South bend and Elkhart area forecast 2014.

• Author: Agbetsiafa, Douglas

The South Bend-Mishawaka MSA and Elkhart-Goshen MSA recovered much of the losses in production, per capita income and real wages since the Great Recession ended. Although total employment levels have improved in the two MSAs, they remain significantly below pre-recession levels. The sharp decline in the region's labor force has abated, and unemployment rates fell below recession levels.

Real Metropolitan GDP

The good news is that the combined size of the local economy -- the South Bend-Mishawaka MSA and Elkhart-Goshen MSA -- measured by its real metropolitan gross domestic product (RGDP) was $4.1 billion higher in 2012 (an increase of 24 percent) than its low in 2009. (1) Separately, the Elkhart-Goshen MSA grew by $3 billion (45 percent) while the South Bend-Mishawaka MSA grew by $1 billion (9.6 percent) from their respective recession lows. The combined production level for the region was nearly half a billion dollars (-$586 million) below its pre-recession 2007 level. Despite its spectacular recovery, the Elkhart MSA's RGDP remained more than a half-billion dollars below the 2007 pre-recession level, while the South Bend-Mishawaka MSA's RGDP was more than $150 million above its 2007 level.

Labor Force and Employment

The earlier sharp decline of the local economy's labor force slowed down significantly (see Figure 1). In July 2013, the combined labor force stabilized at 217,771 workers, after steadily declining from the record 2006 high of 245,480 workers. (2) As a result, the region's combined labor force in July 2013 was 27,709 workers smaller than its July 2006 level and 941 workers lower than its July 2012 level. The year-over-year numbers show the Elkhart-Goshen MSA gained 444 jobs in July 2013, while the South Bend-Mishawaka MSA lost 1,120 jobs. This is mainly due to the different rates of economic recovery in the two MSAs From July 2012 to July 2013, total employment for both areas increased from 196,722 workers to 197,770 workers. Meanwhile, the Elkhart-Goshen MSA added 444 jobs while employment in the South Bend-Mishawaka MSA fell by 1,120 workers during the same time period.

Unemployment

As the local economy recovered, the number of people unemployed fell and unemployment rates declined in both areas. The number of unemployed plunged 18 percent and 8.3 percent in Elkhart-Goshen and South Bend-Mishawaka MSAs, respectively. The very strong recovery in the Elkhart-Goshen MSA drove its unemployment rate down to 7.7 percent in August...