Three things to know for March 2023
We now have a clearer picture of 2022 in Indianapolis
Good morning!
Tracking trends in key areas such as employment, housing, and crime allows us to make informed decisions about investments, job opportunities, and other areas of our lives that have been affected by COVID-19. However, many of the indicators we track in the How is Indianapolis Doing project report data with a month or two of lag time.
For instance, although you are receiving this email update in March 2023, the Unemployment Rates currently listed on our project page are from December 2022—the most recent month reported by the Bureau of Labor Statistics (BLS.) This can make real-time analysis challenging.
Now that we are a few months into the new year, the data for 2022 in Indianapolis has become clearer as more data sources reported their year-end numbers. Today’s newsletter will discuss positive movement in the three areas mentioned in the introduction, each following an established year-over-year pattern.
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Three things for March 2023
Each month we’ll highlight a few interesting trends from the data. Here are the top three indicators for Indianapolis this month.
#1 Most industries have recovered from pandemic-era economic downturn with a few key exceptions
December 2022 employment in key sectors compared to pre-pandemic 5-year average
The COVID-19 pandemic has had a profound impact on the employment landscape, leading to widespread job loss in some areas while bolstering others. For instance, at the onset of the pandemic, one might have thought that the construction industry would have struggled given myriad supply chain issues. However, construction jobs have boomed in the Indianapolis area compared to before the pandemic. The chart above shows that there are 24 percent more construction jobs in the Indy area compared to an average of the five-year period pre-pandemic.
Construction is one of seven industries tracked by the BLS where the number of jobs has grown compared to pre-pandemic times. Comparatively, three key industries have struggled.
In the Hospitality and Leisure sector (e.g., hotels, restaurants), employment is down compared to before the pandemic. There are currently 5 percent fewer jobs in this sector compared to an average of the five-year period pre-pandemic, likely due to decreased demand. “Other Services” have also struggled, with 7 percent few jobs. This sector includes personal services like barber shops, beauty salons, automotive repair shops, and car washes.
The Information sector is another where job numbers are down significantly compared to the pre-pandemic period. Numbers from the Bureau of Labor Statistics show that there are 15 percent fewer jobs in “Information” compared to an average of the five-year period pre-pandemic. The BLS categorizes jobs in areas like wired telecommunications, newspaper publishers, and print media as “Information”—all technologies that have become increasingly replaced by their digital counterparts.
It's important to note that the economic situation continues to change, and the impact on employment across different sectors may change in the coming months as the world continues to evolve post-pandemic. However, for now, it appears that most sectors have weathered the initial storm of the pandemic.
#2 Homes spending more time on the market
Median days on market for residential property listings
The “Median Days on Market” metric from the Federal Reserve Bank of St. Louis (FRED) tracks how long the median home listing takes to sell in each housing market. Here in Indianapolis, this metric steadily dropped year-over-year as homes have sold faster and faster throughout the pandemic. The speed at which homes have sold paired with a sharp increase in prices were evidence of simultaneous heightened demand and restricted supply.
In recent months the median days on market has trended upwards, as usually happens during the fall and winter. However, the increase in days on market has been above and beyond the normal cyclical trends, demonstrating a cooling housing market. The most recent numbers available for December 2022, showed that the median home for sale stayed on the market for 55 days in the Indianapolis metro area. This was the longest time for the median home to stay on market since February 2021. Nationally, the pace of housing price increases has slowed in recent months according to the National Association of Realtors—another indicator of a cooling market.
Despite this evidence, economists are mixed on their predictions for the housing market in 2023. Other indicators—like the supply of homes—remains low, suggesting that higher prices may be here to stay. At least for the time-being though, home buyers in Central Indiana have more time to search for what few homes are listed on the market.
#3 A drop in the number of homicides
Monthly average number of homicides in Indianapolis (2018-2022)
The impact of the COVID-19 pandemic on crime and violence has been a subject of much discussion and analysis. In Indianapolis, as in many other cities, the number of homicides trended upwards in both 2020 and 2021.
It was uncertain at the beginning of 2022 whether this trend would continue. Now that the year has ended, it’s clear that homicides have declined. The monthly average number of murders in 2022 was 19.1 compared to 23.3 in 2021 and 20.6 in 2020. In more welcome news, it appears many other large cities experienced a decline in 2022 as well.
While there is still much work to be done to create a safer and more peaceful community for all residents, the trend of decreasing homicides is a step in the right direction.
SAVI’s Suggested Reads
The University of Toronto’s Downtown Recovery Project analyzed personal location data from cell phones in the 60 most populous North American cities to understand how often people were frequenting downtown areas compared to pre-pandemic levels. Indianapolis had one of the lowest “recovery quotients” they observed among these cities.
The Indianapolis Business Journal wrote a series of articles for their feature “Downtown at a Crossroads” that tried to explain the increase in investment for downtown projects alongside the decline of large office building usage in the Central Business District. If you don’t have access to an IBJ subscription, many of their reporters summarized the highlights on Twitter.