January, 2014

Northwest Indiana Forecast 2014

Northwest Indiana Forecast 2014

From:  Indiana Business Review

 

Based on the Northwest Indiana Coincident Index, the economy in Northwest Indiana grew 1.6 percent between August 2012 and August 2013. Figure 1 shows the Northwest Indiana Coincident Index since 2008. In August 2013, the index rose to a new high of 136.4. While this is favorable news, this growth is less than the 2 percent growth that was forecasted one year ago by the index. Furthermore, Northwest Indiana grew at a slower pace than both the state of Indiana and the nation during this same time period. The coincident indices published by Federal Reserve Bank of Philadelphia show the state of Indiana grew by 3.3 percent and the United States grew by 2.9 percent.

Figure 1: Northwest Indiana Coincident Index, January 2008 to August 2013

Figure 1: Northwest Indiana Coincident Index, January 2008 to August 2013

Source: Northwest Indiana Coincident Index

The slower economic growth in Northwest Indiana can primarily be attributed to the types of jobs in the region, particularly the high concentration of employment in manufacturing. Figure 2 shows the top five industries by earnings in the Gary metro area. These industries are manufacturing, health care, government, construction and retail trade. More than 25 percent of earnings in Northwest Indiana come from manufacturing jobs. This high concentration of earnings and employment in a single industry means it is harder for the region to adapt to changing economic conditions as all our eggs, so to speak, are in one basket.

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