ANDERSON – The local Madison County economy received a shot in the arm in the past few years and the growth is expected to continue, said Terry Truitt, dean of the Anderson University Falls School of Business.
Truitt and three professors from Indiana University delivered the economic outlook for 2016 at Tuesday’s meeting of the Anderson Rotary Club at the Anderson Country Club.
Truitt said the positive decrease in the area’s unemployment rate dropped from 12.1 percent in 2010 to 6 percent in September while Madison County added over 3,000 jobs since 2013.
He said the gap between Madison County’s unemployment rate and the rate for the rest of Indiana has narrowed over the past few years.
“In 2016, employment will continue to increase,” Truitt said. “The unemployment rate will decline by between .8 and 1.4 percent to a range of 5.1 percent by the end of the year.”
Truitt said a number of companies have moved into the Anderson area creating 1,400 potential jobs and the expansion of local businesses will add another 489 jobs.
“There have been several mayoral changes in Madison County,” he said referring to the election of new mayors in Anderson, Elwood and Alexandria. “We can hope they put political differences aside and move the communities forward.”
Jerry Conover of the IU Kelley School of Business said conditions in Indiana are similar to a year ago.
He said that a year ago the prediction was the Indiana economy, based on gross national product, would grow by 3 percent. Conover said the state’s economy underperformed.
Conover said it was forecast that Indiana would add 55,000 new jobs in 2015 and the state has already added 57,000 jobs, according to the September figures.
“The momentum will continue,” he said. “We’re expecting 45,000 jobs will be added in 2016 and the unemployment rate will be in the 4 percent range.
Conover said economists are expressing caution for 2016 based on exports from Indiana.
“There is expected to be weak growth in the economies of China, India, Russia and Brazil,” he said. “Indiana has seen good export growth in the past few years, but the weakness abroad and the value of the dollar could impact that growth.”
Vehicle sales in 2015 are expected to reach a record 18 million units, which is good for the state because a lot of the production takes place in Indiana, Conover said.
“As long as sales continue, that’s a good sign for Indiana,” he said.
Kyle Anderson of the IU Kelley School of Business said the U.S. unemployment rate has dropped to 5 percent, which is close to what is considered full employment.
“That’s the lowest since 2009,” he said. “There is not a lot of room for the unemployment rate to go down.”
Anderson said only 62.4 percent of the people over the age of 16 are considered part of the labor force, which is down from the peak of 67 percent in 2000.
“We have an aging population and students are staying in school longer to get advanced degrees,” he said of the shrinking labor force. “There are a number of people that would like to work, but lack the skills.”
Anderson said there is a slowdown in the global economy with the Chinese economy slowing significantly and only a 1 percent growth rate in Europe.
He expects there will be a small increase in interest rates in 2016 and the inflation rate should remain low.
Anderson said employment and wages are expected to increase in 2016 in the U.S.