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IU Economic Forecast Predicts Below Average Growth In 2016

By Network Indiana

Posted November 5, 2015

Indiana University's Kelley School of Business has released its 2016 Economic Forecast, and it's not all good news.

The forecast shows struggling national and worldwide economies are taking a toll on Indiana's economy.

Consumer spending currently remains OK, but Indiana Business Research Center Director of Economic Analysis Timothy Slaper says economic slowdowns in other countries could be having a negative impact.

"Business investment - that's lagging behind," Slaper says. "The government sector isn't going to be growing any time soon, and it looks like the world situation...China is slowing down, and Brazil is expected to have negative economic growth next year."

Slaper says while Indiana's economy doesn't look bad, it's somewhat tempered by what's happening on the national level.

The report predicts real output growth to hold at a very modest 2.5-2.7 percent next year.

"On the upside, we're still seeing strength in the auto sector," Slaper says. "We're on track to hit over 18 million units this year, which bodes well for the state."

Slaper says consumer optimism also clicked up by about three points.

"Overall, the economy seems to grow at about 3 percent, and we've been below that," he says. "You expect a big bounce back after the Great Recession, and we didn't see that."

Slaper adds policy uncertainty in Washington is also playing a big role in lack of economic growth.

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