Slump sets Hoosier job levels back 14 years

December 26, 2009

At least the worst appears to be over. The economy in 2009 was the most painful in many people’s memories—rivaling the misery of the infamous Rust Belt years more than a generation earlier.

Indiana took a shellacking as businesses desperate to survive the recession laid off swaths of workers. The economic decline, which started gaining momentum in late 2008, went into steep descent before leveling off in mid- to late summer.

How bad was it? The 131,000 jobs lost in the 12 months ended in November amounted to a 7.2-percent decline and were nearly equivalent to the combined populations of Carmel and Fishers.

Automotive, recreational vehicles and other transportation-related sectors—the state’s bread and butter, absorbed massive hits.

Transportation-related manufacturing jobs absorbed massive hits this year. (IBJ File Photo)

The carnage ran so deep that the nearly 2.8 million jobs the state has left are the fewest of any time since 1995.

The Indianapolis area fared better. Employment withered 3.7 percent in the past year, to 873,000.

Part of the loss resulted from the decision by Illinois-based Navistar International Corp. to close its longtime engine-block plant on the east side, throwing nearly 1,400 out of work.

The good news, Ball State University economist Michael Hicks said, is that Indiana’s economy will improve in 2010, driven by gains in manufacturing, transportation, construction and information technology.

He said the state economy will show slow but steady growth through all four quarters of next year, but employment numbers won’t return to pre-recession levels until 2011 or 2012.

Hicks said Indianapolis will continue to be the state’s economic engine, attracting top employers and workers from around the country. However, smaller cities will not see this rapid growth due to an aging labor force and structural changes in key sectors of their economy, Hicks said.

The Ball State analysis calls for manufacturing to expand 1.24 percent in the first quarter, 1.96 percent in the second, 2.41 percent in the third and then drop to a still respectable 1.76 in the final three months of the year.

Hicks predicted a challenging future for many of the workers who lost manufacturing jobs during the recession.

“We have thousands of older people who spent decades working in moderate- to low-skilled positions in manufacturing operations around the state. Many of these workers suffer significant skill deficits in today’s workplace,” he said.•



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