After weathering some difficult times over the last few years, there are encouraging signs that central Indiana has turned the corner on its road to economic recovery. The Indianapolis metro area added 22,000 jobs in the year ending in March-a 2.4-percent increase-and in May, the Indiana unemployment rate dipped below the national average for the first time since December.
All signs point to continued modest growth. Patrick Barkey, IBJ contributor and Ball State University economist, says, "We should expect to see the state unemployment rate slowly fall for the rest of the year." That seems to reflect the consensus: There won't be any dramatic turnaround for Indiana-our economy is still skewed towards a cautious manufacturing sector-but we can look forward to steady progress.
But perhaps the best way to investigate greater Indianapolis' economic fortunes is to do a little "windshield research"-get in the car and drive around. After all, there are many indications of a bricks-and-mortar recovery, led by strong construction and commercial real estate sectors.
Starting at the heart of our city, there are dramatic signs of continued vitality. The new Simon Property Group Inc. headquarters, the Conrad Hilton, residential growth, the expansion at IUPUI-all of these contribute to a sense of momentum downtown. Vacancy rates continue to drop for downtown office space, and Indianapolis Downtown Inc. reports more than $385 million in major projects completed in 2004.
Pausing to enjoy the view of the Central canal, you can reflect on the growth in life sciences. At the head of the canal, the Indiana University Emerging Technologies Center and the Clarian Health Partners Pathology Lab site are emblematic of the city's strong focus on life sciences; an estimated $1.1 billion in life sciences construction projects representing 1.9 million square feet of space are slated for completion by 2010.
Heading west, you'll soon find yourself in the midst of another growth area. The expansion of Indianapolis International Airport is a boon for our already significant distribution-logistics sector. FedEx plans to double its cargo capacity here, and companies like Duke Realty and Browning Investments are adding warehousing space on the west side and in Plainfield.
From the airport, jump on Interstate 465 and head north. The north side is the strongest area for another promising segment of our economy- retail. In 2004, several shopping centers came online in northern Marion and Hamilton counties-Clay Terrace in Carmel, Stony Creek Market Place in Noblesville, Cool Creek Crossing in Westfield, Traders Point in northwest Indianapolis and more. In 2005, the outlook for retail development remains strong. Consumer confidence continues to grow, and nearly a million square feet of retail space is in progress on the north side, with more projects scattered across the region.
Taking Interstate 65 back through downtown toward the south side, you'll be entering another recovering area. The signs here may not be as dramatic, but you'll likely see more cars in the parking lots of office complexes. Office vacancy rates dropped 7 percent on the south side in 2004, the largest drop in any Indianapolis "sub-market," according to Colliers Turley Martin Tucker. The overall Indianapolis office vacancy rate is at its lowest point in three years.
A quick drive around town really can tell you something about the local economy. In this case, commercial real estate and construction are indicators of confidence in a continued regional recovery. If anything, there's a danger of speculative building that could outpace demand, driving down the value of real estate investment as interest rates continue to rise.
But looking at the overall picture, growth trends are positive for greater Indianapolis, and every change to our skyline or new development right down the street is a good sign. Don't wait for the economists to tell you -do a little "windshield research" and see for yourself.
Branic is greater Indianapolis president of Regions Bank.