A new report from Indiana University says the state’s economy is expected to expand in 2020, but not by much. The forecast by the Kelley School of Business said Indiana’s economic output will grow by about 1.25 percent, a number which is being attributed to the outsized presence of manufacturing and particularly tight labor markets. However, the state is expected to remain at or below full employment through all of 2020.
This story by Alex Brown originally appeared in Inside INdiana Business.
Nationally, the forecast says the economy is only expected to expand by about 2 percent.
Indiana University said Indiana continues to lead the U.S. in manufacturing employment with more than 17 percent of its jobs in the sector. The university cites data from the Institute for Supply Management, which shows manufacturing activity has slowed to its lowest rate since the beginning of the Great Recession.
On a national level, the forecast says U.S. employment has grown during 2019 but will decelerate throughout 2020. The report says the country could see fewer than 150,000 jobs per month, possibly down to about 100,000 by the end of the year.
“The total number of job openings in the economy peaked in late 2018,” said Bill Witte, associate professor emeritus of economics at Indiana University. “Average hours worked have been flat over the past year, and auto sales have been flat for nearly two years. Given the reliance of the U.S. economy on consumer spending, these are disturbing signs. But they are vague signs, and not enough to convince us that the end of the expansion is in sight. We expect that growth will be weaker than in the past two years, and this outlook is likely a best-case outcome. There is massive uncertainty in the current situation.”
