Outlook Summary for 2003

The Big Picture
By the Kelley School of Business

Bill Witte on the National Forecast:
Gross Domestic Product is to approach 4 percent next year. This growth should be more broadly based than during the past two years, with significant help from business investment in new plant and equipment, and probably also from some inventory rebuilding. The economy could generate close to two million new jobs in 2004.

John Boquist and Bill Sartoris forecast the Financial Picture:
We expect to see a slight rise in interest rates during 2004. The stock market will continue to make gains, although at a less spectacular rate than in 2003.

Jeff Fisher on Housing:
Housing starts will continue near the same level of about 1.7 million to 1.8 million starts (single and multi-family). While a rise in interest rates will dampen housing starts, the continued economic recovery should offset this.

Jerry Conover and Jim Smith on Indiana:
We forecast an increase of only about 1 percent, or roughly 28,000 jobs. The unemployment rate should decline slightly, approaching 4.6 percent by the end of 2004.

Andreas Hauskrecht’s Global Forecast:
World economic growth will be around 4.1 percent, with an economic upswing for essentially all world regions, except Japan.

Indiana Metro Areas
By Faculty from Academia Statewide

Barry Ritchey on Anderson:
Income in the county continues to lag behind income for the state, which lags behind income growth for the country. That performance is a continuing trend for this community.

Morton Marcus on Bloomington:
The fundamentals of the Bloomington economy are unchanged and participation in the generally favorable economic scenario is likely.

Jim Smith on Columbus:
Our overall employment forecast is for a very slow rise in employment during 2004, adding perhaps 300 jobs in the county, with the unemployment rate expected to remain above 3 percent.

Gale Blalock on Evansville:
Our unemployment rate is less than the state’s and the nation’s. As the national economy continues to recover, the local economy is also likely to continue its recovery.

Tom Guthrie on Fort Wayne:
For 2004, the forecast is an increase between 2,500 and 5,000 jobs. Over the longer run, the capacity of the area to grow employment is likely about half that of the nation.

Don Coffin on Gary:
The local economy will continue its pattern of slower growth in output and employment than the national and state economies for yet another year. While total local output may be expected to rise by about 2.6 percent, this is likely to translate into a small employment decline.

Morton Marcus on Indianapolis:
Indianapolis stands to gain from major ongoing construction at the airport and an attractive retail environment, which draws shoppers from a wide radius. Even if the Indianapolis area were to add jobs at a 1 percent rate, the metro area would see a growth of 7,700 jobs.

Kathy Parkison on Kokomo:
Although the state and local loss of manufacturing jobs is still troubling, the national and state economies are poised to grow. This should also be true of the local economy.

Pat Barkey on Muncie:
An acceleration in the national economy will help the Muncie economy, but our experience of the last ten years tells us that it will take more than that for us to prosper.

Dagney Faulk on New Albany:
The coming year should generate an additional 900 jobs in the nonagricultural sector of southern Indiana, and unemployment rates should continue to decrease slightly.

Ash Veramallay on Richmond:
Rising employment in some industries (such as health care, education, and food) will offset job losses in the manufacturing sector, although certainly won’t offset loss in wages.

Paul Joray and Paul Kochanowski on South Bend and Elkhart:
We should see reasonable growth in employment and a reduction in the unemployment rates to the 3.5 percent to 4.5 percent range during the year, with lower rates near the end of 2004.