Strong Economic Conditions in the Evansville HMA Led by the Manufacturing Sector
Economic conditions in the Evansville, Indiana-Kentucky Housing Market Area, which is located predominately in HUD Region V, are strong. During the 12 months ending June 2019, the unemployment rate in the HMA averaged 3.2 percent, compared to the national unemployment rate of 3.8 percent during that period.HUD’s Comprehensive Housing Market Analyses provide information on changes in local economies, housing markets, and populations and provide 3-year forecasts for demand in the area. This article is part of a series that sheds light on the content of these analyses.
Introduction
The Evansville Housing Market Area (Evansville HMA) is located along the Ohio River and includes parts of southwestern Indiana and northwestern Kentucky. Evansville is Indiana’s third-largest city, and the Evansville HMA has an estimated population of 314,500. The Evansville HMA serves as a commercial, cultural, and medical hub for the region. A recent Comprehensive Housing Market Analysis on the Evansville HMA highlighted the economic and housing market activity in the area.
Economic Activity in Evansville
Economic conditions in the Evansville HMA are strong. During the 12 months ending June 2019, nonfarm payrolls increased by 2,000, or 1.3 percent, to 164,100 jobs. The unemployment rate averaged 3.2 percent during the same period because employment growth was on par with growth in the workforce. By comparison, the national unemployment rate during this period was 3.8 percent.
The education and health services sector is the largest employment sector in the Evansville HMA, accounting for 18 percent of the workforce. From June 2018 to June 2019, the sector increased by 100 jobs, or 0.4 percent. The sector includes the HMA’s two largest employers: Deaconess Health System, Inc., and St. Vincent Evansville, which have 6,600 and 3,100 employees, respectively.
The manufacturing sector is the second-largest employment sector in the Evansville HMA. Local manufacturing centers on automobiles, plastics, and chemical exports. From June 2018 to June 2019, the sector added 900 jobs, an increase of 3.9 percent, making it the fastest-growing employment sector during the period.
Recent developments in the manufacturing sector include a $180 million expansion of the SABIC petrochemical plant 2018, which added 50 jobs to the area, and a $70 million expansion of Berry Global Inc. in 2019, which added 150 jobs.
Over the next 3 years, payrolls are expected to grow at a more modest rate of 0.9 percent per year. Expansions in the manufacturing sector will contribute to the job growth. PBTT is planning an $18.5 million expansion in 2020 that is expected to add 100 jobs, and EnCom Polymers is planning a $14.9 million expansion in 2021 that is expected to add 56 jobs.
Housing Market Activity in Evansville
The Evansville HMA sales housing market is balanced, with an estimated vacancy rate of 1.9 percent. The rental housing market is also balanced, with an estimated vacancy rate of 7.5 percent, and the apartment market is slightly tight, with a vacancy rate of 4.3 percent.
From June 2018 to June 2019, the homeownership rate in the HMA was 67.5 percent, which was higher than the national homeownership rate of 64.8 percent during this period.
During the 12 months ending June 2019, 7,625 homes were sold, on level with the previous year’s sales in the area. The average home sales price was $170,600, a 3 percent increase over the previous year. New home construction is concentrated in Warrick County near the town of Newburgh and in Vanderburgh County north of Evansville.
Over the next 3 years, demand is estimated for 1,500 new homes for sale and for 650 rental units. For more detailed information on the Evansville HMA, see the Comprehensive Housing Market Analysis on the area.
