Anderson University economist: Local economy expected to continue growth

The annual Economic Outlook featuring Truitt and three Indiana University economists provided encouraging news Tuesday at the Anderson Rotary Club meeting.

Truitt said the local economy is expected to provide more employment opportunities after adding 5,500 jobs in the past five years and 1,900 positions over the last year. 

He projected a 1.5 percent increase in 2019 in job creation.

“The Madison County area has struggled the last few decades,” he said. “It has turned around the last few years.”

Truitt noted the marked improvement in the area's unemployment rate. It was 12.1 percent in 2010, but was 3.3 percent in September.

He projected the unemployment rate at 3.1 percent over the next year.

“The job market is hot in Indiana and Madison County,” Truitt said. “There are 800 to 900 jobs to be filled in Madison County.

“We need more people in the workforce,” he said. “We need to prepare people for the jobs that are here.”

Mark Fohlich, of IU Kelley School of Business, said Indiana had a good first three quarters of 2018 and he expects good consumer spending in the final quarter of the year.

“Indiana has the lowest unemployment rate in the region,” he said. “Next year should be another good year for Indiana.”

Fohlich expected the Indiana economy to grow at 3.2 percent in 2019 with higher wages and new start-up companies.

“There is an extreme shortage of skilled workers,” he said of the problem employers have in Indiana. “Indiana can’t come up with enough qualified workers.”

Fohlich said Indiana lags behind other states in the region when it comes to venture capital for start-up companies.

He did warn that rising interest rates could affect Indiana because of the number of automobile companies and suppliers in the state.

“Our state has been targeted by China,” Fohlich said of the trade war. “It has cost Indiana $1.1 billion through retaliation by China.”

He said the state needs to prepare for the next recession, which everyone acknowledges is coming after the recent nine years of economic growth.

Bill Witte, of IU Kelley School of Business, projected the national growth rate at 3 percent, which is about the same as for this year.

He said although the projections were that job growth would slow to between 170,000 and 175,000 jobs per month, the average for the first 10 months of 2018 has been 213,000 new jobs each month.

Witte expects job growth in 2019 to be 200,000 per month.

He said the national unemployment rate of 3.5 percent is the lowest since the 1950s and 1960s.

When asked about the growing federal budget deficit and trade war impact on farmers, Witte said the deficit has not had a noticeable impact on the national economy.

“It has always been an issue,” he said of the debt. “We owe most of the debt to ourselves, so the Federal Reserve can print more money, which will raise inflation rates.”

Witte said the trade war with China is impacting agriculture. 

Fohlich said it has cost Indiana $2 billion in exports.

“In the future, more farmers will be planting corn and other crops instead of soybeans,” he said.

Fohlich said China is doing some bluffing when it comes to trade with the U.S.

Charles Trzcinka, of IU Kelley School of Business, said the impact of the deficit and trade is coming, but nobody is certain when it will happen.

“There is a lot of uncertainty in the farm sector,” he said. “A resolution has to come.”