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Business publication predicts 3.2 percent growth in Indiana in 2019

December 25, 2018

A publication tied to Indiana University's Kelley School of Business forecasts the state's economy will expand in 2019 by a healthy 3.2 percent, though it said growth could start to wane later in the year.

Indiana Business Review also indicated that history suggests a decade-long U.S. and Indiana economic expansion may be coming to an end of its natural cycle, with the country potentially slipping into recession, The Times of Northwest Indiana reported Tuesday.

Among the factors that could stunt growth are disruptions in trade as the Trump administration presses ahead with a strategy deploying tariffs against China and other nations.

China, Canada, Mexico and the European Union have targeted for retaliation some $2 billion in annual Indiana exports, which amounts to 0.5 percent of the state's economy, the forecast said.

Its author, Ryan Brewer, an associate professor of finance at Indiana University-Purdue University Columbus, said Indiana will see the strongest growth in the first quarter of 2019, spurred by tax cuts that led to business investment.

"Tailwinds include rising wages and consumer spending (and) potential for further capital investment," Brewer wrote. "Headwinds include uncertainties with ... trade, political unknowns, labor shortages and the effects of weaning off of inexpensive credit."

Indiana in 2019 will likely continue to see growth in jobs and wages, the economic review concluded . But indications that it could be in the latter stages of a business cycle include stabilizing low-employment numbers and rising short-term interest rates.

The Indiana Business Review is a quarterly publication of the Indiana Business Research Center at Indiana University's Kelley School of Business.

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