By: ANTHONY AYALA
IU South Bend Judd Leighton School of Business and Economics hosted its Annual Business Outlook Panel. Dean Rick Kolbe, of the Leighton School, moderated the panel which consisted of four speakers all from Indiana University. The discussion reviewed economic factors that could influence 2019, including policy decisions that will affect business globally, nationally, statewide and locally in the Michiana region.
Ellie Mafi-Kreft, clinical assistant professor of Business Economics and Public Policy from IU Bloomington, spoke on the Global and U.S. market. Mafi–Kreft explained there will be a greater divergence in economic growth around the world. She also explained in 2018 the world economy did rely solely on one market to increase growth. However, she also expects the Chinese economy to slow down which could create worry for global economy.
Ryan Brewer, associate professor of Finance from IU Columbus, spoke on the financial market. Brewer explained the United States is not at an inflation point. However, the effects of the last recession are still impacting current business conditions. Brewer, also stated despite the chilly trade relationship between China and the U.S. the dollar is strong.
John Waters, clinical associate professor from IU Bloomington, discussed Indiana’s outlook with some favorable factors. Waters projected the state’s economic growth for 2019 to be approximately 3%. He backed this by Indiana’s 65% labor force participation leading to Indiana having the lowest unemployment in a percent state region, including Ohio, Michigan, Illinois and Kentucky. Other positives include a 57.7 % business confidence level and a 138% consumer confidence level, the highest it has been in 18 years. He further expects about four thousand new jobs in the coming year.
However, Waters reminded, “Indiana is more volatile than [the] U.S. when going into recession. Indiana is [the] number one manufacturing state in the country per GDP[gross domestic product].”
Hong Zhaung, director of Bureau of Business and Economics Research and associate professor of Economics from IU South Bend, discussed the economic outlook for the Michiana region. Zhaung explained the region grew about $1.6 trillion and is up 6.26% in GDP. However, that is a combined growth for the Michiana region, she added the majority of the growth came from the cities of Elkhart and Goshen. Together the cities added $1.54 trillion in GDP and 11.31% in output. While South Bend and Mishawaka added $71 million in GDP.
Speaking about new job creation and unemployment rates, Zhaung again examined the differences in growth between Elkhart / Goshen and South Bend / Mishawaka.
Elkhart and Goshen also added 61,000 new jobs which created employment for roughly 63 thousand people. While the cities of South Bend and Mishawaka added 16,000 new jobs, employing approximately 17,000 workers. Zhaung added the manufacturing sector, which added 5,500 new jobs, is the number one job creator for the region. Not surprising, these jobs were located in the cities of Elkhart and Goshen. South Bend and Mishawaka saw the largest job increase in the leisure and hospitality industry which added 1,500 jobs.
Although Elkhart and Goshen added more jobs to the region, their unemployment rate stayed about the same as last year at 2.9%. While South Bend and Mishawaka added fewer jobs but saw a -.17% decrease in unemployment rates resulting in an overall rate of 4.01%.
It seems as though Elkhart/Goshen would feel a larger impact by a recession. While South Bend and Mishawaka may be moving at a slower economic growth rate, the diversification in jobs may be helpful in times of a recession. All the information provided by the panel is a lot to think about when considering future employment opportunities.