Long-Range Projections Summary
The quarterly U.S. forecast of May 2013 was used as the basis for this long run projection. As shown in the Table below, that forecast showed real GDP growth averaging 2.5% over the period 2013-2016. Employment was expected to rise at a 1.5% rate, while consumer inflation averaged 1.5%. That forecast reflected the lingering effects of the 2008-2009 recession. Over the period 2017 to 2034, real GDP growth is above the near-term performance. It is basically equivalent to that projected in February 2013. Our projection of employment growth, on the other hand, is somewhat lower than in February, reflecting a lower assumed growth in the labor force. The long-run growth in both output and employment are in line with our assumptions about long-run potential. Inflation is low in both the near-term and the long-run.
|Total Establish. Employment|
The Indiana long run projection uses our May 2013 short run control forecast as its basis. Parallel to the U.S., the resulting long-run projections for employment are somewhat lower than our February 2013 projection.
For the projection of the industry gross state product variables (GSP), we used the GSP historical data released in June 2013 which covers the period 1997 to 2011. Productivity is defined as the ratio of GSP to total employment in an industry. Projections of productivity together with projected sectoral employment levels are used to calculate GSP. Our productivity estimates for the state are a little higher than those in February. When combined with employment growth the result is that GSP growth in this projection that slightly below that in our previous projection.
The average growth rate of total Gross State Product over 2013-2034 is projected to be 2.8% per year. Over the same period total Indiana employment is projected to grow at a 0.8% rate, with employment in manufacturing falling at a 0.1% rate, and in non-manufacturing growing at a 0.9% rate.