, such as the opening of an orthopedic hospital in Warrick County and a new clinic on the campus of the Stone Family Center for Health Sciences (which includes a focus on clinical research in partnership with the Indiana University School of Medicine), will serve to strengthen the significance of this sector as a driver of future economic activity and quality of life enhancements in the Evansville MSA.
Once all data are released for 2019, nominal personal income is estimated to have increased by 4.0 percent and real gross metro product is estimated to have increased by 2.2 percent.
In 2020, Evansville metro area real output is forecasted to increase by 1.3 percent...