South Bend/Mishawaka and Elkhart/Goshen.

• Author: Joray, Paul A.

In the early 1950s, both the South Bend/Mishawaka and Elkhart/Goshen local economies featured very strong manufacturing sectors. More than half of all employment in both economies was in manufacturing. In the 1960s and 1970s, employment in the South Bend/Mishawaka local economy, like most local economies in the U.S., shifted from manufacturing to non-manufacturing. By 2000, manufacturing employment made up only 16 percent of total employment. In contrast, manufacturing employment in the Elkhart/Goshen economy, led by the recreational vehicle and manufactured housing industries, continued to grow as fast as non-manufacturing employment. In 2000, manufacturing employment made up 51 percent of total employment, the highest percentage of any metropolitan statistical area in the U.S. Table 1 shows average unemployment rates and uses seasonally adjusted index numbers to show average levels of employment for the years 1995 through the first half of 2002. Figure 1 indicates the trends mentioned above were continuing until 2002, with manufacturing employment in South Bend declining 2.7 percent from 1995 through 2000, and manufacturing employment in Elkhart growing 9.8 percent during the same period. Recently, manufacturing employment has declined in both local economies.

[FIGURE 1 OMITTED]

The South Bend/Mishawaka economy performed well from 1995 through 2001 but started to decline significantly in the first quarter of 2002. Total employment grew slowly from 1995 through the first quarter of 2001, increasing by 13 percent during this period. It leveled off for the rest of 2001 before declining sharply in January 2002. Non-manufacturing employment increased slowly from 1995 through the second quarter of 2001, growing by 16 percent, before declining in the third and fourth quarters. Manufacturing employment was up and down depending upon the national economy and the specific situations facing local firms. The recent recession at the national level is reflected locally by a nearly 9 percent drop in total employment, a 14 percent drop in manufacturing employment, and a nearly 5 percent drop in non-manufacturing employment from March 2001 to January 2002. Manufacturing employment has increased by 5 percent and total employment has increased by 2.3 since January 2002. Unemployment rates dropped from an average of 4.3 percent in 1995 to 2.3 percent in 1998 and remained at very low levels until the recent recession. The local labor market was very tight...