SOUTHERN INDIANA — It's a little over halfway into 2017 and Southern Indiana and the rest of the state is seeing a decent amount of economic activity, particularly when it comes to company expansions.
“The project activity and the prospect activity has been notably high,” said Matt Hall, One Southern Indiana’s vice president. “We have had a lot of inquiries, and projects that have been sort of drifting along have become hot again or active again.”
1si has recorded 35 ribbon cuttings in the area since Jan. 1, as well as one formal ground breaking. The organization also has announced the expansions of three existing Clark and Floyd counties businesses: Smith Creek Inc. in Borden, Visionary Sleep LLC and Beach Mold & Tool Inc., both in New Albany.
Expansions don’t typically mean a lot of new jobs, but they’re important all the same, Hall said.
“We really don’t want to take for granted the businesses that are already here,” he said. “We appreciate them.”
Visionary Sleep brought 10 new jobs to the area with its expansion, Smith Creek added seven and Beach Mold & Tool listed no new jobs, but is adding on 100,000 square feet to its warehouse, as well as a new crane.
By this time last year, 1si had actually announced five new economic development projects by local businesses. In 2015, 13 had been announced. But 1si plans to reveal a couple of projects within the next few weeks, Hall said.
Other businesses, such as Knapheide Manufacturing Co., a truck parts installer in Jeffersonville, were announced by 1si in 2016, but just opened this year.
“We’ve been doing some local sales and things like that,” said Knapheide general manager Brian Puckett. “We’re a little bit slow starting out.”
His 76,000-square-foot facility employs around 24 people, and there are plans to hire around 25 more by the end of this year.
The Indiana Economic Development Corp. secured 12 commitments from companies to grow and expand into Southeast Indiana during the first half of 2017, although that number includes 14 more counties than just Clark and Floyd. None of the two publicly announced commitments were coming to either Floyd or Clark.
Still, the companies plan to invest $202.7 million in their Indiana operations and create up to 1,523 new jobs.
Twenty-thousand jobs are expected to be added in the Louisville metropolitan area by the end of this year, according to a midyear economic update given in May by Uric Dufrene, Indiana University Southeast’s Sanders Chair in Business.
When it comes to the state as a whole, 164 companies have made commitments to locate to or expand within Indiana. They’re expected to create up to 17,823 jobs in the coming years and to invest $5.4 billion in their operations.
Most notably, the new jobs are expected to pay an average wage of $28.60 an hour, or more than $59,000 annually. The average hourly wage for all jobs in Indiana in May 2016 was $20.64.
Last year at this point, 136 companies had made commitments in Indiana, offering an hourly wage of $26.21 for their 12,652 new jobs: all lesser accomplishments than this year's.
Hall said that the business climate in Indiana is “very strong," with the state’s commitment to keeping regulations at a “reasonable” level. The state also gives out pay-as-you-go incentives for tax abatements and similar things, meaning that companies have to show that they’re meeting their employment expectations to receive their benefits.
Southern Indiana local government is also supportive of business, Hall said. The various city and county boards give out tax abatements, as well as support places like the River Ridge Commerce Center and the Port of Indiana-Jeffersonville, which attract jobs to the area.
Inscope Medical Solutions, an award-winning medical device start-up, just moved to Jeffersonville in December, even though it was founded in Louisville. The reason? The state offered the company funding and networking opportunities.
One thing that the area struggles with, however, is workforce, according to Hall.
“It is the achilles heel to all of the opportunity we have here,” he said.
Southern Indiana workers aren’t all skilled enough or numerous enough for some companies who want to locate here, he said. And that has prevented some from doing so.
The Louisville metropolitan area’s unemployment rate in 2016 was less than the state and national average. The educational attainment rate in Clark County is lower than the state or national average, according to Dufrene. Floyd County’s is just lower than the national average.
Knapheide Manufacturing Co. hasn’t had too much trouble finding workers for its facility, Puckett said, but partly because a competitor in Louisville shut down, leaving the market with experienced workers seeking a job. The facility is also comfortable with the amount of employees it has for now. When more sales start coming in and more workers are needed, however, Puckett’s not sure how easy it will be to find the workers he needs.
1si has launched a talent development initiative to build a more skilled workforce in the area, but it’s a process.
“It’s not an overnight fix,” Hall said. “It’s not a magic pill. It takes investment, time, talent and treasure. Lots of it to make it successful.”
But Hall is hopeful for the rest of 2017 for the Southern Indiana economy. He likes to judge how the area is doing economically based on whether or not companies are showing an interest in expanding to the community. He’s seen lots of that.