NEW ALBANY — While labor-force growth in the Louisville Metro area wasn't as strong in 2015 as it was in 2014, local economic experts said they think Southern Indiana could see a surge next year.
The question is whether enough people are available to fill the jobs.
At Indiana University Southeast's Economic Outlook Breakfast on Friday, Executive Vice Chancellor for Academic Affairs Uric Dufrene, also an economist, said a big factor for meeting the demand for workers in the coming years for Southern Indiana will rely on attracting people to the region.
“The growth in the regular size of labor force is not going to keep up with some of the growth we're going to see in Southern Indiana through River Ridge [Commerce Center] and also the bridges,” Dufrene said. “How are we going to grow River Ridge if the growth in the labor force cannot match the growth in jobs there?
"Perhaps this is why the subject of quality of place is so important.”
He said manufacturing continues to serve as a function of job growth, but it's a sector that's slowing in Louisville Metro.
However, in Clark, Floyd, Harrison and Washington counties in Indiana, manufacturing has played a big role in job growth, he said.
“The most recently available county payroll data, which is the first quarter of 2015, point to the strongest quarter for Southern Indiana since 2001," Dufrene said.
That quarter of 2015 represented about 3,000 new jobs from those four counties, two-thirds of which were from Clark County because of River Ridge.
He also said the continued growth of River Ridge and the completion of the Ohio River Bridges Project could have an affect on the region, but that impact was potential, not promised.
He said about 27,000 workers are unemployed in Louisville, which still isn't enough to fill the 40,000 jobs expected to come to the region in the next 10 years.
And though unemployment rates are down right now, sitting at less than 5 percent, he said in Louisville, it looks like that comes from a decline in workforce rather than a decline in people who are out of a job.
However, Southern Indiana's decrease in the unemployment rate looks like an actual drop in people without jobs.
“Southern Indiana is seeing a decline in the unemployment rate through a growth in employment,” Dufrene said. “Over the past year, for example, employment grew by almost 3,000, but the labor force expanded by almost 1,000. So consequently, the number of unemployed dropped by 2,500.
"Basically, you had people switching from unemployed to employed, rather than leaving the labor force.”
He said to continue that growth at the rate of labor force increase, it's important to find ways to draw people to Southern Indiana. He said New Albany and Jeffersonville are doing a lot to attract people, but greenway projects also can help.
OUTSIDE THE AREA
Statewide, the outlook is mostly flat.
Jim Smith, a senior lecturer in finance at the Kelley School of Business at IU Bloomington, said an old joke about economic effects on the state doesn't hold water in today's environment.
“When we look at Indiana, we're mainly trying to measure what's going on with employment and sales,” Smith said. “The joke used to be that Indiana was more sensitive than average to change in the general economy. When the U.S. economy got a cold, Indiana got pneumonia. But that is less true these days.”
While the national unemployment rate sits at 5 percent, he said Indiana's is at about 4.5 percent, which beats historical rates during the last two recessions in 1982 and 2008-09.
“In terms of unemployment rates, right now, we're significantly better than the national average and we don't see as wide [of] swings in the Indiana economy,” Smith said. “Some of the major employers in Indiana are more geographically diversified than they used to be. Indiana is still heavily dependent on manufacturing, but a little less so than it was 30 or 40 years ago.”
But he said there's not much room for growth next year. While car sales are hitting near-record highs and housing is expected to perform pretty well, there's not much room for large-scale hiring in any industry.
However, he said just because it's looking flat doesn't mean it's a negative outlook.
“Although we're looking at kind of a plateau in 2016, it's not a bad plateau to be on,” Smith said.