South Bend and Elkhart forecast 2021.

• Author: Zhuang, Hong

Due to the unprecedented COVID-19 pandemic, Indiana announced a statewide lockdown to contain the virus in late March and then eased the restrictions beginning in May. As a result, the local economy, which consists of the South Bend-Mishawaka and Elkhart-Goshen metropolitan statistical areas (MSAs), was severely affected by the pandemic in 2020. Gross domestic production (GDP) of both areas dropped dramatically in April and May, but has rebounded since June 2020. (1) Both areas also saw a sizable decline in their labor force, sharp falls in employment, and dramatic rises in unemployment in 2020. However, the local cost of labor continued to rise during the pandemic period. The St. Joseph housing market slowed down the pace of new home construction, whereas existing home sales remained virtually unchanged with a higher median sales price.

Labor force and employment

According to the household survey data from the U.S. Bureau of Labor Statistics (BLS), the combined region's average labor force, which includes the South Bend-Mishawaka and Elkhart-Goshen MSAs, fell by 6,964 in January-August 2020 to 267,953 (as compared to the same time period in 2019). (2) The monthly trends of the labor force and employment of the combined region are illustrated in Figure 1. (3) In particular, the labor force declined in both areas--by 3,244 in South Bend-Mishawaka and 3,720 in Elkhart-Goshen, respectively.

The combined region's average monthly employment was 242,395 in 2020, declining by 8.5% over the year. The loss of jobs was 12,290 (-7.9%) in the South Bend-Mishawaka MSA and 10,331 (-9.4%) in the Elkhart-Goshen MSA. Both MSAs suffered a higher rate of loss in their employment than the national and state data. From 2019 to 2020, the U.S. saw employment fall by an average of 6.4%, and Indiana saw its employment fall by 6.0%.

Unemployment

Figure 2 displays the unemployment rates in the South Bend-Mishawaka and Elkhart-Goshen MSAs from January 2000 to August 2020. The average monthly unemployment rate of South Bend-Mishawaka soared to 9.7% in 2020, 5.9 percentage points higher than the average unemployment rate in 2019. Similarly, the average jobless rate in Elkhart-Goshen rose to 9.2% in 2020, 6.0 percentage points above the 2019 unemployment rate. For both MSAs, these are the highest unemployment rates since 2012. The April unemployment rate, after the statewide lockdown order was issued March 23, 2020, reached 21.2% in the South Bend-Mishawaka MSA and 28.6% in the Elkhart-Goshen MSA, which were the highest rates and the largest over-the-month increases in the history of the series (unemployment rate data are available back to January 1990).

Employment by industry

The Current Employment Statistics (CES) data (see Table 1) show that the total monthly nonfarm employment in South Bend-Mishawaka declined significantly by 10,888 in 2020, approximately 7.6% lower than that in 2019. (4) Employment was down in all major industry...