News From Terre Haute, Indiana

Local & Bistate

Discussion

Welcome to our online comments feature. We welcome your thoughts and your opinions, including unpopular ones. We ask only that you keep the conversation civil and clean. We reserve the right to remove comments that are obscene, racist or abusive and statements that are false or unverifiable as well as posts that are attacking other users. Repeat offenders will be blocked. You may flag objectionable comments for review by a moderator.
comments powered by Disqus
February 3, 2012

Expert sees ‘slow slog’ ahead for economy

Forecast considers variety of factors

Howard Greninger The Tribune-Star

TERRE HAUTE — While optimism flickers, the Wabash Valley and Indiana economy may see a “slow slog” this year amid a flat housing market, unemployment and political unrest.

“The overall economy for 2012, I think, is going to be like [Indianapolis Colts quarterback] Peyton Manning’s right arm. Everything looks like it should work, but there is just no velocity there,” said Robert Guell, Indiana State University professor, Thursday during the 16th Annual Groundhog Day economic forecast at ISU.

Gross domestic product, or GDP, measures the sum of all goods and services produced in the United States, minus imports, and is seen as the broadest indicator of the economy’s health and activity.

The adjusted real gross domestic product in the fourth quarter of 2007 was $13.3 trillion, Guell said.

“The real GDP indicator for the fourth quarter of 2011 was $13.4 trillion. It has taken us five full years to drag our butts out the recession. The recovery has been the longest in getting us back to the previous peak since the Great Depression,” he said.

The premise is that economic growth happens when the GDP recovers to a level equal to that at the beginning of the recession.

“Still, we are not in the position of dealing with mass layoffs,” Guell said. “The mass layoff numbers for Indiana were three times higher in December 2008 than in December 2011, both in numbers of people and numbers of events. Mass layoffs are not on the horizon,” he said.

“I see a slow slog, like driving through the fog,” for the economy in 2012. “In my estimation, there is nearly no chance of a really good year economically. A really good year would be GDP growth above 3.5 percent, but it will more likely be 2 to 2.5 percent and even that can be tripped up” by a European debt crisis, Guell said.

• ‘Flat’ housing market here

Brian F. Conley, president of Conley Real Estate Appraisals Inc., said Vigo County’s housing market is relatively flat in growth in the Multiple Listing Service. As of Wednesday, 515 houses were listed for sale.

“The average price for Vigo County in 2011 was $99,534, which is down from $102,424 in 2010, or a decrease in value of 2.82 percent,” Conley said. Statewide the average price paid in 2011 was $135,183, with the average price increasing 1.7 percent.

The median price paid in Vigo County increased 3.59 percent to $82,871 in 2011; statewide, it rose to $112,900, a 0.08-percent increase.

“I think with our average price going down 2.82 percent and our median price going up 3.59 percent, basically you say our [Vigo County] market is flat,” Conley said.

One bright spot is that Vigo County has 102 pending sales as of Wednesday, an increase of 5.15 percent from 2011. In addition, the supply of homes on the market fell from 8.14 months to 7.5 months, a 7.86-percent decrease, Conley said.

Statewide, there was a 7-percent increase in the supply, he said. When an area exceeds a six-month supply of homes, it falls into an oversupply, Conley said. “Terre Haute is in a much better situation in terms of supply than the state,” he said.

Conley said Terre Haute’s average home sale supply over the past 12 years is just over seven months. “Although we have an oversupply situation, it is really not that bad,” Conley said, adding it is near an all-time low. “If you have a good quality home, that is priced correctly, now is the time to put it on the market,” he said.

However, the average price paid for homes remains flat, with the average price paid in 2007 at $95,232, while that average was $99,534 in 2011, Conley said. In addition, there are 30 fewer Realtors in Terre Haute as of the end of December.

• Political effects ‘toxic’

One other factor to the economy in 2012 comes from politics, which “can be toxic for the economy,” Guell said.

Guell, who said he is a conservative Republican, specifically referred to Indiana’s becoming the 23rd right-to-work state, which came with Gov. Mitch Daniels’ signature on legislation this week.

“Every union dollar in the country that is not pointed at Wisconsin will be pointed at Indiana and Indiana business,” Guell said. Indiana’s 2012 election “could generate leaders that are much more sympathetic to labor than business as a result of this recent choice by the Indiana Chamber of Commerce to win politically,” he said.

“I believe its practical impact will be negligible at best and deadly at worst,” he said of the right-to-work law. “The upside is only marginal because private employment in Indiana in closed shops is less than one-tenth of that employment,” he said.

“We have forgotten in the country that politics is about joint progress and not about just winning. Winning at all costs has become an economically costly activity,” Guell said.

• Slight hint of optimism

Despite that forecast, Terre Haute has received some good economic news with the announcement of a $120 million investment over five years from NantWorks LLC to employ 234 workers by 2016. In addition, ThyssenKrupp Presta plans an expansion to add at least 80 new workers.

Such projects help improve “the mindset of a community and the potential to create some economic momentum,” said Gerry Dick, president and managing editor of Grow INdiana Media Ventures LLC and creator and host of Inside INdiana Business.

Dick said he sees Indiana holding its own economically, with a slight hint of optimism for business growth in 2012.

He referred to an INdiana Business Council 2012 outlook survey in mid-January from Indianapolis-based Walker Information Inc. that found that 47 percent of 900 respondents expected their companies to be hiring this year, 7 percent more than a year ago.

A business confidence index, which had fallen to 60 percent in December, is now at 64 percent, the same as the start of 2011.

“We are sensing there may be a level of optimism that may be on the rise,” Dick said.

In addition, nearly 74 percent of respondents in the survey believe Indiana’s economy will improve in 2012, “but only 25 percent thought the national economy was headed in the right direction,” he said.

Dick said manufacturing remains an important part of the Indiana economy. He pointed to Chrysler’s plans to invest $1.3 billion in Kokomo, plus expansions to engine maker Cummins in Columbus, as well as Subaru in Lafayette, as well as Honda’s adding another 1,000 workers in Greensburg.

• Workforce key to Indiana’s future

Dick said one main concern in 2012 is attracting and retaining young talent for a trained workforce. One increased focus has been on the arts, culture and trails as a way to attract and retain young talent, a move taken in cities such as Columbus, Fort Wayne and Indianapolis.

Dick referred to Terre Haute’s symphony and arts corridor area as additional examples. “The things that Terre Haute is doing to support arts and culture, I think, are more than just a feel good thing. I think communities around the state are beginning to realize there is an impact in terms of the ability to create a workforce,” he said.

The workforce is the primary concern. “We are continuing to hear from CEOs around the state that they are concerned in attracting a skilled workforce,” Dick said. He referred to Wabash National Corp., which makes semi-trailers, and Brightpoint America, which distributes wireless devices across the country, as having trouble finding workers with required technical skills.

“It is not just the skilled workers. It is also the softer skills, too,” he said, such as showing up to work on time and working as a team with other workers. “I think that is underlying concern in terms of the future of the Indiana economy, not just this year, but long-term in terms of focusing on workforce,” Dick said.

Douglas F. Esamann, president of Duke Energy Indiana, said the power company has guarded optimism for 2012.

That is based on increased power demand, which has risen in the past three years. Residential power demand is up 4.6 percent, while commercial demand is up 2.5 percent.

The biggest increase has been from industrial power demand, up 13.3 percent, Esamann said.



Howard Greninger can be reached at (812) 231-4204 or howard.greninger@tribstar.com.

Text Only | Photo Reprints
Local & Bistate
Latest News
Multimedia

Like us on Facebook!
Community Calendar
Loading…
Events by eviesays.com
TribStar.com Poll
Front page
AP Video
NJ Man Charged With Murder in Death of Patz 50 Years Later, Underground Fire Still Burning Dragon Arrives at Space Station in Historic 1st Police: Gunman Has Hostages in Realty Office Passenger Restrained on Flight to Miami Arrested Support, Fun for Kids of Fallen Soldiers at Camp Beer Here!: An Historic Exhibit Raw Video: Unruly Passenger Restrained in Miami Fugitive Penguin Caught, Returned to Aquarium Light Show Transforms Sydney Opera House Raw Video: Robber Uses Drive-thru Window Raw Video: Dragon Arrives at Space Station Calif.'s Coronado Named Nation's Best Beach Raw Video: SpaceX Capsule's Docking Delayed Texan Ranchers Remain Wary of Drought Vegas Grocer Deported to Face War Crimes Charges Raw Video: Toddler Trapped in Washing Machine CEO Salaries Become Sore Issue in Labor Disputes Raw Video: Wildfire Burns 110 Square Miles Raw Video: Soldiers Plant Flags at Arlington
NDN Video
80-Year-Old Skydiver's Nightmare Jump JWoww Sizzles in a Black Bikini Sliders on the Grill Cruise ship crunch Backstage With Beyonce Ultimate Creamy Potato Salad Pope's Personal Butler Under Arrest Jenny McCarthy's New Man Tyler's Classic Coleslaw Britney Spears Under X Factor Fire Flesh-Eating Bacteria Victim Hits Milestone Hurricanes and Heat Waves Across America Kristen Stewart Is Red Hot Shark Attacks Australian Fishing Boat Bradley out for playoffs Kayaker Survives Trip Over Washington Waterfall Alison Brie Likes To Jog Naked Raw Video: Robber Uses Drive-thru Window Heidi Klum Goes Sheer Alton's Best Burger Ever
Parade
Magazine
Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
  • -

    March 12, 2010

activity
Real Estate News