Kokomo Forecast 2021.

• Author: Krabbenhoft, Alan G.

This annual article provides an overview of various statistics reflecting the well-being of the 14-county service region for Indiana University Kokomo. (1) Given both IU Kokomo's location and Kokomo's prominence as one of the largest cities in the region, this article more heavily focuses on Kokomo and Howard County. Many of these same factors impacting Howard County similarly impact other areas of the service region.

The economy of central and north-central Indiana continues to be highly dependent on two major sectors. Manufacturing is the largest, with as much as one-third of the region's employment and productivity. Much of this stems from automobile or transportation manufacturers or those in the supply chain. The manufacturing sector significantly impacts the well-being of our region because of its sheer size and the relatively high wages it provides.

The other sector with a vital role in this region is agriculture, as much of the region is committed to growing crops and, to a smaller extent, raising livestock. The number of jobs associated with the agriculture sector pales in comparison to other sectors, especially manufacturing. However, agricultural production serves the needs of the region and other parts of the country and the world. With growing conditions being highly variable, production and prices are subject to considerable fluctuation and year-to-year changes are critical to the region. We will review planted and harvested acreage, crop yields, total production, and crop prices per bushel for corn and soybeans for the state (since data are not provided on a county-level basis in the U.S. Department of Agriculture monthly report). In terms of livestock, we focus here on hog production.

Unemployment

The forecast in last year's article was relatively spot on for the remainder of 2019 and at least the first three months of 2020. What could not be foreseen was COVID-19 and the tremendous economic disruption it has caused. In March and April, when much less was known about the virus, many states, including Indiana, took drastic measures and virtually shut down all aspects of the economy. Exceptions were made for those businesses deemed essential, but manufacturers, retailers, restaurants and many other businesses were abruptly shut down. With the economy at a standstill, unemployment rates skyrocketed. While rates for the U.S. and Indiana rose to approximately 15%, Howard County had the unenviable position of having the highest unemployment rate in the state at 33.5% (see Figure 1). While the magnitude of the county's single-month increase is incredible, it is hardly surprising given the county's heavy dependence on Fiat Chrysler Automobiles (FCA). When the casting and transmission facilities shut down, roughly 8,000 workers were unemployed.

The precipitous rise in April's unemployment rate has been followed by a substantial and sustained reduction. In September 2020, Howard County had an unemployment rate of 7.3%. While higher than the Indiana rate, it is below that for the...