Kentucky Economy Set to Close Strong in 2014
As the year comes to a close, state economists say Kentucky’s economy is reaping significant gains due to a steep drop in unemployment and a boost in jobs.
The Kentucky Cabinet for Economic Development reports that manufacturing sector growth has had a big impact.
“The sector added 700 jobs from September to October and tallied more than 3,400 jobs since last year," according to Kim Saylor Brannock of the Kentucky Office of Employment and Training. "That's a really good increase."
Nationally, the U.S. Department of Commerce reports that since February 2010, U.S. manufacturing sector has grown twice as fast as the overall economy, creating 700,000 jobs in those four years, with weekly work hours at their highest since World War II. This growth continued despite a two-month, 10.6 percent national decrease over August and September in new orders for manufactured goods, including Kentucky's main product—vehicles.
The Cabinet for Economic Development says Kentucky is home to more than 4,000 manufacturers, representing 220,000 jobs.
Gov. Steve Beshearsaid in a news release last month: “Last year alone, more than 200 manufacturers announced new locations or expansions in the state. These projects are expected to create nearly 7,500 new jobs and $2.2 billion in additional investment."
Meanwhile, the CED said, the state exported a record-breaking $25.3 billion goods to 200 countries this year. This 10 percent growth rate towers over the current national average of 3 percent.
The CED also reported that since 2010, when Beshear created the Kentucky Export Initiative, global exports have grown by 25 percent.
Although spikes in manufacturing are contributing to state job growth, Brannock said the year-end spike that provided the largest amount of jobs was in another sector: professional and business services, which added 6,100 positions in October alone.
Jobs in that sector include things like payroll processing and temporary work services.
Brannock said these growth rates are contributing to record drops in unemployment rates, noting that the one-month drop of 6.7 percent from September to October was the largest drop since 1979.
The steep drop is “combined with gains in hiring and also consumer spending is up,” she said. “And those are all good indicators for a growing economy. So all signs are pointing to a robust recovery from the financial crisis in 2008."
Boone, Fayette and Jefferson counties account for slightly more than a third of Kentucky's employment. These three counties led in job growth and wage hikes. Average pay in Boone increased by 1.2 percent. Fayette pay rose 2.8 percent and the average pay in Jefferson jumped 3.8 percent, according to the Bureau of Labor Statistics’ most recent 12-month study.
State Rep. Rick Rand, a Bedford Democrat, chairs the House Appropriations and Revenue Committee and shares the task of building the biennial Kentucky budget. He said job growth and manufacturing gains are starting to show up in the state's overall revenue, which feeds the budget.
"Our revenue streams have been recovering since about 2010,” he said. “But it has been a little slow and sporadic so I am in hopes that as we see the unemployment rate drop that employers are hiring and we'll see those revenue streams stabilize."
To compare Kentucky’s 2014 growth to last year’s, the CED’s 2013 annual report is available online.