Southern Indiana job growth still expected in 2017 despite stagnate 1st quarter results

Dufrene, Indiana University Southeast’s Sanders Chair in Business, gave the annual Mid-Year Economic Update at the college on Wednesday morning. 

Dufrene discussed data that showed stagnant payroll growth in the area for the first quarter of 2017, but he doesn’t expect it to stay that way. National GDP growth was slow during that time period, a factor that affects job growth. 

“We believe that 2017 will be one of those years where we pick up about 20,000 jobs or so, which is above average for the metro area,” he said. 

In 2016, just 12,000 jobs were added in the area. 

Of the jobs being added, service-related positions are among the most notable, Dufrene said, including health, education and — most significantly — professional business services jobs, which encompasses everything from legal to computer systems design work. 

Unlike the states of Indiana and Kentucky as a whole, the Louisville metropolitan area is also seeing stronger than average job growth in manufacturing. The Louisville metropolitan area includes eight counties in Kentucky and five in Indiana: Clark, Floyd, Scott, Harrison and Washington. 

That, Dufrene said, can be attributed to local anomalies, such as the River Ridge Commerce Center, where there are thousands of acres available for industrial development. 

The commerce center also means that more jobs are appearing in Clark County than Floyd County, although Floyd County wage growth is accelerating at a faster rate. 

In general, Dufrene sees a favorable long-term outlook for the Louisville area, but he does point out a few local challenges. 

For one, wage growth locally is not as good as it is nationally. 

Another problem is that employment and labor force in the area are almost equal. 

“We’ve pretty much exhausted the labor pool, which is why it’s so difficult to hire,” he said “I don’t know if you’re still facing some of these challenges, but I hear all the time from employers, the difficulty finding people.” 

And while Dufrene believes that the Ohio River Bridges Project is good economically for the area, there is one effect from the new bridges that could make this problem worse. 

The Lewis and Clark Bridge has shortened the commute for Southern Indiana residents to eastern parts of Louisville. Those drivers might decided to work in Kentucky instead of Indiana. 

In general, however, the bridge is expected to increase the amount of commuters from Kentucky to Indiana. 

Dufrene also warns about Southern Indiana’s educational attainment, meaning the level of degrees residents are obtaining. 

Clark County’s educational attainment level is below the state and national average, while Floyd’s is above the state average, but still below the national average, Dufrene said. 

Not having an educated workforce could keep some employers from locating to the area, he speculated. 

Dufrene’s insights were welcomed by the crowd of business people and government officials that attended his presentation, including Barbara Popp, a realtor with Schuler Bauer Real Estate Services. 

“The information he shared today makes us very optimistic for our region,” she said. 

Popp, like Dufrene, does have her reservations about some aspects of the economy. The cost of goods, including housing, appear to be growing, she said.