Louisville forecast 2020.

• Author: Dufrene, Uric
• Position: Louisville, Indiana

The outlook for 2019 was not on the overly optimistic side. Slower growth nationally and a continuation of local payrolls trailing the national pace were expected. During the last quarter of 2018, job gains in the Louisville metro came to a halt. This was the weakest quarter of payroll gains since 2010. Since then, job gains have resumed, but at a rate that continues to trail the national economy. The outlook for 2020 expects a pattern like 2019. Expect job creation for the Louisville metro to trail the nation, but with a higher rate now expected in Southern Indiana.

Louisville metro payrolls

For 2019, the Louisville metro will surpass job gains from 2018. The Louisville metro added approximately 5,000 jobs over the year in 2018, compared to about 7,600 jobs in 2019, based on a three-month rolling average of year-over-year payrolls. While we are seeing slight improvement from last year, the Louisville metro continues to lag national payroll growth (see Figure 1).

Sector growth

Despite a weaker national manufacturing environment, 2019 showed some improvement for the Louisville metro. Manufacturing job growth was exceeding overall job growth and on pace to beat last year. However, the second half of 2019 showed a rapid decline in manufacturing payrolls. Based on current national indicators in manufacturing, this sector is not expected to contribute to significant job gains for 2020.

The strongest sector was education and health services, adding almost 3,000 jobs since last year. Mining, logging and construction also showed strong percentage gains, with an absolute change of approximately 2,000 jobs. Leisure and hospitality emerged from losses early in the year to positive territory. The professional and business services sector has been shedding jobs for the entire year, down approximately 2,000 since last year. Retail job growth began to trail overall job growth in the beginning of 2018. It has been under overall payroll growth since then, and registered negative changes through all of 2019. This is counter to the strong retail gains of 2016 through 2017 (see Figure 2).

Stronger job growth in 2020 will be linked to the success of professional and business services. Watch this sector for early clues on the ultimate record for 2020.

Southern Indiana

Payroll growth in Southern Indiana (including Clark, Floyd, Harrison, Scott and Washington counties) just about came to a stall in 2018, registering job growth that was the weakest since 2011 (see...