Business executives in Northwest Indiana battled an economy on the verge of collapse and are now seeing the seeds of economic growth.
But that doesn't mean the road to recovery will be smooth.
Credit concerns abound and national unemployment remains near a 30-year high, but the stock market has shown signs of life, and crude steel production is stronger now than it was a year ago.
"We think the economy itself is doing well," said Don Nelson, first vice president of investments at Merrill Lynch in Merrillville. "Seventy-five percent of the companies that reported their earnings and revenues in the last quarter beat the estimates by the analysts on the (Wall) Street."
Eleven business leaders who are part of The Times Board of Economists attended a Feb. 10 meeting at the Patio Restaurant in Merrillville to discuss their continued plans to slog through the recession.
The 22-member board comprises representatives from sectors including health care, manufacturing, government, construction and banking.
Board members said in a survey that in 2011, their business sectors would perform in the region and nationally at an average score of 6 on a scale of 1 to 10. A score of 1 means very poor performance, and a 10 means excellent performance. On average, board members said Northwest Indiana's economy will slightly outperform the national economy a year from now.
This score was about 20 percent higher than when they rated their sectors' performance three months ago.
In another sign of an economic boost, Tim Roper, of Smith Auto Group, said General Motors Corp. and Ford Motor Co. are ramping up vehicle production in anticipation of having a better sales in 2010 than a year earlier. Roper said difficulties remain for car buyers because there are still barriers in financing.
Wall Street's performance is improving, but local communities are still troubled by economic conditions.
Money is tight on Main Street -- more specifically Ridge Road. Mike Griffin, clerk-treasurer for Highland, said conditions may get worse with property tax caps being placed in the Indiana Constitution. Since banks have been "a little stingy" in opening up credit lines to municipalities, Griffin said the stimulus-funded Build America bonds have helped start infrastructure projects in the town.
David Rose, Northwest Indiana market president for Horizon Bank, admitted banks have pulled back lending but said it's only because they're being cautious about losses and regulators are paying more attention to loan quality. Rose expects more banks to fail this year, even as economic fortunes improve.
"It was a lot more fun being a banker 10 years ago," he quipped.
Nelson said the Obama administration has been quick to bash banks for their practices but added those actions don't help investor confidence.
Price stability is just as important as consumer demand when it comes to the retail sector, said Tom Collins Sr., president of Hobart-based Luke Oil and co-owner of County Line Orchard.
He said crude oil prices have hovered between $65 and $70 a barrel, which is pushing down profit margins not only for oil refiners but for local retail locations as well. Demand is down and last year Indiana stations' profit margins were 4.8 cents per gallon, which ranked No. 48 out of 50 states.
"You can see what we're up against selling retail fuel, that's why I like selling apples," Collins said.
Bill McCabe, broker/owner of Century 21 Executive Realty in Schererville, praised the first-time home buyer's tax credit, which stimulated home sales, but he said it probably won't be extended past an April 30 deadline.
McCabe believes that despite depressed levels of credit and consumer confidence, real estate will be in an "improving market" in the next few months.
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