E'town MSA sees drop in real personal income

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First time since 2008 no growth recorded

By Marty Finley

A decline in wages and salaries has led to a drop in real personal income for the Elizabethtown Metropolitan Statistical Area after several years of recorded growth.

The U.S. Bureau of Economic Analysis released a report last week logging the real personal income growth from 2011 to 2012 for all 381 MSAs in the U.S. The Elizabethtown MSA reported a decline of -1.55 percent.

Comparatively, the area saw a 3.7 percent increase in real personal income for 2010-11 and a roughly 7.5 percent increase in 2009-10, according to the latest BEA figures.

Real personal income for the MSA fell from about $6.52 billion to $6.42 billion based on the latest estimates for 2012. The MSA now includes Hardin, LaRue and Meade counties. Meade County was added last year.

Thomas Dail, a spokesman for the BEA, said the Elizabethtown MSA was recording a decline in real personal

income growth even before the numbers were adjusted for inflation. The prevailing factor, Dail said, is a decline in wages local residents are receiving from their jobs, particularly in the federal civilian and military employment sectors.

The price-adjusted estimates for real personal income are based on regional price parities and the BEA’s Personal Consumption Expenditure price index. Regional price parities measure how geographic differences impact price levels for goods and services while the PCE price index measures national price changes over time.

Brad Richardson, executive director of the Hardin County Chamber of Commerce, said it is not surprising the overall rate of personal income would be affected by a drop in net earnings for the civilian and military sector. Richardson said the one positive he takes away from the figures is there has been no detrimental impact in areas such as manufacturing, retail and service sectors.

Judge-Executive Harry Berry seconded Richardson’s notion, saying the numbers do not reflect the impact new industry has or will have on the MSA, including the acquisition of facilities for Indian packaging manufacturer Flex Films and heavy truck suspension systems manufacturer Hendrickson USA.

The years of resounding growth were triggered by an influx of employees and soldiers to the post as part of the Base Realignment and Closure Initiative mandated by Congress that brought units including Human Resources Command, U.S. Army Cadet Command and the 3rd Infantry Brigade Combat Team to the Kentucky military installation.

But that surge is over, Berry noted, and the Army has been financially impacted by force reductions, sequestration and other cuts.

“It is bound to have some impact,” Berry said.

Berry said you cannot expect a surge in growth every year, but the majority of the surge in economic impact has been retained and the area has done a good job of keeping other sectors stable.

Ryan Brus, public affairs officer for Fort Knox, has said economic impact from Fort Knox will drop from about $2.8 billion to $2.6 billion once the 3rd Infantry Brigade Combat Team inactivates this year. While a reduction, it still is much higher than the impact of the post prior to Base Realignment and Closure, when it was around $1.8 billion, Brus said.

The BEA also reported Kentucky is one of the cheapest states in the country in terms of regional price parity, which Berry said is an advantage for the area because the purchasing power of local wages stretches farther than in more expensive states, such as New York, California and Maryland.

The Odessa, Texas, MSA reported the largest level of real personal income growth in the country at 10.2 percent followed by Midland, Texas, at 9.6 percent. MSAs that saw the largest declines were Watertown-Fort Drum, N.Y., at -2.5 percent and State College, Pa., at -2.4 percent.

Marty Finley can be reached at 270-505-1762 or mfinley@