Louisville forecast 2019.

• Author: Dufrene, Uric

Despite national GDP growth that exceeded 4 percent, Louisville metro job gains are now the slowest since 2011. A stronger national environment in manufacturing has not produced local gains in this locally important sector, and this helps explain overall slower growth for the metro area. In Southern Indiana, the jobs-producing machine of Clark County has stalled. For 2019, above-average growth is not expected, and pending uncertainty could contribute to continued slower growth regionally.

Louisville payrolls

As of this writing, the Louisville metro added approximately 5,000 payroll jobs, based on a three-month moving average, marking the lowest year-over-year performance since 2011. Through 2018, job growth has not kept pace with changes observed nationally. Except for a few months, Louisville metro year-over-year payrolls growth has consistently been under 1 percent, while national payrolls growth has hovered between 1.4 percent and 1.8 percent (see Figure 1).

Sector growth

Dissecting payroll growth by sector allows one to develop a better understanding of this slower growth. Back in 2011, manufacturing growth exceeded overall job growth for the entire year. Louisville metro payroll growth was weaker as the country continued to recover from the hard recession that ended in 2009. The 2011 growth in manufacturing was on the eve of double-digit growth the following year, and the subsequent stronger growth for the metro area. The present decline in manufacturing began in early 2017. For almost all of 2018, manufacturing has been shedding jobs.

Another large sector, education and health services, is also in negative territory for 2018. Seeing robust growth in 2017, education and health services peaked in the middle of 2017 and has been declining since, with actual job declines since early 2018. Transportation and utilities (transportation being a key cluster for the Louisville region) showed relatively moderate growth over 2018, with the most recent growth lower than overall payroll growth.

Job growth in professional and business services, retail, and leisure and hospitality is exceeding the rate of overall growth in 2018 (see Figure 2). For the most recent data available, growth in both professional and business services and retail is approximately 5 percent, contributing to overall growth. Other sectors, including mining, logging, construction, wholesale trade, government, information and financial activities are showing either negative or...