Louisville forecast 2022.

• Author: Dufrene, Uric

Last year's outlook expected Louisville metro payrolls to erase job losses by the end of 2021. However, the emergence of the unknown delta variant, record-breaking job openings and supply chain challenges managed to delay the relatively optimistic outlook of last year. Despite these headwinds, the Louisville metro appears to be heading toward the recovery of almost all job losses by year's end. For 2022, the Louisville metro will see payroll growth in the 2%-3% range. Key to this outlook is that employers are able to successfully fill job openings. Growth in manufacturing, robust consumer activity, and an expanding leisure and hospitality sector all contribute to this favorable outlook.

Louisville metro jobs

As of September 2021 (year-to-date), the Louisville metro added approximately 17,500 jobs. (1) If the metro area remains at this same pace of growth for the last quarter of 2021, total jobs added should come in at approximately 23,000 jobs, putting the percentage gain at 3.6% for the year. National economic growth is expected to decelerate, and this should lead to a deceleration in Louisville payroll growth from 2021. Consequently, Louisville metro payroll growth will likely be in the 2%-3% range for 2022.

Manufacturing

Manufacturers should expect a strong year. Nationally, the inventory-to-sales statistic remains at low levels. Both new orders and unfilled orders continue to run high. The combination of new and unfilled orders and a lean inventory-to-sales ratio will translate to sustained production for manufacturing. Materials shortages and supply chain challenges that have plagued manufacturers this past year should show some improvement, although they will not be entirely resolved. This will provide a boost to local area manufacturing. Expected increases in labor market participation and a growing labor force will also support manufacturing payroll growth. Louisville area manufacturers added approximately 2,300 jobs, as of September year over year, (2) and should expect to exceed this amount next year.

Leisure and hospitality

The much-anticipated growth in leisure and hospitality hit a few roadblocks due to the emergence of the delta variant. Spending on services should continue to rebound as the sector moves past delta, and leisure and business travel will see gains. As a result, convention activity in Louisville should also continue to rebound, providing a boost to leisure and hospitality employment. Remote work arrangements will...