SCHERERVILLE — A quartet of Indiana University economists reviewed a persistently good-but-not-great economic recovery Friday on the third stop of a 10-stop Economic Outlook tour around the state.
Three professors from IU Bloomington and one from IU Northwest delivered their annual economic outlook during a meeting of the Lake County Advancement Committee at Teibel’s Restaurant.
“The good news is the bad news doesn’t look too bad; the bad news is the good news doesn’t look too good,” said Robert Neal, a professor of finance in IUB’s Kelley School of Business.
The Kelley school forecast predicts U.S. gross domestic product growth of about 2 percent in 2017, near the norm since the Great Recession.
Neal said the first four years after a recession typically see a total of 17 percent growth in GDP; the first four years after the last recession saw about 7 percent growth.
“That’s a lot of money,” Neal said.
Ellie Mafi-Kreft, an assistant professor of business economics and public policy, said negative feelings about the economy internationally are probably too gloomy.
She said the international economy should grow 3.4 percent in 2016. “Pessimism seems to be overshooting reality,” she said. “Things are not so bad.”
Part of the problem is Europe, where financial and refugee crises and the pending exit of the United Kingdom from the European Union make things “a lot more gloomy.”
The mixed forecast continued closer to home. Marketing Professor John Cady said GDP growth in Indiana should end up at 3 percent this year, and IU is predicting 2.8 percent next year. Those are numbers that should outpace growth nationally, he said, reversing a post-recession trend of slower growth in the state.
One bright spot has been employment: IU’s forecast for 2016 was 50,000 new jobs, but the state has seen growth of 109,000, mostly in construction and the leisure/hospitality industries.
Micah Pollak, an assistant professor of economics at IUN, said a new index he and a colleague developed shows a “gross metropolitan index” of about $29.4 million in Northwest Indiana during the past year. That’s about 9 percent of Indiana’s economy, and is about as large as Vermont’s, he said.
But local growth is lower than the state’s and nation’s, he said. And GMP per capita is down a slight amount, even as employment has grown.
Pollak predicted a 1.5 percent growth in GMP in 2017, and 0.5 percent employment growth.
A shift to a service-based economy is largely to blame, Pollak said, and many of those jobs are lower paying retail and food service jobs.
“We need to expand our strategy” regarding job growth, he said, to focus on high-paying service jobs rather than traditional manufacturing.