Muncie.

• Author: Smith James C.
• Position: Economy continuing to shrink - Brief Article - Statistical Data Included

For at least 30 years, Muncie has been slowly shrinking in terms of its role in the Indiana state economy.

In 1970, people working in the Muncie metropolitan area enjoyed an earnings level that was 2.4% of all Indiana earnings (see Figure 1). By 1998, the most recent year for which the U.S. Bureau of Economic Analysis has published local data, the Muncie area's share of state earnings had sunk below 1.8%. Of the 11 metropolitan areas in Indiana, only Gary-Hammond lost more of its share of state earnings over this period than did Muncie.

[Figure 1 ILLUSTRATION OMITTED]

This slide is reflected in the population of the Muncie metro area, which includes all of Delaware County. During the decade of the 1990s, according to U.S. Census Bureau estimates, Muncie was the only metro area in the state which actually lost population. In the 1990 census, Muncie's population was 119,659. By 1999 the population had drifted down to an estimated 115,472. Bloomington passed Muncie in size in 1998, making Muncie the second smallest metro area in the state, just ahead of Kokomo.

Barring a major unforeseen event, this pattern of unchanged or slightly declining economic activity will be Muncie's fate in 2001 as well. As the rate of economic growth eases across the nation, the heavy manufacturing that is a major part of Indiana's economy is likely to slow more than other sectors as consumers postpone big-ticket purchases. As its share of the state clicks down another notch, the Muncie area is likely to taper off more than the state average in several areas.

The effects of lower sales of durable goods will be seen clearly in the Muncie area. Without a growing residential population to offset the general economic slowing, Muncie's housing construction industry will retrench significantly. The U.S. automobile business already has slipped from its record levels in early 2000, and car sales in Muncie for 2001 will drop even further below last year's figures.

Economic activity in the state of Indiana has typically generated about 50,000 new jobs a year for the past several years. During this same period, the net gain in jobs each year in the Muncie metro area has been essentially zero. The U.S. Bureau of...