The Lexington-Fayette Metropolitan Statistical Area (MSA) has seen some hits and misses on the job front as it passed through the mid-point of 2012. According to Current Employment Survey (CES) data from the U.S. Bureau of Labor Statistics (BLS), total non-farm employment in the MSA increased by 4,600 jobs (1.9%) in the 12 months ending in July 2012. This is a solid gain and certainly higher than the increase recorded in the last Reis Observer. This is of course good news, as the economy here is has both it strong and weak points, with large agricultural and service components. This part of central Kentucky is renowned for burley tobacco production and hundreds of horse farms, which bring tourists from all around the world to the Keeneland Race Course and the Red Mile.
But there are other aspects to the Lexington employment picture. In August, the city received the unwelcome news that computer printer and copier manufacturer Lexmark was laying off 500 Lexington-based employees of its inkjet division, which it is closing. The Lexington Herald-Leader reported August 12th that “the financial impact to the city from the layoffs in Lexington, according to preliminary figures, could be $1 million,” the city finance commissioner told a meeting of Lexington officials. This company had a difficult fourth quarter, as noted in the previous Observer, and at that time talk of layoffs was mostly concentrated on overseas operations. This time, the layoffs hit home. As bad as that news is, state economic officials said it is possible for the Lexington economy to take the hit, as it is coming out a recession. Statewide, Manufacturing sector employment has increased 3.9% in the past year, the Herald-Leader reported, mainly in durable goods such as automobiles. This source quoted state officials characterizing the Lexington economy as “dynamic.”
Unfortunately, the city is also facing the loss of 200 jobs with the announcement by a Medicaid provider that it was ending it contract with the state one year early. Kentucky.com reported in October that “one of three Medicaid managed-care companies has told Kentucky that it plans to end its contract with the state by July 2013, putting 200 people out of work in Lexington. Kentucky Spirit notified the Cabinet for Health and Family Services … that it intends to terminate its three-year contract a year early. The company and the state said they intend to seek damages for breach of contract,” Kentucky.com reported. State officials said the company is in breach of contract by terminating its contract early, and the issue could wind up in court for a final settlement, local sources say. In the meantime, Lexington jobs are in the balance.
There is, however, also good news on the employment front. Earlier this year, a delegation of Central Kentucky officials visited the nearby Blue Grass Army depot in Richmond, which employs about 1,000 people. With the winding down of America’s presence in Iraq, concerns arouse that the army was considering closing that facility. However, “rumors that the Army has a long-term plan to phase out conventional operations at the Blue Grass Army Depot are just that, rumors, according to Brig. Gen. Kevin O’Connell, head of the Army’s Joint Munitions Command,” the Richmond Register reported September 27th. “There is no long-term plan to ‘phase out’ the Blue Grass Army Depot,” O’Connell said, and the installation’s mission will remain the storage, distribution and demilitarization of conventional ammunition.
The largest employer is the University of Kentucky, with over 14,000 people on its payroll. The University had laid off 1.0% of its employees in June, according to the Lexington Herald Leader. Among private businesses in that sector, however, CES data indicate an increase of 600 jobs (1.9%) in the Education and Health Services sector. The Professional and Business Services sector once again saw the highest increase of all sectors, at 2,800 jobs (9.1%). Moving to more blue-collar employment, Manufacturing increased by 400 jobs (1.4%) and Construction and associated activities fell by 500 jobs (4.9%). In their Mid-year 2012 report, NAI Isaac reports that “recent Lexington job activity includes: Big A Fans’ expansion creating 150 jobs; Tiffany & Co. expansion projecting an additional 125 jobs; Tempur-Pedic’s expansion bringing its employment to 772 jobs; GE Lighting’s plant expansion” as examples of job growth in Lexington.