Kentucky Economy Enters ‘New Year with Gusto’
Citing widespread vaccinations and an early reopening, a second major rating agency has published a positive economic outlook for Kentucky. The Moody’s Analytics report is the latest in a string of positive economic news highlighting that the commonwealth is poised to prosper as the state emerges from the pandemic.
The report notes “mass vaccinations will be the driving force behind a sustained recovery in consumer services,” “the state’s recovery has benefited from earlier reopening efforts and increased demand for manufactured goods over services,” that Kentucky’s “manufacturing industry has outperformed the nation’s” since an initial downturn nationally last year and “payroll employment surged in the first quarter and is now 4.9% below its pre-pandemic level, which is slightly better than the national average.”
“Consumer industries are ripe for a rebound as mass vaccinations pave the way for increased local spending in the second half of 2021,” according to Moody’s analysis.
Gov. Beshear, in response to the latest positive economic news for Kentucky, said “Two major rating agencies, the U.S. Treasury Department, Site Selection magazine and our own sales tax receipts show while our economy is prepared to boom, this is just the beginning. Our economy is open, and we are announcing new, good-paying jobs every week. We must seize this moment to create a better commonwealth with more opportunities for our people in every corner of Kentucky.”
From the Moody’s report:
“Kentucky’s economy will improve after a modest pullback late last year. Mass vaccinations will be the driving force behind a sustained recovery in consumer services, while manufacturing will fare well once it gets past some near-term supply disruptions.”
“Kentucky’s economy lagged the U.S. prior to the pandemic, but the state’s recovery has benefited from earlier reopening efforts and increased demand for manufactured goods over services. Payroll employment surged in the first quarter and is now 4.9% below its pre-pandemic level, which is slightly better than the national average.”
“Manufacturing was one of the hardest-hit industries during the initial downturn last year, with employment contracting as much as 18% compared with 11% nationally. Since then, KY’s manufacturing industry has outperformed the nation’s, with more than 80% of lost manufacturing jobs being recouped.”
The Moody’s report is just the latest positive economic news for Kentucky.
The Governor announced that year-to-date, businesses have announced the planned and ongoing creation of nearly 2,750 full-time, Kentucky-resident jobs. That figure nearly doubles the 1,430 jobs announced throughout the same span in 2020. Businesses announced plans for 33 projects in Kentucky comprising nearly $1.5 billion in planned investment in addition to the more than 2,700 jobs.
Earlier this month, Fitch Ratings improved the state’s financial outlook to stable, reflecting the commonwealth’s solid economic recovery. The state’s April sales tax receipts set an all-time monthly record at $486.5 million, as did vehicle usage tax receipts at over $64 million.
In March, Site Selection magazine’s annual Governor’s Cup rankings for 2020 positioned Kentucky atop the South Central region, and third nationally, for qualifying projects per capita. The commonwealth also placed seventh overall in total projects, the highest of any state with a population under 5 million.
While most Kentucky businesses have been fully open for months, the economy should be further ready to thrive when all businesses are able to fully reopen on June 11.
On May 28, all indoor and outdoor events of any size and businesses of any capacity can increase to 75% capacity. Just two weeks later, the state’s emerging economy is set for liftoff as final capacity restrictions related to COVID-19 end Friday, June 11. On the same day, the state will also eliminate the mask mandate for all Kentuckians with the exception of places where people are the most vulnerable. The Governor said he was keeping some capacity limits and the mask mandate in place until June 11 in order to give 12- to 15-year-old Kentuckians enough time to receive both doses of the vaccine before all restrictions are lifted.
With the Moody’s report evidence of the importance of vaccinations allowing Kentucky to safely and sustainably reopen its economy, Gov. Beshear encouraged all of those eligible to get their vaccine. As of May 18, 1,932,189 Kentuckians have received at least one dose.