South bend and elkhart area forecast 2012.

• Author: Agbetsiafa, Douglas

The Michiana region, comprised largely of the South Bend-Mishawaka and Elkhart-Goshen metropolitan statistical areas (MSAs), continues to recover from the significant setbacks resulting from the 2007-2009 recession. We expect the recovery to continue in 2012 but at a slow pace.

Gross Domestic Product

The combined local real gross domestic product (RGDP) was $19.45 billion (in chained 2001 dollars) in 2010. Separately, the 2007-2009 recession caused Elkhart-Goshen MSA's RGDP to contract 15.3 percent, while the South Bend-Mishawaka MSA shrank by 6.9 percent. By the end of 2010, and with RGDP of $8.81 billion, the Elkhart-Goshen MSA grew 13 percent, while the South Bend-Mishawaka MSA area ($10.65 billion) grew about 1 percent from the previous year. By the end of 2010, the Elkhart-Goshen area experienced the largest upturn in RGDP growth in the nation. Thanks to a strong recovery in the metro's durable goods manufacturing, it went from a 15.3 percent decline in 2009 to 13 percent growth in 2010--an impressive gain of 28.3 percentage points. The South Bend-Mishawaka metropolitan area's RGDP grew about 1.0 percent in 2010 after declining 6.9 percent in 2009--a turnaround of 8 percentage points. Overall, the size of the local metropolitan economies, while higher in 2010 than its level in 2009, remained $1.1 billion (in chained 2001 dollars) below pre-recession levels.

Labor Force and Employment

The local labor force continued to decline but at a slower rate, with a decline of about 1,500 between September 2010 and September 2011. This is compared to a drop of 6,500 workers between September 2009 and September 2010. This improvement is unevenly distributed between the two metropolitan areas. From September 2010 to September 2011, the South Bend-Mishawaka MSA labor force declined by 60 people, while the Elkhart-Goshen MSA labor force fell by l/434. (1) Combined employment for both metros fell by 1,400 from 239,700 jobs in September 2010 to 238,300 in September 2011. The Elkhart-Goshen MSA lost 1,800 jobs, while the South Bend-Mishawaka MSA gained 500 more jobs during the same period. However, between the first quarter of 2010 and the same quarter of 2011, the Elkhart area had the largest percent gain in the nation (6.2 percent).

Figure 1 shows metropolitan unemployment rates for 1990 to 2011. For both MSAs, the unemployment rates continued to fall since peaking in 2009. These rates were lower by the third quarter of 2011 than they were in 2009. The...