CROWN POINT | Compared with the slowly growing national and state economies, Northwest Indiana’s economy remains flat and is in exactly the same place it was 20 years ago.
Bala Arshanapalli, professor of finance at Indiana University Northwest, delivered that message at Friday’s Morning Business Hour at First Financial Bank.
The bank hosts the monthly meetings that draw dozens of business owners and representatives from area businesses, industries and educational institutions.
“We are no where near where we were in the late 1990s,” said Arshanapalli, the Gallagher-Mills Chair of Business at IUN. “There is substantial room for growth.”
The gross domestic product continues to experience the effects from events in the fourth quarter of 2012, he said. Uncertainty over the election, the fiscal cliff and increased taxes has caused a drop in consumer and business spending, investments and government spending during the fourth quarter, he said.
“Hopefully, this quarter will be better,” Arshanapalli said as part of his economic outlook for 2013.
However, of most concern is Northwest Indiana’s economy, he said
Last year, Arshanapalli and Professor Emeritus of Economics Don Coffin developed the Northwest Indiana Index, which looks at specific factors in the region’s economy. Those factors include steel production, retail sales, manufacturing and local employment. It is published first in The Times monthly.
“Steel production is flat,” Arshanapalli said, adding that the steel industry isn’t any longer a major employment source.
“They are using the same number of workers, but having them produce more,” he said about employment at local steel mills. Health care and social services account for the most growth in the region.
“For the last 20 years, there has not been much upgrowth. We are where we started in 1992.” the economics professor said.
Arshanapalli said the region needs an influx of new residents, especially those who currently live and work in Chicago. The lower housing costs and lower property taxes here should be touted, he said.
“We are overshadowed by Chicago,” Arshanapalli said.
Getting people to their jobs in Chicago might take thinking outside the box, including using ferries to transport workers from the major lakefront areas into the city, as is done in New York City, he said.
There also needs to be emphasis placed on education, on reducing the brain drain of young people moving out of the area seeking employment and on spotlighting what’s positive about the entire Northwest Indiana region, Arshanapalli said.
“The politicians are not doing their job,” he said. “They are not promoting Northwest Indiana (as a whole). … The region has to work together.”