Strong economy forecast for region in 2014
BY KAREN CAFFARINI Post-Tribune correspondent December 13, 2013 6:10PM
Updated: January 15, 2014 6:11AM
MERRILLVILLE — A Ball State University professor and economist forecast a strong economic year for Northwest Indiana in 2014, fueled largely by the manufacturing, construction and transportation industries.
Michael Hicks, director of the Center for Business and Economic Research and economics professor at the Muncie university, told area business and education leaders on Friday that the region will fare better than the nation, with a modest 3,900 new jobs created, the gross domestic product growing by 3.1 percent and personal income growing by 2.4 percent locally.
Comparatively, the national GDP is expected to grow 1.9 percent to 2.1 percent, Hicks said Friday in offering his 2014 economic forecast for the country, the state and the region. The event, sponsored by Northern Indiana Public Service Co. and the Northwest Indiana Forum, was held at the Radisson.
Hicks predicted construction would grow by 2.6 percent, but warned interest rates could change that number.
“Housing and construction rebounded in 2013, then interest rates increased and housing stalled. I hope interest rates don’t rise a lot. I worry about construction crashing. This is one of a few industries where unskilled young workers can advance into being a skilled worker,” Hicks said.
Hicks believes manufacturing of durable goods will have a record year, increasing 3.6 percent.
He predicted health care will drop slightly, due to uncertainty surrounding the Affordable Care Act.
“Hospitals don’t know what their Medicaid reimbursement will be,” Hicks said. “I worry about the healthcare issue. This area will lose healthcare jobs.”
He said other declines in the region include wholesale and retail trade, information services, finance and insurance, professional and scientific services, arts and recreation and government.
Don Koliboski, director of economic development with the Northwest Indiana Forum, said manufacturing continues to be the No. 1 job source in the region.
“We’re following a national trend of restoring more manufacturing jobs to the U.S., especially in the auto sector. We’re showing a lot of growth in that area,” Koliboski said.
Construction also concerns Koliboski, but not necessarily just on the housing end.
He pointed out that the BP modernization project, the largest public works project ever in the state, as well as projects at U.S. Steel, NIPSCO and ArcelorMittal are either winding down or completed.
Koliboski said he has hopes that in the event the Illiana Expressway is built, it will provide economic opportunities along that new corridor.
“We have people looking for 100 acres along an expressway. They don’t want four or five acres,” Koliboski said.
He reported that the Northwest Indiana Forum was recognized for its regional approach to development by the Area Development Consultants Forum, which Koliboski said is one of the top-rated development organizations.
The award was given at the group’s conference in Charleston, S.C., earlier in the week.
“When we go to the conferences, they see us differently, they see us as having a regional approach,” Koliboski said.