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State's economy still stuck in neutral

IBJ Staff
December 24, 2011
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Treading water. Spinning its wheels. Stuck in a rut.

There are many glib phrases for the economy in 2011, and they are all apt.

The year started with a sense that slowly—not fast enough for anyone’s liking—but steadily, Indiana’s economy was coming back. But then a spike in gas prices and the never-ending sovereign debt crisis in Europe created a summer of setbacks.

Employment in Indiana actually peaked in July 2010, on a seasonally adjusted basis, and has never quite reached that same level since. The state had 2.79 million workers in October 2011, the most recent data available. It had exactly the same number a year ago.

Average weekly wages for private workers trended down most of the year until spiking in October to a new high of $744.50. Could that augur better days to come?

Yes and no, says Ball State University economist Michael Hicks. Productivity gains have slowed way down, which suggests businesses will have to do more hiring if they want to keep expanding. But any improvements in overall economic vitality will be gradual, not dramatic.

“Unfortunately, I’m predicting next year as a redux of this year,” Hicks said.

Things are certainly brighter in Kokomo, where a resurgent Chrysler Group LLC is keeping its factories humming and even paying overtime to its 3,500 workers there.

Manufacturing in general has steadily improved this year. The sector still employs far fewer people than it did when the recession began in December 2007. But manufacturers added 6,000 jobs this year, and hours worked and wages paid were trending up in October.

Also, temporary hiring has been rising since the summer, which usually signals that companies are bringing on new workers, hoping to convert them to full-time hires later on.

But there could be shocks, particularly if heavily indebted Greece or, even worse, Italy, defaults on its bonds. That could create a European banking crisis that, if not disastrous for the United States, certainly wouldn’t be helpful.

In the Indianapolis area, the number of jobs grew during the first quarter, then plunged, hitting lows not seen since 2003. In October, the metro area had 865,500 workers—about 3,700 fewer than it had at the end of 2010.•

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  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

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