New Albany.

• Author: Faulk, Dagney

In 2002, the economy of Southern Indiana and the Louisville metropolitan area continues to perform better than national economic trends. To date, employment losses and increases in the unemployment rate in the Louisville area have not been as extreme as in other parts of Indiana, Kentucky, and many parts of the U.S. The seven counties in the Louisville Metropolitan Statistical Area (MSA) are Clark, Floyd, Harrison, and Scott counties in Southern Indiana, and Bullitt, Jefferson, and Oldham counties in Northern Kentucky. The following analysis examines various measures of economic growth in the Louisville MSA and its component counties. Three additional Indiana counties--Crawford, Orange, and Washington--in the Southern Indiana labor market area are included when data are available.

Labor Markets

The 2002 unemployment rates in the counties of the Louisville metropolitan area have declined over the year and continue to be below, or even with, that of Indiana as a whole and below that of Kentucky and the United States, as shown in Table 1. Clark and Floyd counties have higher unemployment rates than for the same period in previous years. Unemployment in Harrison County is currently among the lowest in the state, while the unemployment rate in Orange County is among the highest in the state.

Recent data for the Louisville MSA indicate that the average level of non-agricultural employment decreased by about 19,000 jobs between September 2001 and September 2002 (see Table 2). The vast majority of job losses occurred on the Kentucky side of the river. Manufacturing employment decreased by 500 jobs in Southern Indiana and about 1,300 jobs in the MSA. Non-manufacturing employment remains steady in Southern Indiana but decreased significantly (by 17,900 jobs) in the MSA during this period. The MSA job losses in the non-manufacturing sector were led by decreases in the service and retail sectors. Several major retail chains are expanding operations into Southern Indiana, which has kept retail employment steady at around 19,000 workers during 2002.

Recent data from the Indiana Department of Revenue indicate that 36,300 workers commuted daily between Southern Indiana and Kentucky in 2000. This is about 1,200 fewer workers commuting from Southern Indiana to Kentucky than in 1999. The proportion of commuters originating in each county is shown in Table 3.

Wages and Hours in Manufacturing

Manufacturing is the only sector for which wage and salary information is collected for the Southern Indiana area. Average hourly manufacturing earnings in Southern Indiana remain consistently below that of the MSA...