Dr. Sudesh Mujumdar, professor of economics, a panelist at the 2016 Economic Outlook Luncheon
The Indiana Chamber of Commerce (Southwest) hosts an annual event – The Economic Outlook Luncheon - where an invited group of panelists discusses the economic outlook for the global, national, Indiana, and Evansville economies.
Dr. Sudesh Mujumdar, professor of economics, serving on this year’s panel, made the following key points about the Evansville economy:
- The actual unemployment rate for the Evansville area for 2016 (4.5%) turned out be higher than the forecast (4.3%) largely due to the multiplier effect of the loss of about 600 jobs from the shuttering of Alcoa’s Warrick county smelter.
- For 2017, the unemployment rate for the Evansville area is forecasted to drop slightly to 4.4% driven by new construction activity and related services, such as that of the Hyatt Park Place in downtown Evansville (slated to open in 2018).
- The Evansville area economy has been experiencing a structural transformation away from Manufacturing and towards Services; Education and Health services now account for the largest share (18%) of total (non-farm) employment.
- The McBucks Index – ratio of McDonalds stores to Starbucks stores – developed by Dr. Perry Burnett and USI economics majors, Travis Brooks and Patrick Bassett – revealed that the quality of life in the Evansville area has experienced significant improvement, as reflected in the sharp drop of this ratio from 3.6 in 2010 to 3.0 in 2016. In contrast, the areas of Muncie, IN, and Terra Haute experienced little or no gains in quality of life. The Bowling Green, KY, area experienced a significant improvement in quality of life over the 2010 – 2016 period. However, the quality of life in the Evansville area remains ahead of Bowling Green, KY. (The McBucks Index is founded on location theory and is strongly correlated with traditional quality of life indices).
- The quality of life gains in the Evansville area reflects its economic dynamism. On the Small City Economic Dynamism Index (developed by the Federal Reserve Bank of Atlanta), Evansville scores on par or above all other Indiana Small cities (including Muncie) except Bloomington.
- Going forward, the Evansville area faces some demographic challenges. It seems to be able to attract mid-level professionals who gain experience and then move out. Similarly, it does not seem to be able to hold on to younger talent. However, the 60 plus age is expected to grow in size. While this may bode well for the Health services sector, the economic dynamism of Evansville may experience a setback.
Dr. Mujumdar's presentation is available online (pdf). Read full article on courierpress.com's website>>