The Times Board of Economists

Optimism blooming among Board of Economist members

2014-05-03T17:30:00Z 2014-05-05T16:09:07Z Optimism blooming among Board of Economist membersJoseph S. Pete joseph.pete@nwi.com, (219) 933-3316 nwitimes.com

MERRILLVILLE | The refrain has been familiar almost every time The Times Board of Economists has met over the past few years: The economy is improving but slowly, more slowly than anyone would like.

But members of the 24-person board, which represents an array of local industries, started humming a somewhat more upbeat tune at their most recent meeting at the Radisson Hotel at Star Plaza. Several board members voiced more optimism about the economy's direction in the short term, after a harsh winter that kept consumers holed up in front of their Netflix queues and prevented iron ore from making the voyage to local steel mills. They spoke of rising sales, new hiring and backlogged construction projects. 

"Generally, all our customers are busier this year than last year," said Roy Berlin, president of steel service center Berlin Metals in Hammond. "With this recovery there's been no 4 to 5 percent increases in GDP from year to year. It's been 1.5, 2 or 3 percent. But our company has done well."

Berlin Metals' first-quarter sales have risen by 5 or 6 percent, and Berlin said he sees continued momentum behind the upswing.

Board members are more optimistic about how their sector will do over the next three months than they were when they last met in January. The group average of forecasts for the regional economy was 6.8 out of a scale of 10, as compared to 6.4 in January. The average view of how the national economy will do over the same period also rose to 6.8, as compared to 6.6 earlier in 2014.

But the optimism is tempered and could just reflect a seasonal uptick. Outlooks for how the economy will do a year from now — 6.7 regionally and 6.8 percent nationally — have dipped slightly since the last meeting.

Still, members pointed to bright spots in the local economy after the long gray winter. Few customers ventured onto snow-blanketed dealership lots in January and February, but car sales have since rebounded, said Tim Roper, owner of Smith Motors Auto Group, which operates Chevrolet dealerships in Hammond and Lowell. General Motors sales rose by 3 percent in March, and sales at his dealerships have posted a 10 percent gain so far this year.

Rising auto sales benefit steelmakers, who are expecting a 4 percent increase in shipments this year, said Susan Zlajic, manager of government affairs at ArcelorMittal USA Inc.

"We're cautiously optimistic," she said.

On the small retail front, Rosemary's Heritage Flowers in Crown Point has seen business pick up enough that owner Rosemary De St. Jean hired two additional employees to keep up. Other shop owners she has talked to reported similar gains, with one even seeing sales double to about $4 million last year.

Construction is down 20 percent compared to last year as a result of the winter and the wind-down of the $4.2 billion BP Whiting Refinery project, said William "Bill" Hasse III, president of Hasse Construction. But that mega-project employed 14,000 skilled tradesmen and drew in many from outside the area.

"The market is fairly strong," he said. "We're backlogged with work, and now they want contractors to do 12 months of work in a nine-month period."

Opportunities for contractors abound, such as with many manufacturing and logistics companies moving to Northwest Indiana from Illinois to take advantage of the lighter tax bills and overall lower cost of doing business, Hasse said.

Porter County continues to attract major development projects, said Rex Richards, president of the Valparaiso Chamber of Commerce. Pratt Industries invested $260 million in a new manufacturing facility, which is the third-largest investment in county history after the ArcelorMittal Burns Harbor steel mill was built more than four decades ago and the new Porter Regional Hospital that was constructed two years ago.

"There's renewed interest from national retail companies," he said. "By the middle of next year, another major retail firm should locate in Valparaiso. That says good things about the economy and the vibrancy of our community."

The agriculture sector is also thriving, Porter County farmer Tim Stoner said. Corn and soybeans are up 16 percent so far this year.

"It's a good time to be a farmer," he said.

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