South of Louisville, KY, lies a sleepy little town named Shepherdsville. If you needed salt in the early 1800’s, Shepherdsville was the place to get it. As it turns out, this sleepy little town may be the next waking giant. Paralleling Interstate 65 around 12 miles south of the world air transportation hub for UPS (known as “Worldport”) in Louisville, Shepherdsville stands poised for phenomenal growth, provided that growth doesn’t outrun the city’s ability to handle it.
These favorable linkages have led to huge growth in the transportation and warehousing sector of the local economy. From the earliest figures available in 2007, transportation and warehousing already comprised 8.97% of the jobs in Bullitt County. This compares with a national average of only 3.76%. But get this – through 2011, the transportation and warehousing sector of the economy have grown to comprise 18.92% of the jobs in Bullitt County compared with a national average of still at only 3.75%. All this in only four short years.
So…what does this mean for the local economy? Well, let me see if I can explain. A location quotient measures the percentage of employment in a particular sector of the local economy against a national average. For example, if workers in the transportation and warehousing industry comprised 3.75% of the total number of workers in Bullitt County in 2011, it would equal the percentage of workers on a national scale, giving the transportation and warehousing industry a location quotient equal to 1.00. This would imply that money is neither entering or leaving the local economy as a result of activities in this sector of the economy. However, any sector of the economy with a location quotient above 1.00 is a basic industry, bringing money into the local economy (known as an export business).
Now let’s put things into perspective. The transportation and warehousing sector of the economy in Bullitt County (the location of Shepherdsville) has a location quotient of 5.05. In other words, employment in the local economy in the transportation and warehousing sector is over five times the national average. In short, a lot of smack is being pumped into the local economy.
In case you haven’t noticed, some world class businesses have selected Shepherdsville as a favored spot for their fulfillment centers, including one of my favorites, Amazon.com. C.B. Richard Ellis (CBRE), a fortune 500 real estate investment company (with some really, really, sharp employees) is constructing a million square feet of ‘speculative’ distribution space.
Jobs attract people who need housing, who buy groceries, who shop at local stores, who eat at local restaurants, who need the services of accountants, plumbers, and last but not least, appraisers. So, if you’re looking for opportunities to invest in real estate in the Louisville area, you might keep your eyes on Shepherdsville. My hunch is that this sleepy little town is waking up.