SCHERERVILLE| Every year, the Indiana University Kelley School of Business rolls into Teibel's Restaurant in Schererville for its annual Economic Outlook, and every year of late it's been the same projection.
Expect more slow growth next year.
"It's our own version of 'Groundhog Day,'" said Robert Neal, an associate professor of finance at the Kelley School of Business at Indiana University in Indianapolis. "We're stuck in the same low-growth economy over and over again."
However, Indiana's gross domestic product has risen by 4.7 percent this year, which well outpaces the national rate of 3.2 percent, said Micah Pollak, Indiana University Northwest assistant professor of economics. Northwest Indiana's growth is only 0.3 percent though.
"There's little, if any economic growth," Pollak said.
Economics professors at the annual event, which is staged by the Lake County Advancement Committee, said many factors were to blame, including the need for more human capital, better infrastructure and less restrictive government regulation.
In Northwest Indiana, steel production is down by about 10 or 11 percent this year, largely because of weak international demand and a strong U.S. dollar that makes imports cheaper, Pollak said. And the jobs in construction – another well-paying industry that's big in the Region – also are declining.
Union construction workers in the Region clocked 2.4 million hours during 2013, the last year of the major BP Whiting Refinery modernization project. That dropped to 1.6 million hours last year, and the Region is on pace for only 1.4 million man-hours on union construction projects this year, Pollak said.
The big problem is good jobs are disappearing, which has a ripple effect because it drags down household income, Pollak said. Manufacturing and construction jobs that pay good $25 or $30 an hour wages are vanishing, and being replaced by retail jobs that pay $10 to $15 an hour and have fewer benefits.
But there's reason to be upbeat, because Indiana has gained 59,700 jobs so far this year with income growth that's higher than the national average, said Tim Slaper, director of economic analysis at the Indiana Business Research Center. The state is benefiting from a projected 18 million vehicle sales this year, and a 3 percent boost in the consumer sentiment index, which indicates more people will buy durable goods.
"The good side is rising auto sales, and the bad side is sagging auto growth," Slaper said.
The state faces other challenges, such as the a U.S. Environmental Protection Agency crackdown on coal will raise energy costs and make the state less competitive on cost, Slaper said.