IU economists: Slow growth expected in 2011

Back to TopCommentsE-mailPrintBookmark and Share

Economic growth will remain sluggish into next year as companies remain hesitant to add jobs, Indiana University economists said Thursday morning during their annual forecast.

“The past year has been one of disappointingly weak recovery, and sadly, we expect that 2011 will bring more of the same,” said Bill Witte, an associate professor of economics at IU.

The private sector lost more than 7 million jobs during the recession, which many economists say ended in June 2009. The number of unemployed has continued to grow since, Witte said.

Nationally, the unemployment rate in September was 9.6 percent, lower than Indiana’s rate of 10.1 percent.

Still, Jerry Conover, director of IU’s Business Research Center, expects Indiana to add jobs next year. The Hoosier state ranks fifth nationally in terms of job growth in 2010 and has regained about 18 percent of the jobs it lost. Most of the gains have been in private education and health care services, as well as in public-sector employment.

“Employment will continue to grow,” Witte said. “Even so, you won’t have enough growth to make a lot of progress against unemployment.

Payroll growth next year will remain at about its current 2 percent level, which would translate to about 50,000 new jobs, Conover said. But state unemployment likely will remain above 9 percent for most of 2011, he predicted.

“The increase is from a very weak base level,” he said. “We probably won’t hit pre-recession peak employment until 2013 or beyond.”

In Indianapolis, job growth in 2011 could be slightly better, between 2 percent and 3 percent, but still significantly below pre-recession levels, the panel predicted at its forecast held at the downtown Columbia Club.

Overall, the panel said the national economy will grow next year at a rate of about 3 percent.

“This will be a little better than 2010, but not enough to make much progress against the damage done during the recession,” Witte said.

Other highlights from the forecast:

— Hoosiers’ personal incomes will rise moderately, at a pace of about 3.5 percent.

— Inflation will be low, below 1 percent, as consumer spending rises very slowly.

— Residential construction will continue to struggle, preventing any significant housing rebound.

— Mortgage rates will remain low, though some rise from this year’s “bargain-basement” levels is likely.

— Energy prices are expected to rise moderately, but oil prices will stay below $80 a barrel.

— State and local budgets will remain strained by slow revenue growth, the disappearance of federal stimulus funds and weakened property values.

“All in all, it’s not a bad forecast,” Conover said, “but we’re not in the land of milk and honey yet.”


  • GOP to Blame
    It will be even harder to get people to come here to work, hard for people to stay here and work. With a governor slashing safety nets on unemployment benefits, and an agenda to slash and eliminate funding for health care and education, it is no wonder that the state will struggle to get its employment going. And it will be mostly burgers and minimum wage jobs that will not support a single person, let alone a couple, and worse yet a family. So much for Family Values GOP

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
thisissue1-092914.jpg 092914

Subscribe to IBJ
  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim