Last year's outlook forecasted "job gains, but at a slower pace than in recent years" in 2016. The Louisville metro ended 2015 with an above-average addition of nearly 20,000 jobs, but as of August 2016, the year's job gains are off from previous years. As we approach the second half of the year in data availability, Louisville added approximately 4,800 jobs as of August, which is below the average August-to-date job gains of 9,800 over the past three years. As we approach 2017, we expect job gains to accelerate once again, and 2017 will be another year with impressive job growth. Southern Indiana counties should see strong job gains as River Ridge continues to develop and both the downtown and East End bridges finally open.
The U.S. economy saw slower growth during the first half of the year, evident through lower gross domestic product (GDP) growth numbers. This slower national growth also shows up in slower Louisville metro payroll gains for the first half of the year (see Figure 1).
Sector payroll employment changes are mixed. Both retail and education and health services saw significant gains over 2016 and continue to increase, but the retail sector is now showing significant deceleration from earlier in the year (see Figure 2). Professional and business services, along with leisure and hospitality, also experienced a slowdown in growth, adding to the overall moderation in job gains for the Louisville metro.
However, as the national economy expands in 2017, both professional and business services and the local leisure and hospitality sectors will return to stronger growth in the metro area. The professional and business services sector is already beginning to accelerate compared to overall payroll growth.
U.S. manufacturing experienced slower growth at the start of the year, but this is not evident in regional manufacturing growth. Regional manufacturing payrolls did slow down earlier in the year, consistent with national manufacturing. However, manufacturing sector growth was slightly above overall payroll growth. Over the second half of the year, manufacturing is now accelerating once again, with a pace that exceeds overall job growth. An expanding regional manufacturing sector will be expected to contribute favorably to overall metro job growth.
Southern Indiana (Clark, Floyd, Harrison, Scott and Washington counties) saw impressive payroll gains over 2016. The fourth quarter of 2015 saw a record addition...