MERRILLVILLE | It takes more than picking a president to determine the direction of the economy.
Despite improvements in the U.S. economy this year, many Northwest Indiana business leaders say pitfalls remain after the local and national level after the November elections.
In a survey to rate the region's and nation's economic health, the 22 members of The Times Board of Economists said conditions have gotten worse in recent months compared to earlier this year. But they remain optimistic their individual business sectors and the overall economy will get better next year.
Roy Berlin, president of Berlin Metals, a Hammond-based steel service center, said he expects the nation's leaders to eventually figure out a solution to deal with the confluence of trillions of dollars of automatic federal spending reductions and tax hikes. Regardless of who is elected to serve in Washington, manufacturing and the economy will be affected by lower levels of activity in other parts of the world.
"There's some big picture issues that the president can't change," Berlin said at the Oct. 11 Board of Economists meeting at Innsbrook Country Club. "The recession in Europe, we have no control over that. A slowdown in China, you have no control over that and those things are huge."
On a 10-point scale with one being terrible and 10 being excellent, the Board of Economists members rated on average their individual economic sectors in the last three months performed at a 5.9 in the region and 5.6 at the national level. Individuals said their sectors will perform at an average of 6.6 in the region and 6.4 at the national level one year from now.
In all, 63 percent of board members, who represent sectors including manufacturing, retail, and casino gaming, expect their organizations to bring more revenue in the next six months.
One person who said the election could have a dramatic impact on their sector is local health care executive Gene Diamond. Diamond is CEO of Franciscan Alliance’s Northern Indiana region. He said the Patient Protection and Affordable Care Act's fate largely depends on whether President Barack Obama receives a second term or former Massachusetts Gov. Mitt Romney, who has pledged to weaken the rules of "Obamacare," is elected.
Diamond said the threat of federal spending cuts also is troubling. He said if the Franciscan Alliance loses even 2 percent of revenue it receives from Medicare, the system would have to reduce its workforce by more than 100.
"We'll see where all this goes, but between now and then, we're watching things carefully," Diamond said. "And that has had an adverse impact on our ability to plan very clearly for 2012. ... We do think we'll have to reduce our employment in some areas."
Higher levels of consumer confidence, home purchases by first-time buyers and investors, and a reduction of foreclosures on the market are helping to lift the local and national real estate markets, said Bill McCabe, broker/owner at Century 21 Executive Realty in Schererville.
Regardless of who is elected in November, McCabe said the industry is resilient and likely will recover from impacts of additional regulations. After new rules on mortgage lending were enacted in 2010, he said it could take as long as two months to get loans processed. Now, it takes about half that time.
"No matter who comes in we would like to see them modify Dodd-Frank because there's a lot of bad parts that are hurting us with our mortgages and the ability for people to get loans," McCabe said.
Passed as a response to the Great Recession, The Dodd–Frank Wall Street Reform and Consumer Protection Act brought significant changes to financial regulation in the U.S.
McCabe said the National Association of Realtors would like to see the current mortgage deduction maintained for homeowners.
Changes at the top of the nation aren't likely to bring relief to local governments, especially those in Lake County that have to deal with tax caps and a tax levy stuck at 2007 levels, said Michael Griffin, clerk-treasurer of the town of Highland.
Griffin said the recession combined with the caps have forced governments to become more lean. Now, the town of Highland is going to increase the amount of money it keeps in reserve to buoy itself against unexpected shortfalls.