REAL ESTATE

Southern Indiana had a weak Q1 2026 for payrolls, but health care and services posted gains, IU brief finds

Indiana University Southeast’s regional economic brief published Oct. 15, 2026, said Southern Indiana’s first quarter 2026 payrolls were unusually weak but that health care, and professional, scientific and technical services added jobs — signs the region may be moving past a near-term trough.

News BriefBy BusinessIndy News DeskCommentsPublished October 15, 2026 at 9:03 AM EDTLiving story · 2 sources

AI-generated illustration of the topic: Southern Indiana had a weak Q1 2026 for payrolls, but health care and services posted gains, IU brief finds — AI illustration · Not a photograph of the reported event.

Southern Indiana’s payrolls were unusually weak in the first quarter of 2026, though health care added more than 600 jobs and professional, scientific and technical services added almost 400 jobs, Indiana University Southeast said in a regional brief published on 2026-10-15. The brief notes manufacturing lost 594 jobs year-over-year in Q1 2026, has shed jobs in five of the last seven quarters and is down about 3,000 jobs since 2020.

The brief described Q1 2026 as one of the weakest first quarters in the past 20 years (only 2017 and 2018 were weaker) and said the first quarter may represent a near-term trough for payrolls. It also cited a spike and continued elevation in the Economic Policy Uncertainty Index starting in early 2025, and referenced Bank of America Global Research saying recent growth in investment in structures has been driven by data centers. Quarterly year-over-year changes have trended slightly upward since Q1 2026, the brief reported.

WHY IT MATTERS

This brief is a regional snapshot of where jobs were at the start of 2026 and what sectors were driving change. "Payrolls" here means the count of jobs on employers’ payrolls — a standard way economists track employment. The report’s author calls the weak Q1 2026 performance a possible near-term trough, which simply means it may mark the lowest recent point before employment starts to recover.

For businesses and local policymakers, the details matter: health care’s gain of several hundred jobs is a concrete source of demand for local services and workers, while manufacturing’s multi-quarter losses and roughly 3,000-job decline since 2020 point to persistent weaknesses in that sector. The brief also flags broader factors — elevated policy uncertainty and rising investment in structures linked to data centers — that can influence hiring and real-estate decisions.

What to watch next: subsequent quarterly payroll data for the region and Indiana University Southeast’s future regional updates to see whether year-over-year growth continues to improve and whether the report’s view of Q1 as a trough is borne out.

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Sources

Linked source published October 15, 2026 at 12:00 AM EDT. A sourced news brief; no independent staff reporting is implied. Prepared with AI assistance from the linked research; material claims remain attributed in the article.

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