GOSHEN — Fueled by a rapid expansion in travel, tourism and recreation over the past decade, as well as a strong manufacturing base, the Elkhart-Goshen metropolitan statistical area has been ranked fourth in the nation by The Walton Foundation’s recently released “Most Dynamic Metropolitans” study.

The new study, released Monday, ranks the economic performance of metropolitan areas.

“As the dominant economic geography of America, metropolitan statistical areas largely determine our success as a nation. These groups of counties with a large central core account for 88.6 percent of jobs, 89.1 percent of wages and 90.0 percent of Gross Domestic Product,” the study states. “Further, metropolitan statistical areas account for the bulk of innovation such as research and development and patenting activity. Understanding the mechanisms underpinning the growth of top-performing metropolitan areas, and sharing best practices, could assist other communities in boosting their economic fortunes. The Most Dynamic Metropolitan Index, ranking 379 metropolitan areas, seeks to provide an objective measure of the economic vibrancy of communities where the lion’s share of Americans work and live.”

According to the report, metro areas with knowledge-based economies tended to have greater economic growth and ranked higher than metro areas that have yet to make much-needed investments in technology, education, entrepreneurship and commercialization.

“The data show that a knowledge-based economy is key to unlocking economic potential in metropolitan areas across the United States. Cities making investments in a knowledge-based economy have performed better economically than those that have not,” said Ross DeVol, lead researcher of the study and a Walton Fellow. “Technology sectors are under-represented, and too little emphasis is placed on supporting entrepreneurs in Heartland metropolitan areas. Investors must be willing to support early-stage firms, and more universities need to embrace commercialization as a critical part of their mission and educational attainment, particularly in science, technology, engineering and mathematics for economic progress in the Heartland and throughout the nation.”


Within the index, each metropolitan area is ranked and reviewed on performance-based metrics, such as job growth, income gains, and the proportion of total jobs at young firms — a key measure of entrepreneurial performance.

According to the study, of the 379 metropolitan areas ranked within the index, the Elkhart-Goshen metro area was ranked fourth among the top 30 metropolitan areas nationwide, due in large part to the rapid expansion in travel, tourism and recreation experienced within the region over the past decade.

“This is not surprising, as Elkhart is the recreation vehicle capital of the world,” the study states. “For example, the motor vehicle body and trailer manufacturing industry’s concentration is 191.4 times that of the U.S. overall and the sector employs 30,200 in the metro area and represents 22 percent of total jobs in the metropolitan area.”

Additionally, the Elkhart-Goshen metro area was also ranked third among the top 10 small-sized metropolitan areas from across the nation for economic performance. Small-sized metro areas include a population of up to 499,999 people, while medium-sized metros include between 500,000 and 999,999 people and large-sized metros more than 1 million people. The Elkhart-Goshen metro area has a population of just over 205,000 people.

According to the study, the Elkhart-Goshen metro area recorded six top-10 positions out of the nine metrics included in the evaluation. The area held second in real GDP growth for 2017; third in growth in average annual pay from 2013-2017; fourth in both real GDP growth from 2013-2017 and job growth in 2018; fifth in the growth of average annual pay for 2017; and eighth in job growth from 2013-2017.

“Elkhart had the highest rate of job growth in the nation from 2009-2017. This is, in part, due to the high cyclicality of the RV industry and the dramatic decline in sales and output during the Great Recession,” the study states. “However, there are secular trends underway contributing to the rising popularity of RVs. First, millennials value the experiential economy and have rediscovered the attractiveness of the RV, as it permits greater immersion into the terrain of North America, driving sales higher. Second, gasoline prices fell dramatically since 2008 and the fuel efficiency of RVs rose, reducing operating expenses.”

The study points out that RV shipments coming out of the Elkhart-Goshen metro area were 321,100 in 2013 and jumped to 504,600 in 2017, a gain of 57.1 percent.

“One remarkable statistic highlighting the importance of the RV industry to Elkhart is that one in two RVs on the road in North America were built in the metro area,” the study states. “Elkhart exports more than one-fifth of its production, predominately to Canada and Mexico.”


Further illustration of the importance of the RV industry to the Elkhart-Goshen metro area can also be found by examining the local supply chain.

“Households and institutional furniture and kitchen cabinet manufacturing are 16 times more important to Elkhart than the nation overall,” the study states. “Additionally, other wood product manufacturing is 15 times more concentrated in Elkhart than for the nation, while plastic products manufacturing is 20 times more concentrated and architectural and structural metal manufacturing has nine times the concentration.”

All in all, approximately one-third of the Elkhart-Goshen metro area’s gross metro product is directly tied to the RV industry.

“This extensive local supply chain, along with other manufacturing operations, results in manufacturing representing 49.8 percent of employment in Elkhart versus 8.5 percent for the nation — resulting in a higher dependence on manufacturing than any other metropolitan area in the nation,” the study points out. “The downside is that it makes Elkhart’s economy among the most cyclical in the nation. The good news, at 2.8 percent, Elkhart’s unemployment rate is among the lowest in the nation.”

Speaking to that low unemployment rate, the study shows that the multiplicative effects of the RV industry on the regional economy are extensive.

As an example, the study notes that professional services in the area, such as accounting and design, pay high wages and contribute to spillover effects in other sectors.

“The residential real estate market has witnessed strong demand as single-family housing permits rose by 35.5 percent from 2015 to 2017,” the study states. “Similar to the national economy, leisure and hospitality has witnessed job gains of 4.7 percent over the most recent 12 months through January 2019. Financial activities and trade are recording strong job gains as well.”

In concluding its examination of the Elkhart-Goshen metro area, the study points out that a major advantage of the metro area is its ongoing focus on adding diversity to its economy and its entrepreneurial mix, particularly when it comes to the desire to support and nurture entrepreneurship by providing the tools and services needed for them to be successful.

“A strong culture of entrepreneurship, buttressed by numerous public and private groups, boosted the performance of the overall metropolitan leaders,” the study states. “Metropolitan areas that support the expansion of entrepreneurs and small businesses are more dynamic and resilient in the face of structural change.”


While the Elkhart-Goshen metro area’s strong showing in the The Walton Foundation’s recent study may indeed be cause for celebration, a deeper dive beneath the surface of the reported statistics has economist Michael Hicks a bit worried.

“I did look at the Walton report, and have some concerns,” said Hicks, director of the Center for Business and Economic Research at Ball State University. “It seems exciting to be ranked on this, and Elkhart-Goshen does have a robust manufacturing presence that has recovered well from the last business cycle. However, this has several worrisome features.”

First, given the Elkhart-Goshen metro area’s extremely high dependence on manufacturing for local employment opportunities, Hicks said it now appears the metro area is even more susceptible to a recession than it had been in decades past.

“This is of critical concern now that RV sales are slumping in ways that look eerily like a recession,” Hicks said. “Second, these jobs are at huge risk of automation. Elkhart County today is almost certainly the most ‘at risk’ of automation of any state in the union. AI and robotics/cobots will eviscerate the demand for labor in the assembly of RV’s within a generation or so. This is a risky time to have half of workers in factory jobs. The Walton study didn’t spend much time evaluating the risk to automation of these jobs.”

On a more positive note, Hicks said many of the manufacturing-related jobs currently available within the Elkhart-Goshen metro area are good jobs that have had strong wage growth in some sectors.

“Over the past 20 or so years, wages are up about 25 percent for workers in automobile manufacturing, the sector designation for RVs,” Hicks said, though he noted wages were actually down over the same time period for parts suppliers and miscellaneous vehicle manufacturing.

John Kline can be reached at john.kline@goshennews.com or 574-533-2151, ext. 315. Follow John on Twitter @jkline_TGN


Headquartered in Bentonville, Arkansas, the Walton Family Foundation is a family-led organization whose primary mission is to create access to opportunity for people and communities in three key areas: improving K-12 education, protecting rivers and oceans and the communities they support, and investing in the foundation’s home region of Northwest Arkansas and the Arkansas-Mississippi Delta. In 2018, the foundation awarded more than $595 million in grants in support of those initiatives.

For more information about the Walton Family Foundation or to read the study, visit www.waltonfamilyfoundation.org.

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