Kokomo forecast 2009.

• Author: VanAlstine, Jason

November 2008

Recent news from the Kokomo manufacturing sector has not left much room for optimism. Two of the area's largest employers have recently announced large layoffs that could have a significant impact on the area. In addition, a GM/Chrysler merger could lead to substantial job losses in Kokomo. Recent employment increases in the education and health services sector will not be large enough to make up for the local impact of manufacturing cutbacks.

Jobs and Unemployment

In recent months, Kokomo's unemployment has increased substantially. Since January, the lowest reported unemployment rate was 6.7 percent (February and April). In July, the unemployment rate peaked at 9.2 percent. Last year's annual unemployment rate was 5.4 percent. Kokomo has also had a higher unemployment rate than the state of Indiana in all years since 2000 (see Figure 1). For January through September, Kokomo's average monthly unemployment rate has been 2 percentage points higher than the state average. Area employment figures have also been declining the last ten years, indicating a decreasing number of job opportunities in the Kokomo area (see Figure 2).

[FIGURE 1 OMITTED]

Average annual wages have been on the rise, increasing by 3.4 percent from 2006 to 2007 to total $48,844. This is outpacing the inflation rate, which over that time period was 2.5 percent nationally. However, this information conflicts with more recent data on average weekly wages. In the first quarter of 2008, average weekly wages were $852, decreasing in three consecutive quarters from the $988 per week record for the second quarter of 2007.

Howard County's economy is still very dependent upon the manufacturing sector, particularly the automotive manufacturing industry. The manufacturing sector makes up approximately 30 percent of Howard County's overall employment figures. Other important sectors in the Kokomo economy include health and educational services (15 percent of total employment) and retail (13 percent of total employment). This past year's decrease in employment has been particularly difficult for the manufacturing sector with losses of almost 2,000 jobs (a 14 percent decrease). One bright spot was the growth in the health and educational services sector, which saw a 5 percent increase in overall employment from 2006 to 2007.

[FIGURE 2 OMITTED]

The Automotive Industry

Two of Kokomo's largest employers, Delphi and Chrysler, belong to the automotive manufacturing sector. These...