(Photo by Adam Aasen)
Last January, economic Michael J. Hicks journeyed through a near-blizzard to give his annual economic forecast speech to the Carmel Chamber of Commerce.
This year, the roads are a lot smoother.
“The forecast for both weather and economy are getting better,” he said. “When I was here last year, the economy was in a free fall. Maybe, it was because it was negative seventeen outside, but there was also still uncertainty regarding health care costs.”
Hicks, a professor at Ball State University and a columnist for the Indiana Business Journal, spoke at the chamber’s January luncheon, predicting good news for Indiana’s economy. Hamilton County should look even better than most parts of the state.
He forecasts that Indiana’s gross domestic product and job growth will be higher than it was in 2014. He thinks that Indiana’s GDP will increase more than half a percent better than the nation in 2015. He puts national GDP growth at 2.7 to 2.9 percent with Indiana’s GDP growing around 3.3 to 3.4 percent.
Hicks predicts that job growth will increase next year and the unemployment rate will decline to 5.7 percent by the end of 2015. The bad news is that Indiana’s wages won’t rise as fast as some other places and the income gap between Indiana and other states will lessen.
Hicks mentioned that low gas prices around $2 a gallon should continue which will mean reduced costs for companies and more money in consumers’ pockets.
In Hamilton County, Hicks puts population growth at 2 percent with wealth growth at 5 percent, meaning that from when your kids are born to when they graduate college their standard of living will have doubled. He said the continued urbanization of Hamilton County is great for its economy.
“This remains a popular place to be some sort of headquarters activity,” he said. “So the structure of this economy will resemble more the rapid growth we see in urban areas nationally. Rural places aren’t growing as well.”
He said Indiana will continue to remain strong when it comes to manufacturing products, but unfortunately Indiana’s efficient production might mean fewer employees are needed.
Other local professors had different views on Indiana’s economy, but agreed that it looked strong.
A panel of economists from Indiana University’s Kelley School of Business agreed that the economy should finally break out of its rut, with GDP growing 3 percent nationally in 2015, but Indiana trailing shortly behind.
“Indiana’s GDP grew more quickly than the U.S. in 2010, about twice as fast as the nation,” said Timothy Slaper, research director of the Indiana Business Research Center in the Kelley School. “In the three following years, Indiana’s economic output growth rate was a tad behind the U.S., and 2014 is expected to close the year at just a fraction off the national rate. This trend – being just a half step behind the national average growth rate – is forecasted to continue through 2017.”
Kyle Anderson, clinical assistant business economics professor at IU, is more optimistic than Hicks when it comes to wage growth in Central Indiana.
“For the first time in years, employees will have more leverage and employers will need to give wage increases to keep valuable employee,” he said.
Tim Monger, president of the Hamilton County Economic Development Corporation, said he was encouraged by Hicks’ remarks.
“I think the key is isolating it down to this particular region,” he said. “I think Hamilton County will continue to see considerable growth.”
