Terre Haute forecast 2019.

• Author: Christ, Kevin

If construction cranes were emblematic of the Terre Haute regional economy last year, this year a more appropriate symbol might be "for rent" signs. Low occupancy rates at new multi-unit residential developments downtown, along with continuing storefront vacancies at newer downtown retail locations, have blunted some of the momentum that was visible in the local economy last year at this time. Moreover, the national trends in the retail sector have affected Terre Haute disproportionately owing to the community's retail-intensive economy.

That being said, there are corresponding bright spots that continue to offer promise for the regional economy. The labor market remains relatively strong, there are a few notable positive signs in local manufacturing, and some major capital projects are injecting vital new investment into the area. Meanwhile, the national trend toward the centralization of health care services has boosted Terre Haute employment. Taken as a whole, however, our sense is that the economic outlook for the area is decidedly mixed.

Riding the national wave

As is true for most of the country, employment news is mostly good, although there are a few ominous clouds on the region's horizon. The slight rise in the region's seasonally adjusted unemployment rate (see Figure 1) probably has more to do with the recent re-entry of people into the local job market than significant new unemployment. Since the spring of 2016, there has been a remarkable uptick in the labor force, which has grown by about 1,400 people and stood at about 78,700 in August. While this is still lower than the steady average of 80,000 to 82,000 that characterized the region's labor market for about 10 years prior to 2010, it is a marked improvement from the post-recession low of 77,300.

Since the area's population has not been expanding, we suspect that this growth in the labor force is mainly due to existing residents responding to the relatively strong economy and re-entering the job market. As they do, however, they are joining a pool of job seekers that is being augmented by notable workforce reductions at Sony and, more recently, Alorica, which in late October announced its intention to close its Terre Haute facility by the end of the year, a loss of about 200 jobs.

Against these ongoing and recent losses are a few gains. The fiber cement siding maker Allura has reopened its 438,000-square-foot plant in the southern Vigo County industrial park, adding about 60...