Louisville.

• Author: Dufrene, Uric

Southern Indiana and the Louisville metro maintained moderate growth during 2006 and through 2007. Recent employment data, however, point to slowdowns in some sectors. Slower growth was evident in the construction, retail, and financial activities sectors and near-term growth is likely to be affected by any further contraction in the housing sector. Health care, education, and the leisure sectors showed job gains consistent with recent movements in those sectors.

Louisville Metro

The Louisville metro jumped off to a good start in 2007 and generated employment gains higher than the previous year (see Figure 1). Since the first quarter, the metro economy continues to grow in total non-farm payrolls but at a slower rate than recent years. This slower employment growth rate is likely the result of ongoing problems in the housing sector as the housing-related sectors of construction, financial activities, and retail saw declines or slower growth in payrolls. At the time of this writing, the most recent data point to resumed minor growth in construction, continued declines in retail, and significantly lower positive growth in financial activities (see Figure 2). The Louisville metro manufacturing sector saw gains from the previous year during the first quarter, but the third quarter saw continued losses in the manufacturing sector.

The Louisville metro also saw increases in employment in the education and health care sector, as well as in the leisure and hospitality sector. The professional and business services sector continues to increase employment, but at slower rates than in recent years. An indicator of a potential slowdown can be seen in the transportation and utilities sector. Last year, transportation and utilities generated the largest increase in payrolls, but the latest change shows a noticeable slowing.

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Southern Indiana

The most recently available data at the county level also show a deceleration of southern Indiana employment gains. The Quarterly Census of Employment and Wages (QCEW), available for the first quarter of 2007, indicate that southern Indiana metro counties continued the trend of overall job growth, but these gains are noticeably lower than the previous year (see Figure 3).

Housing sector challenges are also evident in southern Indiana metro counties. The construction sector saw declines in 2007 that almost equaled gains from the previous three years combined...