EVANSVILLE —The Evansville metro area's economy was among the first in the state to soften in the recent economic downturn, but Evansville will also be the first area in the state to return to precession peak employment, according to a U.S. Conference of Mayors report.
The annual U.S. Metro Economies report states the Evansville metro area, which includes portions of Kentucky, hit its employment peak in the fourth quarter 2005 and then lost 11,200 jobs (6.2 percent of total local jobs). The area is expected to return to peak employment in the first quarter 2013.
The reports states different parts of the state varied widely in how much they were affected by the recent recession, and Evansville was less affected than many other Hoosier communities.
Local observers say they're not sure why Evansville hit its employment peak so early, but they say there are good reasons that Evansville weathered the recession relatively well.
"We've been relatively stable," said Greg Wathen, president and chief executive officer of the Economic Development Coalition of Southwest Indiana.
Evansville Mayor Jonathan Weinzapfel agreed.
"Frankly, it's consistent with other anecdotal evidence I've seen," the mayor said.
The percentage of job losses ranged from 4.5 percent in Bloomington to 29 percent in Elkhart/Goshen.
Lafayette is predicted to have the shortest time from peak to peak — four years, nine months.
South Bend/Mishawaka, Kokomo and Anderson, on the other hand, are predicted to take at least 16 years and nine months to recover. For these three markets, and five others around the state, a return to peak isn't predicted to occur until after 2021.
The report's employment and job loss figures came from the federal Bureau of Labor Statistics. "Return to peak employment" predictions were based on both historical data and analysis by IHS Global Insight, the research firm that produced the report.
Weinzapfel and Wathen, along with a local economics professor, cite numerous factors that helped cushion the recession's local blow.
For one thing, they say, Evansville's economy is relatively diverse. That means that if one industry tanks, it won't devastate the entire local economy. And if a diverse economy does lose jobs, it has more options for finding new jobs.
"We've got a well-diversified employment base. It used to rely heavily on manufacturing, but no more," said Sudesh Mujumdar, an associate professor of economics at the University of Southern Indiana.
Manufacturing represents about 16 percent of non-farm employment in the Evansville area, Mujumdar said. In comparison, education and health care combined account for about 22 percent of local nonfarm jobs. And incidentally, Mujumdar said, health care and education are among the sectors of the economy that are predicted to grow.
Bob Tomarelli of research company IHS Global Insight, agreed.
"If an economy's diversified ... that's going to fare better in terms of regaining its peak levels sooner."
Evansville's relative isolation also may have helped it in the recent recession, Wathen said.
Wathen pointed to metro areas like Anderson and Columbus, which are influenced by Indianapolis' larger economy. So if those smaller areas struggle, they may lose more ground to Indianapolis, he said.
Indianapolis/Carmel lost 6.1 percent of its jobs in the recent recession and is expected to return to peak employment in the second quarter of 2013. Columbus lost 10.9 percent of its jobs and is expected to return to peak in the second quarter of 2017. Anderson lost 9.6 percent of its jobs and is expected to return to peak sometime after 2021.
"If I'm in Anderson or I'm in Columbus and things are going bad, I may just gravitate toward Indianapolis to work or shop," Wathen said.
But that dynamic isn't in play in the Evansville area, he said.
"For us, it's pretty difficult for Indianapolis to have an influence on us," Wathen said. "We're just so far away from it."
The local observers also say that, while encouraging, this report shouldn't be taken as gospel. As with any report, it has its limitations.
For one thing, it doesn't address the type of jobs that might be brought in to replace those lost. A community that loses 100 well-paying positions, they say, won't regain that loss with the addition of 100 low-wage jobs.
"It's not just the quantity of jobs, it's the quality of jobs," Weinzapfel said.
And by its nature, Wathen said, any report is "purely a snapshot of something that happened at a period of time," meaning that it always lags behind present realities.
The Tri-State had two significant job announcements last week, for instance.
Berry Plastics announced it would bring 120 jobs to its Evansville headquarters through a combination of expansion and transfers from other Berry facilities. Automotive supplier North American Lighting announced it will build a plant in Warrick County, adding about 40 new jobs.
Regardless of the report's limitations, Weinzapfel said he's heartened by the report's findings.
"There's no doubt Evansville's suffered along with everyone else in this recession. That shouldn't be lost in this discussion. But we're always looking for positive signs and good news, and this (report) is one piece of evidence."