Lafayette forecast 2014.

AuthorHall, Tanya

The year 2013 had a series of mixed employment and economic news nationally and statewide, leading to anticipated languid growth rates. The Indiana Business Research Center (IBRC) has long predicted that 2014 may experience a turning point in these trends. On the other hand, the Lafayette Metropolitan Statistical Area (MSA)--Benton, Carroll and Tippecanoe counties--has had encouraging reports and economic statistics. While the area has not experienced rapid resurgence from the depths of the recession, it has rebounded more quickly than many other areas of the state and maintained steady growth. As we look to the future to determine how 2014 will treat the Lafayette MSA, the area appears poised to continue its growth with announced business expansions, developments and investments in the local economy.

Population

To its benefit, the Lafayette MSA is viewed as an attractive area to live and work, due in part to its proximity to Purdue University. We see this optimism in the continued population growth that is expected for the next few years (see Figure 1). In 2013, the population was estimated to increase 1 percent to 207,946 residents and maintain a 0.9 average annual percent growth each year through 2016. This steady anticipated population growth was consistent with the 2013 forecast and while it is more timid than growth in previous years, it is a step in the right direction.

Labor

Historically, the Lafayette MSA has had a lower unemployment rate than Indiana and the United States. Between August 2012 and August 2013, the Lafayette MSA has outperformed Indiana every month (other than a slight hiccup in July 2013) and stayed closer to the United States' rate most months (see Table 1). The spread in unemployment rates between the Lafayette MSA compared to the state and nation reflects the improved economy in the MSA. Despite the variability in the labor market (measured by unemployment rates, number of individuals employed, in the labor force and unemployed), the Lafayette MSA is seeing a general trend of individuals finding work.

TABLE 1: Unemployment Rates in the Lafayette MSA, Indiana and the United States, August 2012 to August 2013 Year Month Lafayette Indiana United MSA States 2012 August 7.9% 8.4% 8.2% September 6.9% 7.9% 7.6% October 6.9% 7.9% 7.5% November 7.4% 8.1% 7.4% December 7.6% 8.5% 7.6% Annual 7.4% 8.4% 8.1% Average 2013 January 9.2% 9.6% 8.5% February 8.0% 9.3% 8.1% March 8.2% 9.1% 7.6% April 6.8% 8.0% 7.1% May 7.2% 8.1% 7.3% June 8.6% 8.7% 7.8% July 8.4% 8.3% 7.7% August* 6.8% 7.5%...

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