Louisville forecast 2021.

• Author: Dufrene, Uric

The year 2020 will go down as a year that observed both the steepest job losses and largest gains for the Louisville metro. April saw unprecedented job losses due to pandemic-induced shutdowns. In the months following, job gains have been strong relative to normal economic conditions, but have yet to fully recover from the massive job losses in the first half of the year. In 2021, we will see additional job gains, and the region is expected to fully recover job losses by late 2021. In sum, the outlook is optimistic for the Louisville metro.

Louisville metro payrolls

April represents the bottoming of the 2020 recession. The Louisville metro saw job losses of 123,000 from the pre-recession February high of 681,500 to the April recession low of 559,300. The April total is equivalent to the level of jobs that existed in April 1996. From May to June, the area quickly recovered 41,000 jobs, the largest gain going back to 1991. Since that time, month-over-month job gains are decelerating, but remain higher than historical month-over-month gains. Year-over-year job losses are now slightly higher than the deepest level that existed during the Great Recession.

Sector growth

Job losses and subsequent gains were primarily concentrated in manufacturing, leisure and hospitality, retail, professional and business services, and education and health services. In April, these five sectors had combined year-over-year job losses of 91,300--with more than a third of losses occurring in leisure and hospitality. As of September 2020, these five sectors had year-over-year combined losses of 23,600, a considerable improvement from April. Other sectors also saw losses, but the magnitude was not as large due to their smaller sizes.

We expect growth across all sectors to continue into 2021, inching the region to a level that will erase all job losses by later 2021.

Southern Indiana

The year 2019 began with a very strong quarter for Southern Indiana, gaining 1,900 jobs and making it the strongest year-over-year job growth since 2016. Unfortunately, job gains over the rest of 2019 were subdued; one quarter showed negative growth from the previous year. With the nation's recession beginning in the first quarter of 2020, the region saw a small decline in jobs and no growth from the previous year. Manufacturing, retail, accommodation and food services, and health care and social services saw the largest declines. Transportation and warehousing showed sizable gains. Clark...