Muncie Forecast 2021.

• Author: Faulk, Dagney

The factor that has had the largest effect on the local economy over the past year was not even on the radar a year ago: People became conscious of the COVID-19 virus during March 2020 and by the end of that month, local schools--including Ball State University and the seven public school districts in the county--had switched to e-learning. Over the next few months, the governor began issuing executive orders that closed nonessential businesses, limited public gathering and required the wearing of face masks and social distancing in public places. Since mid-May, the economy has slowly been reopening and the number of COVID-19 cases in the county and the state have been increasing. At the beginning of November 2020 (when this article was written), more than 3,400 people in the county had tested positive (out of almost 28,500 people tested) and 85 had died of the COVID-19 virus since the beginning of the pandemic. (1)

Many of the changes in the data discussed in this article stem from the pandemic, which interrupted small gains that had been made over the previous years as the Muncie Metropolitan Statistical Area (MSA) continued to recover from the Great Recession and various structural changes related to dramatic decreases in manufacturing employment over the past several decades. Other trends, such as the decline in retail employment, were further exacerbated by the pandemic.

Highlights from 2020's business news included the increasing vacancy rate at the Muncie Mall: Macy's announced that it would close in January, while later in the year a new management company took over, and JC Penney, the last anchor store, announced that it would close along with at least five smaller stores. (2) AquaBounty Technologies is expecting to harvest its first crop of genetically engineered salmon during the fourth quarter of 2020 and has begun construction of a processing facility at the farm. (3) Exide Technologies, which operates a battery recycling plant in Muncie, was purchased and is expected to continue operations. (4)

COVID-19-related impacts on local businesses include a dramatic decline in the hospitality industry. The downtown Courtyard by Marriott hotel, for example, reported a 10% occupancy rate during the summer--down from about 70% before the pandemic. (5) Ball State University reduced employment by 128 through job cuts and not filling vacant positions. (6) Several local businesses benefited from federal Paycheck Protection Program loans of at least $1 million. (7) The purpose of the program was to assist with the retention of employees during the economic slowdown caused by the pandemic.

This article includes current data from public sources on various measures of economic activity for the Muncie MSA (Delaware County) to analyze changes over the past year. A summary of the labor market forecast for the Muncie area is included in the conclusion.

Labor markets

The Muncie MSA saw a large increase in its unemployment rate, going from 4.2% in January 2020 to 6.1% in September 2020 (see Table 1). The unemployment rate spiked at 16.3% in April during the COVID-19 shutdown and has decreased since then as the economy opened back up. It is still about 3 percentage points higher than the previous September. The Muncie metro continues to see a higher unemployment rate than the state of Indiana. However, the state of Indiana peaked at a higher unemployment rate in April with an unemployment rate of 17% compared to Muncie's 16.3%. The Muncie MSA saw more decreases...