Richmond-Connersville-New Castle.

• Author: Veramallay, Ashton I.
• Position: Optimistic outlook for 2001 - Brief Article - Statistical Data Included

National economic conditions have far-reaching repercussions on the Richmond-Connersville-New Castle (RCNC) area economy because of its interdependence with the U.S. economy. The anticipated 2001 national growth rates for real GDP (3.5 percent), inflation (2.7 percent), unemployment (4.2 percent), and disposable income (3.3 percent) will generate positive effects on the local economy.

The manufacturing sector, having recovered from the Asian and Latin American crises, is holding steady. There is softness, however, in durable goods manufacturing, particularly in machine tools and heavy trucks, because of the slowdown in economic activity. The dollar's depreciation will provide a stimulus by making American goods less expensive to foreigners and will boost local exports. Rapid growth is expected in a major part of the global economy especially among our trading partners. Manufacturing activity accounts for at least 25 percent of RCNC's employment and is expected to accelerate in 2001 as firms expand and new firms enter into the region. Manufacturing remains the key player in RCNC's economic base.

Employment growth in Wayne, Fayette, and Henry counties was moderate in 1999. The numbers of employed workers in 1999 were 36,580,10,440, and 23,180 respectively for the three counties, and the unemployment rates were 3.5 percent, 5.1 percent and 4,1 percent respectively. Those unemployment rates were higher than the statewide rate of 3 percent, but were lower, except in Fayette county, than the national rate of 4.2 percent (see Figure 1). Fayette county led the pack given its high manufacturing intensity and the downsizing at Roots/ Dresser Industries. The employment front in RCNC would improve in the coming year, especially with the DaimlerChrysler modernization plant investment of $77 million and the opening of super stores, WalMart and Lowe's, New Castle Correctional Facility, and Flying J truck stop. There are also internal business expansions at Chatsworth Products, Custom Extrusions, Draper Shade, Inland Buildings, and Stant. The bus company, Carpenter, is closing in Richmond, which clouds the employment picture with a loss of over 300 good-paying jobs. RCNC's absorptive capacity may be inadequate to replace such jobs in the near term.

[Figure 1 ILLUSTRATION OMITTED]

The slow job growth in manufacturing, along with the loss of temporary decennial census workers, was offset by gains in services. The service sector, in contrast, is experiencing...