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Economy in recovery mode, at last
The Times Board of Economists

Economy in recovery mode, at last

  • Updated

The nation finally is in the grip of an economic recovery, with job creation, business investment and earnings all pointing upward, according to region business leaders.

"Despite all the naysayers, the recovery is real," Bruce Quint, resident director at Merrill Lynch's Merrillville office, said at the first quarter meeting of The Times Board of Economists.

A rising stock market is just one indicator. The Dow Jones average of blue chip stocks is up about 5.5 percent so far this year after rising 5.6 percent in 2011. The Nasdaq average is up more than 10 percent so far this year.

It is not just those playing the market who feel life might be getting a little better. General Motors Co. is once again the world's leading carmaker, with sales up 13 percent in 2011, according to Autodata Corp. Chrysler sales were up 26 percent, and Ford was up 11 percent.

"We are bringing back jobs to the U.S.," said Tim Roper, owner of Smith Motors Auto Group. "We are not there yet, but it's the first time we're seeing GM and Ford adding thousands of jobs and bringing back jobs from around the world."

When they last met in October, the 22 business leaders who make up The Times Board of Economists downgraded their ratings of both the local and the national economy from the previous quarter. That was more than two years after the "official" end of the recession.

This time, at a Feb. 8 meeting at the Lost Marsh Clubhouse in Hammond, they boosted their ratings. They gave their individual business sectors an average score of 6.3 on a scale of 1 (terrible) to 10 (excellent), compared to 5.9 last time. For the regional economy, they raised their score to 6 from 5.3.

And they expect even better days ahead. A year from now, they expect the region's economy to be performng at an average score of 6.8.

That doesn't mean those who direct the region's job-creating machine are breathing a sigh of relief. The brutal lessons of the Great Recession remain fresh.

Everyone took it to heart when consumer confidence rose in November and December, said Gail Zurek, an area director for the Better Business Bureau in Northern Indiana. But then it fell back in January.

Just like businesses, consumers are using credit less and saving more after the hard lessons of 2008.

"Consumers are frugal," Zurek said. "They have been through a lot. We heard here (at the meeting that) some businesses found they were fat. And I think some consumers found they were fat."

Local media companies are on the comeback trail, as people turn more and more to someone they trust for information on their communities, said Radio One President Leigh Ellis.

Revenue last year beat forecasts by about 5 percent at the Northwest Indiana radio station chain, and revenue beat forecasts by about 7 percent in January. Still, business people remain wary.

"That cautiousness is still there" Ellis said. "Is it better? Yes. I don't think it could have gotten worse."

There is also some fear that election-year politics could derail the recovery or at least slow its pace, according to several board members.

Still, the overall direction of the economy is now unmistakable, with the U.S. Bureau of Labor Statistics preliminarily reporting that 243,000 jobs were created in January. The unemployment rate continued to trend downward, now standing at 8.3 percent.

Steel mills may not be expanding their workforces, but they are hiring because a demographic bulge of older workers is now retiring, according to Jim Robinson, USW District 7 director for Indiana and Illinois.

"We are seeing an uptick in manufacturing, and we have been seeing it for a while now," Robinson said. "In Northwest Indiana in particular we are seeing a steady stream of new hires."

In construction, megaprojects such as the $3.8 billion BP Whiting Refinery expansion, NIPSCO generating station upgrades and work at steel mills have led to a surge in construction hiring in Northwest Indiana, according to William Hasse III, president of Hasse Construction.

"This is so much different," Hasse said. "This is contrary to what happened in 1981-82 when we lost manufacturing jobs. Here we are even importing crafts workers from other states to work on our construction projects."


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