Lafayette forecast 2019.

• Author: Hall, Tanya
• Position: Statistical data

The Lafayette Metropolitan Statistical Area (MSA) enjoyed another year of continuous growth. In 2018, most industries experienced both employment and wage increases, and the region maintained low unemployment rates. The tightening housing market may cause affordability to be an issue within the region if relief does not occur via new construction. Likewise, economic growth could be hampered by lack of labor as area employers continue to expand.

The Lafayette MSA (which includes Tippecanoe, Benton and Carroll counties) has experienced steady population growth since 2000. The MSA's strong and diverse economy fuels much of the growth and shows no signs of stopping anytime soon. These strengths coupled with its geographic location have made this MSA an attractive area to live and work.

Since 2000, the MSA population has gained roughly 42,200 residents, a sustained growth of nearly 2,300 individuals per year (see Figure 1). The Indiana University Center for Econometric Model Research anticipates annual population growth of about 1,900 in the region through 2019, with the MSA experiencing a 2019 population of 223,063 individuals.

Labor

The sustained population growth coupled with a strong economy is producing a metro area that is eager to employ workers, as reflected in its low unemployment rate. The Lafayette MSA's unemployment rate remained lower than the U.S. and Indiana rates between September 2017 and September 2018 (see Table 1). Last year's outlook predicted the MSA would see unemployment rates hovering around 3 percent. The rate did dip below 3 percent several times and topped out at 3.6 percent in June and August. In 2019, the local unemployment rate will likely mirror the 2018 activity as individuals moving/commuting to the area are able to find jobs and employer demand has no signs of abating. Thus, the Lafayette MSA labor market will continue to be very competitive.

The year-over-year comparison between September 2017 and 2018 reflects a 4,452 increase in the labor force and a reduction of 275 workers from the unemployment rolls. Compared to the 2016-2017 changes, this past year had very strong labor market growth--signaling the MSA's ravenous appetite for new workers. Last year's Lafayette outlook expressed a need for the region to attract new workers as signs were pointing to a very tight labor market. The region is likely still needing additional workers as new economic development growth announcements occur on a regular basis in a wide array of sectors.

Table 2 looks specifically at regional employment between 2017 and 2018 in the Lafayette MSA. During 2018, the MSA experienced a 2.0 percent uptick in employment, or nearly 2,100 jobs. The bulk of the gains came from goods-producing industries, with manufacturing adding 878 workers (or 4.9 percent growth). Four industries experienced minor declines: information; trade, transportation and utilities; financial activities; and private educational and health services.

As of September 2018, the top three employing industries in the Lafayette MSA...