Kokomo — While one report accredited Kokomo for leading Indiana to the top in manufacturing industry health, another study placed the city at the bottom of national rankings because of its previous economic struggles.
Among findings listed in a U.S. Conference of Mayors report released Tuesday, Kokomo is looking at another 10 years before it will return to its peak employment level.
The U.S. Metro Economies report came the day after Ball State University’s Center for Business and Economic Research gave Indiana multiple A grades, with accolades given to Kokomo for its regrowth, in the research group’s annual Manufacturing and Logistics national and state reports.
10 Years to Recover
Researchers with the Conference of Mayors state Kokomo’s return to peak employment would be “Beyond 2021.”
The longevity of the recovery is mainly because Kokomo was hit much harder than most metropolitan areas, said Karl Kuykendall, a regional economist with the Conference for Mayors.
“It looks quite alarming to see that Kokomo won’t return to previous pre-recession levels until after 2021,” he said, “but it is important to keep in mind how far it fell in the recession. We will see job growth in the next couple years. It just has a lot of ground to cover.”
Forty-eight metros in the U.S. are expected to take until after 2020 to recover from unemployment. Six of them are in Indiana: Kokomo, Anderson, Elkhart-Goshen, Michigan City-La Porte, South Bend-Mishawaka and Terre Haute.
Kokomo, which the state reported had 10.5 percent unemployment in May, has been clawing its way back from more than 20 percent unemployment in June 2009.
“As far as job growth goes, we do expect there to be positive growth in Kokomo over the next couple years,” Kuykendall said, “particularly the rebound in manufacturing unemployment.”
The city’s economic woes over the past decade reflected elsewhere in the report.
Kokomo ranked last out of 363 U.S. metro areas for average annual economic growth between 2000 and 2010. The city was one of two metros in the category, the second being Flint, Mich., that experienced a decrease over last decade at -0.4 percent.
Kokomo Mayor Greg Goodnight said he questioned many of the reports findings because researchers compared a city of about 46,000 people to New York or Los Angeles.
He said it was difficult to determine whether it would take another 10 years for employment to fully recovery, as the report stated.
“You’re asking me to look 10 years into the future,” he said. “I don’t know that I can do that. I don’t know that they can do that.”
Top of Class
Kokomo, Columbus and Elkhart led Indiana to an A grade from Ball State’s Center for Business and Economic Research.
Indiana ranked No. 1 in the U.S. for manufacturing health. The state was one of five to receive an A in the category
Indiana also earned A’s in logistics industry health, global reach and tax climate.
Low tax rates have helped the state pull ahead of its Midwestern neighbors, said Michael Hicks, director of the Ball State research center.
Businesses before the recession often located where they would find workers, Hicks said, but with an abundance of applications for most job openings, companies look more at tax rates.
“The focus has shifted, I think, to the fiscal environment,” he said, “the fiscal environment being primarily ‘What are the taxes like now?’ and ‘What are the taxes likely to be in the coming decade or so?’ Indiana is particularly bright in that respect.
“Unfunded liabilities are so low, relative to neighbors, that the calculus of tax increases doesn’t weigh heavily on Indiana. It weighs heavily on Ohio, Illinois and Michigan.”
Ball State gave the state C’s in human capital, benefit costs, productivity and innovation, diversification and venture capital.
The national report predicts Kokomo will lead the state in manufacturing income growth in 2011 at 2.75 percent. Indiana should have 1.03 percent growth.
Hicks said investments, such as Chrysler’s plans for almost $1.3 billion in its Kokomo operations, will secure and continue to steadily create jobs in the next few years.
He lauded Kokomo for its efforts to improve the community overall as a way to attract educated and skilled workers to the area, which he said will be key to improving the state’s manufacturing industry.
Goodnight emphasized he plans to continue focusing on enhancing quality of life. Too many people, he said, take jobs in Kokomo but live outside Howard County, pulling away money from local businesses.
“Teachers, professors, hospital technicians, we’re not capturing them in the community,” he said. “Obviously, they would make our economy more stable and thriving.”