Local economic experts are predicting the economic outlook for south-central Indiana. Indiana Business Research Director Jerry Conover and Indiana State University Economics Professor Robert Guell didn’t mince words in their forecasts.
Conover said even though the Bloomington economy has long been insulated from the ups and downs of the national economy all that is beginning to change.
“As is true in many college towns with relatively stable employment at the university and community college… that keeps us from falling as fast. But that buffer has faded away a bit over the last several months,” Conover explained.
Overall, Conover placed Bloomington in the upper half of Indiana’s economic spectrum but not close to the top.
Guell described Terre Haute as having some real challenges to face. In the last year the community has lost a fair amount of industry, the most pronounced being Pfizer which took with it several high paying jobs to the tune of nearly a hundred thousand dollars a year. While there has been some new job creation, Guell says it’s not the same.
“Hiring three or four hundred folks, these are at the ten dollar an hour rather than eighty thousand dollar a year range… there’s no volume of those kinds of jobs that can make up for that significant loss at Pfizer,” Guell said.
Conover and Guell also touched upon the economic strains in the Kokomo area brought on by the closing of several auto plants.
When asked if the economic situation would get worse there was a resounding yes. Guell explained the mortgage problems of 2008 do not include negative amortization mortgages – where the mortgage payment is smaller than the interest due.
“This, the next wave, which will come later in the year and in the next year, is about mortgages that were just wrong– where you pay half the interest that you owe and your mortgage payment goes up by two and a half times when it resets,” Guell said.
Conover said there were many factors involved in predicting the recession’s end.
“And what makes it difficult to answer the question of when will we hit bottom economically is that so much really depends on action at the Federal level that has yet to be defined,”
Conover added. He pointed out that initiatives at the state level, such as infrastructure spending, can mean a lot of different things.
However, despite the their overall somber tones, Conover did say there are alternative energy industries in Indiana that hold a lot of potential even in the current economic climate.
“If the Federal stimulus pushes in that direction Indiana is well poised to try to tap into that and that could lead to some job growth,” he said.