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November 16, 2013

PANEL: Local economic outlook better than state

National politics may dictate continued growth

(Continued)

NEW ALBANY — LOCAL AND STATE OUTLOOK

Overall economic figures were better at the state and locally than at the national level, but a major indicator for Indiana’s economy lagged behind. The state’s unemployment figures, and estimates through 2014, are expected to trail the national average.

Kyle Anderson, assistant professor of economics at the Kelley School, provided 10 factors that could influence Indiana’s economy next year.

One area of desired improvement is the state’s educational levels. Anderson said Indiana ranks 41st in the number of people with bachelor’s degrees in the country. The more educated a workforce, the more likely it is to be and remain employed. Also, unemployment in the state is expected to drop to about 6.8 percent by the end of 2014. It stood at 8.1 percent as of August.

For Indiana’s workforce overall, wages have increased in the state by 7.3 percent since 2008. While Anderson noted the increase, he said that the growth rate year-to-year has not kept pace with inflation.

“In real terms, we’re making less money now as a state in terms of wages than we were five years ago,” he said.

High-paying Indiana jobs that are not likely to make a significant comeback are manufacturing positions. Indiana is No. 2 in the country in terms of manufacturing output for a state’s percentage of Gross Domestic Product, Anderson said. However, manufacturing jobs only represent about 5.6 percent of jobs in the state. Anderson said it mirrors a changes that Witte mentioned, that companies have found more efficient ways to produce more products with fewer employees.

Jobs locally are expected to be more plentiful next year and the area will likely see an increase in payroll.

“Times are good right now in Southern Indiana,” said Uric Dufrene, executive vice chancellor of academic affairs at IUS. “The good news for 2013 is that we’ve finally surpassed the prerecession jobs peak. In 2014, we will likely see payroll growth that will parallel the growth that we saw in 2012.”

According to the forecast highlights, Indiana is expected to add 55,000 jobs in 2014.

“The first quarter for Southern Indiana in 2013 actually represents the best quarter since the start of the great recession,” Dufrene said in terms of new jobs.

He said while there has been a deceleration in some of the state’s major economic sectors, he believes because of pent-up demand there will continue to be growth in the manufacturing and housing markets, locally.

Even though local growth is strong, there are still challenges in the region.

“Discretionary dollars are still tight,” Dufrene said.

He cited casino admissions, which have declined as a model for the drop in discretionary spending. French Lick Casino and Horseshoe Casino saw drops in admissions year-to-year, from about 275,000 in 2012 to about 250,000 in 2013, and just shy of 600,000 in 2012 to about 550,000 this year, respectively.

Dufrene said the increase in casino competition may also have had an impact on the attendance figures.

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