The author of the economic forecast for 2016 from the Indiana University Kelley School of Business characterizes it as "suspiciously upbeat" for the state. Indiana Business Research Center Research Director Tim Slaper, who is one of the panelists kicking off the first stop of a statewide tour of the information this morning in Indianapolis, says he is "less pessimistic" about Indiana’s future economic picture than he is for the rest of the country. He says nationally and internationally, housing, government, business investment and export growth levels are all expected to be off, which will have an impact on Indiana’s economy next year and beyond.
At the U.S. level, forecasters say "disappointment over a struggling national economy this year likely will continue into 2016, as any gains are likely to be modest." The biggest factor, they say, is the condition of the global economic picture, which is not particularly strong heading into the next year.
IU Associate Professor Emeritus of Economics Bill Witte is one of the many panelists on the tour that will crisscross the state over the next two weeks with stops in Anderson, Bloomington, Columbus, Fort Wayne, Indianapolis, Kokomo, New Albany, Richmond, Schererville and South Bend. He says "looking to the year ahead, we see little reason for any real optimism. We think the economy can match the past year, or perhaps do a little better. For growth to move significantly higher, some sectors will need to improve relative to this year. The sectors that have been solid, such as consumer spending and housing, could hold their own but realistically have only limited upside. Other sectors, including business investment, international trade and government spending, seem unlikely to fill the void."
Witte, Slaper and other expect real output growth nationally to be in the 2.5 percent range, which is equal to 2014 and slightly better than this year.
Here in Indiana, Slaper anticipates a "slightly faster" gross domestic product growth rate next year. “Given Indiana’s status as a manufacturing powerhouse, its GDP could be boosted by strong demand for industrial machinery and automobiles. One should be mindful that the state’s fortunes don’t rise and fall with the auto sector. Thanks in part to pharmaceutical and medical device sales, the state bounced back from the Great Recession relatively strongly in 2010 — twice the national rebound — even as auto sales hovered around a mere 11.5 million units."
He says the state’s employment picture, which currently sits at its lowest rate in eight years, has exceeded expectations and national performance and believes the good news on the jobs front will continue. “It is expected to continue to drop until it is significantly below the ‘go-go’ times of July 2007, when it had dipped to 4.5 percent
Tim Slaper tells Inside INdiana Business a few factors will play in Indiana’s favor.