Woes in the nation's housing market will cut growth and incomes the rest of this year and possibly into 2008, said one of the economists, Bill Witte.
"There will be some growth, but it certainly won't be very good," Witte said. "And that's the upside."
Detailed versions of the forecast are available only to the utilities, banks and other customers who pay for them.
Still, Witte said he and his colleagues expect job growth continuing at less than 1 percent and real personal income growth increasing about 2.2 percent, slightly less than anticipated in the August forecast.
International sales are a bright spot, he said. Economies in Asia and elsewhere in the world are performing better than the U.S. economy, so they are importing American goods. And the low value of the dollar makes American products more affordable to foreign buyers.
As long as manufacturing remains reasonably strong nationally, Indiana's manufacturing sector likely will move forward and keep the state economy afloat, Witte said.