New Albany.

• Author: Dufrene, Uric

During 2006, the southern Indiana economy showed mixed signals. Job growth was up in Floyd and Clark counties, but down in the rural counties (see Figure 1). Manufacturing job losses continued in six southern Indiana counties, but we observed gains in Floyd and Clark. While southern Indiana unemployment rates remained above Indiana and U.S. averages, overall employment and labor force estimates were up compared to September 2005. Recent expansion announcements by local companies should contribute to further gains in the number of jobs. However, a decline in construction investment as a result of the drop in housing permits may contribute to a loss of construction jobs and also dampen retail sector growth and jobs. Signals are mixed, and therefore the outlook for southern Indiana is guarded.

[FIGURE 1 OMITTED]

Labor Markets

The Unemployment Picture: Unemployment rates showed a slight increase in the four southern Indiana metro counties when comparing third quarter 2005 to third quarter 2006. A similar pattern was also observed in the non-metro counties.

On a positive note, labor force participation and the number of employed persons are up across all four southern Indiana metro counties and the four nonmetro counties. Despite the gains in employment, southern Indiana rates continue to hover above state and national averages. The unemployment picture showed an improvement in September 2006, thus signaling a positive trend (see Figure 2).

[FIGURE 2 OMITTED]

Industry Sectors: Of the approximately 1,643 jobs added in the southern Indiana metro counties, from first quarter 2005 to first quarter 2006, Clark County alone was responsible for a net gain exceeding 1,440 jobs.

Job creation in Clark County was again fueled by the retail sector. Almost 700 of the approximate 800 new retail jobs in the four southern Indiana metro counties were added in Clark County, the bulk of these in sporting goods and building materials, with recent additions to the Veteran's Parkway commercial corridor.

Other employment gains in the southern Indiana metro include 144 new construction jobs, 174 in finance and insurance, 443 in administrative, support and waste management, 299 in accommodation and food services, and 113 in public administration. Health care added only 80 jobs, and education was flat. A discouraging number was the loss of 150 jobs in the transportation and warehousing sector.

A net loss in jobs again occurred in the manufacturing sector with the four...