Muncie forecast 2009.

• Author: Faulk, Dagney

November 2008

Like many small Midwestern cities, the Muncie metro area (Delaware County) struggles to reinvent itself in the face of daunting demographics, the loss of traditional manufacturing jobs, and all the attendant woes of the current recession. Borg Warner's Muncie plant, maker of transfer cases for transmission systems and the last of the giant auto-related manufacturing facilities in Muncie, is scheduled to close in April 2009. Local government has begun to decrease jobs due to tighter budgets. However, as the regional economy braces for movement from traditional manufacturing jobs, there are reasons for optimism. Brevini, the Italian-maker of gear boxes for wind turbine energy generation and other applications, has committed to building a facility by mid-2010 that is projected to create 450 jobs. Ball State University continues to expand its programs and is building a reputation as a high technology university.

Various measures of economic activity are examined for Muncie- Delaware County in this analysis. The data used are from 2001 (the last recession) through the most recent data available at the time of writing. As we face this recession, our goal is to identify and analyze trends since the last recession and changes over the past year. We conclude with a summary of the labor market forecast for the Muncie area.

Labor Markets

The unemployment rate in Delaware County has steadily increased over the past year (see Table 1) although there has been some relief, likely related to the school year, over the past few months. The unemployment rate remains consistently higher (6.6 percent in September) than that of Indiana (5.8 percent) and the nation (6 percent). Figure 1 shows the trend in unemployment for Delaware County, Indiana, and the United States since 2001.

Table 2 shows average employment 2007 through 2008 for the Muncie metropolitan area. (1) Total nonfarm employment was 53,211 jobs, a decrease of 689 jobs (1.3 percent) over the 2007 average. This decline in jobs is substantially smaller than job losses earlier in the decade, but current economic conditions suggest that job losses will continue to increase for the remainder of 2008. The 2008 data through September suggest that trade, transportation, and utilities (TT&U); manufacturing; construction; and government will be the hardest hit sectors. Over the same period, small employment gains occurred in financial activities and private education and health services. The...