Local economy grows slowly but surely

2014-01-18T23:00:00Z 2014-01-19T22:30:09Z Local economy grows slowly but surelyJoseph S. Pete joseph.pete@nwi.com, (219) 933-3316 nwitimes.com
January 18, 2014 11:00 pm  • 

Economic growth slowed in Northwest Indiana in the fall, but remained consistent.

The Northwest Indiana Coincident Index found the local economy grew by 1.25 percent over the past six months, which was on par with the nation's growth. The index has grown for 12 straight months, suggesting a sustained if limited recovery in the region, said Micah Pollak, an assistant professor of economics at Indiana University Northwest.

"Between August and November 2013, the Northwest Indiana Coincident Index continued to increase but at a slower pace," he said. "The index has now consistently grown every month for over the last year."

Indiana University Northwest professors developed the index in order to better take the pulse of the local economy. The gauge tracks a mix of local and national variables, including steel production, the Dow Jones Transportation Index and unemployment in the Gary metropolitan area.

The NWI Index rose to 136.7 in September from 136.4 in August. It ticked up to 136.9 in October, before reaching 137.1 in November.

Normally, the index is released monthly, but it was delayed because of the government shutdown in October. Federal agencies collect much of the data that economists use to measure economic well-being, such as unemployment rates and manufacturing hours.

Data showed average manufacturing hours increased by a negligible 0.1 hours, and that steel production stayed about flat since August. But U.S. retail sales increased by $5.9 billion, or 3.2 percent.

"Retail sales increased significantly in September, October and November," Pollak said. "While the bump in sales is likely due to holiday spending this is still promising news. Over the same period last year there was little increase in retail sales, suggesting consumers were feeling more confident about the economy and were willing to spend more for the holidays this year."

Another positive sign was that employment in the Gary metropolitan area rose by 4,900 employees, or 1.81 percent, over the three month period. The region has now recovered 21,000 of the 33,000 jobs lost during the 2008 recession.

Despite some encouraging news, Pollak forecasts weak growth of about 1 percent over the next six months. That's slightly slower than during the previous six months.

"While the outlook for manufacturing and transportation are excellent this is offset by a housing market that is beginning to slow and stabilize after a period of strong recovery, the effects of the government shutdown continuing to dissipate, and some of the financial uncertainty surrounding the potential slowing of quantitative easing," he said.

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