Local News / November 6, 2013

Panel Expects Moderate Economic Improvement In 2014

Sam Klemet
Panel Expects Moderate Economic Improvement In 2014

A panel of Hoosier economic experts is touring the state over the next two weeks, discussing what to expect next year and beyond.

Indiana University’s Kelley School of Business 2014 Business Outlook Tour kicked off Wednesday in Indianapolis with experts weighing in on the national, state and local economies.

"What you have really is three years now running of what I have come to call 'zombie growth,'" said Associate Professor Emeritus of Economics Bill Witte. "It's alive, but living dead."

He expects less than two percent growth this year and next and says to move at a faster pace, leaders in Washington need to instill more confidence.

"There are a lot of things that are just creating uncertainty and I think that uncertainty shows up in the lack of business willingness to invest and to hire," said Witte.

The panel expects the state to add about 40,000 news jobs this year, fewer than each of the previous two years.

"The number of unemployed Hoosiers, I'm glad to report, is back to where it was five years ago," said Jerry Conover, Indiana Business Research Center Director.  "For awhile, we had a lot higher rate than the normal in the depths of the recession.  But, even at a five year ago number of unemployed, that's still a quarter million Hoosiers out there looking for work."

He says one of the reasons unemployment isn’t going down more rapidly is because of gains in productivity.

"This is a worldwide phenomenon. So, we don't need as many people to put out the same amount of good," said Conover, who thinks the state will add 55,000 jobs in 2014.

Locally, Clincial Assistant Professor of Business Economics Kyle Anderson believes Indianapolis will reach full employment levels by 2016 - similar to what Conover projects for the state - and says even though growth is slow, it’s starting to pick up.

"We are seeing basically a decade's long strategy of revitalizing downtown - obviously Marion County is more than just downtown - but, I think that's where a lot of the growth is taking place," said Anderson. "We are seeing that strategy, I think, really pay off with a lot more economic activity within the county."

He says economic activitiy in Marion County is growing about one percent over the past few years, up from a half-a-percent in the 1990s and early 2000s.

"The surrounding counties basically had all the growth and now it's about equal," said Anderson, who added that Indianapolis needs to add 43,000 jobs to reach a "manageable" four percent unemployment rate.

He said 16,000 were added in the last year and expects between 15,000 and 20,000 next year.

The Business Outlook tour includes nine stops wrapping up Nov. 18 in Richmond.