Economic expectations: Indiana's metro areas in 2017
Economists from around the state shared their forecasts for Indiana’s metropolitan economies during the Indiana Business Outlook Panel tour and in the online edition of the Indiana Business Review. Here are some highlights describing how our panel of experts predict local employment will change in 2017.
Dr. Terry Truitt, Anderson University
The employment picture for Madison County is expected to continue its positive trend in 2017, but at a much slower pace. While the improving economy will likely draw a number of previously frustrated unemployed individuals back into the labor force, another drop in the local unemployment rate is expected. The best estimate is an unemployment rate of about 4.9 percent for 2017. The number of employed in Madison County is expected to modestly increase by about 1.0 percent in 2017, with the number of jobs expected to hit just over 58,000.
Dr. Jerry Conover, Indiana University
The Bloomington metro area has experienced very limited job growth for many years. The IBRC’s Center for Econometric Model Research forecasts 2017 employment growth of about 2.1 percent (2,300 jobs) for the Bloomington metro area and personal income growth around 4.2 percent (around $300 million). Such outcomes would be the strongest in several years, ranking Bloomington in the top few Indiana metropolitan areas.
Dr. Ryan Brewer, Indiana University–Purdue University Columbus
With 45,000 people in its labor force plus access to 1.7 million people within a 45-minute commute, Columbus could be positioned to experience another year of economic prosperity in 2017. However, due to complications arising from global weakness, automotive and class 8 engine sales moving toward lower levels, upward pressures on interest rates, struggles for Cummins in key businesses worldwide, increasing difficulty for new corporate prospects to find workers in the low unemployment environment, and rising wages, Columbus is most likely to experience net flat job growth—or even slight contraction in 2017.
Elkhart-Goshen and South Bend-Mishawaka
Dr. Hong Zhuang, Indiana University South Bend
More residents are expected to join the labor force actively looking for jobs; meanwhile, employment will continue to grow in both metropolitan areas. Unemployment rates will most likely remain stable at around 4 percent for the Elkhart-Goshen metro and 4.6 to 4.8 percent for the South Bend-Mishawaka metro (with seasonal fluctuations throughout the year). The employment decline in the manufacturing sector of Elkhart-Goshen in 2016 could be temporary, and this sector is likely to hire more workers in the next year. The most job growth in South Bend-Mishawaka is predicted to occur in private educational and health services.
Dr. Mohammed Khayum, University of Southern Indiana
Relatively strong growth in the education, health care, and leisure and hospitality sectors in 2016—combined with increases in personal income and announcements of future fixed investments—provide the basis for projecting increased output, income and employment in 2017. In 2017, the number of jobs in the Evansville metro is projected to increase by 1,800, while the unemployment rate is projected to be 4.2 percent.
Dr. Hedayeh Samavati and Dr. Zafar Nazarov, Indiana University–Purdue University Fort Wayne
Forecasts for the Fort Wayne metro in 2017 paint an encouraging picture. In 2017, the unemployment rate is predicted to be in the 4.5 to 4.7 percent range, which is slightly above the current rate. The number of individuals in the labor force is expected to increase to 223,085, which is 2 percent growth relative to the 2016 level. Finally, the number of employed workers will increase to 211,661, or a 1.5 percent increase relative to the current year.
Dr. Micah Pollak, Indiana University Northwest
In 2017, the Northwest Indiana economy is expected to grow by 1.5 percent, with regional employment expanding by 0.5 percent. That amounts to the creation of approximately 1,500 jobs—almost all of which will be in the service sector. While any growth is good news, this forecast is likely to be significantly slower than the growth for both the state of Indiana and the nation overall.
Dr. Kyle Anderson, Indiana University
Overall, the Indianapolis economy continues to be fairly healthy. The region is at full employment, with more than 1 million jobs in the metro, and continued job growth will ensure that it stays there. However, given the low level of unemployment, job growth may taper off in 2017.
Dr. Alan G. Krabbenhoft, Indiana University Kokomo
Kokomo is already operating at a level that most economists would describe as full employment. The overall forecast for the region for 2017 suggests very modest increases in the level of employment. Strong dependence on the automobile industry leaves the region (and the state) heavily dependent on the economic health of the broader U.S. economy, as well as that of much of the rest of the world.
Tanya Hall, Purdue University
The Lafayette metro has rebounded from the Great Recession in a sustainable fashion with slow and steady growth—albeit frustratingly slow at times. Looking toward the future, there is little doubt that growth will continue, thanks to a diverse industry portfolio and strong university connection. In 2017, the local unemployment rate should continue to range between 3.5 and 4.5 percent due to steady economic growth, and the region may gain an additional 2,800 jobs.
Dr. Uric Dufrene, Indiana University Southeast
In 2017, the Louisville metro will see moderate growth, but Southern Indiana will continue to experience quarters of impressive gains due to the River Ridge commercial area and the completion of the Ohio River Bridges Project.
Dr. Dagney Faulk and Nathanial Law, Ball State University
The Muncie-area economy showed several positive changes over the past year. The unemployment rate decreased over the course of the year, even as the labor force reached pre-recession levels. In 2017, we expect a small gain in employment (0.7 percent growth), while the unemployment rate should remain in the 5 percent range as people continue to enter the labor force looking for jobs.
Dr. Lee Zhong, Indiana University East
The 2017 outlook is optimistic based on the most recent survey of the business community, though uncertainties in domestic and global markets could hamper our region’s growth. Local unemployment will remain in the 5 to 6 percent range, and most industrial and trade sectors will have relatively small increases in labor demand.
Dr. Robert Guell, Indiana State University, and Dr. Kevin Christ, Rose-Hulman Institute of Technology
Static conditions in those areas that have traditionally been the area's engines for economic growth make it difficult to see where significant new jobs and business activity will arise from in the near term. The outlook for 2017 continues to be one of stagnation and slow decline.
Visit www.ibrc.indiana.edu/ibr to read the in-depth metro analyses, as well as projections for the nation, state, financial markets and more.