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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. By Mr. Lee's own admission, he basically ran pro-bono ads on the billboard. Paying advertisers didn't want ads on a controversial, ugly billboard that turned off customers. At least one of Mr. Lee's free advertisers dropped out early because they found that Mr. Lee's advertising was having negative impact. So Mr. Lee is disingenous to say the city now owes him for lost revenue. Mr. Lee quickly realized his monstrosity had a dim future and is trying to get the city to bail him out. And that's why the billboard came down so quickly.

  2. Merchants Square is back. The small strip center to the south of 116th is 100% leased, McAlister’s is doing well in the outlot building. The former O’Charleys is leased but is going through permitting with the State and the town of Carmel. Mac Grill is closing all of their Indy locations (not just Merchants) and this will allow for a new restaurant concept to backfill both of their locations. As for the north side of 116th a new dinner movie theater and brewery is under construction to fill most of the vacancy left by Hobby Lobby and Old Navy.

  3. Yes it does have an ethics commission which enforce the law which prohibits 12 specific items. google it

  4. Thanks for reading and replying. If you want to see the differentiation for research, speaking and consulting, check out the spreadsheet I linked to at the bottom of the post; it is broken out exactly that way. I can only include so much detail in a blog post before it becomes something other than a blog post.

  5. 1. There is no allegation of corruption, Marty, to imply otherwise if false. 2. Is the "State Rule" a law? I suspect not. 3. Is Mr. Woodruff obligated via an employment agreement (contractual obligation) to not work with the engineering firm? 4. In many states a right to earn a living will trump non-competes and other contractual obligations, does Mr. Woodruff's personal right to earn a living trump any contractual obligations that might or might not be out there. 5. Lawyers in state government routinely go work for law firms they were formally working with in their regulatory actions. You can see a steady stream to firms like B&D from state government. It would be interesting for IBJ to do a review of current lawyers and find out how their past decisions affected the law firms clients. Since there is a buffer between regulated company and the regulator working for a law firm technically is not in violation of ethics but you have to wonder if decisions were made in favor of certain firms and quid pro quo jobs resulted. Start with the DOI in this review. Very interesting.

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