94 years of economic insights for Indiana

The IBR is a publication of the Indiana Business Research Center at IU's Kelley School of Business

Indiana’s outlook for 2019

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Associate Professor of Finance, Indiana University Division of Business, Indiana University–Purdue University Columbus

The endless expansion

Since the inception of America, which began 242 years ago, no economic expansion has lasted longer than 10 years (120 months, trough to peak, to be exact).1 The longest U.S. expansion lasted from March 1991 to March 2001 and generated annualized real GDP gains of 3.6 percent throughout the period.2 In contrast, the current ongoing expansion has now lasted over nine years and has, thus far, generated annualized real GDP growth of only 2.2 percent.3 In fact, Chandra and Golle (2018) point out that since 1950, economic expansions have been characterized in part by generally longer expansionary periods, as well as generally decreasing GDP growth rates.

Because the U.S. economy has been improving for so long, many economists and finance practitioners are starting to wonder about the end of this business cycle. Some economists have said expansions “do not die of old age.” On this topic, several important questions are raised: Do expansions really not die of old age? If this current expansion does end, when will it do so? Why will it end? Will declines in growth in Indiana come before, concurrent with or after declines in growth in the U.S. economy? Would a recession be more or less severe in Indiana?

For business and personal financial planning purposes, Hoosiers would like to know whether the current economic bliss seen over the last two years will continue. If not, what are steps Hoosier leaders could consider to help reduce the ill effects of a recessionary environment?

Outlook for 2019

We expect Indiana’s economic output to grow at a rate of 3.2 percent in 2019, driven in large part by tax cuts, which have spurred business investment. While investments have slowed at last count, the effect of previous investment is expected to drive productivity numbers leading into the coming year, adding to strength provided by consumer spending. The economy appears poised to see its strongest growth in the first quarter of 2019, after which growth rates are expected to slow but remain strong through the end of 2019. Tailwinds include rising wages and consumer spending strength, as well as potential for further capital investment. Headwinds include uncertainties with international trade, political unknowns, labor shortages and the effects of weaning off of inexpensive credit.

For the upcoming calendar year, it is most likely Indiana will continue to experience growth across the board—in jobs, numbers of establishments, income levels (which is buttressed by capital investments), wages and gross state product (GSP). Common to late stages of business cycles, we are seeing stabilizing low unemployment rate numbers, rising wages and rising short-term interest rates as a measure to control inflation. Recent corporate tax cuts have been yielding improved business confidence and expected continued investments. However, even while businesses will yield productivity gains in coming periods, labor tightness in Indiana is an issue that could countervail, or at least attenuate, gains made by business investment.

GSP: Econometric modeling suggests that U.S. economic growth (as of fourth quarter 2018, on a rolling four-quarter arithmetic average basis) will cool somewhat throughout 2019.4 Indiana economic growth measured in rolling four quarters of output is expanding right now with the coming year’s output expected to peak in the first quarter of 2019, with subsequent rolling-four-quarter growth measurements likely to slow, yielding an expected annual growth in 2019 of 4.5 percent, unadjusted from its baseline forecast indications. By fourth quarter 2019, however, modeling suggests the rolling-four-quarter growth rate will have cooled to 3.5 percent.5 On an annualized quarterly basis, output is expected to peak in Indiana in the fourth quarter of 2018, with unadjusted annualized quarterly growth expected to measure 4.9 percent (2018 Q4) with subsequent quarterly annualized growth rates measuring 4.8 percent, 4.5 percent, 4.0 percent and 3.5 percent, respectively.6

Taxes

The National Federation of Independent Business (NFIB) randomly sampled 20,000 NFIB member businesses across the country between February and April 2018, to investigate the effect of federal tax cuts on small businesses. The survey indicated that 76 percent of small businesses believe the current business climate is headed in a positive direction, and 75 percent of small businesses believe the new tax law will positively impact their businesses. Eighty-seven percent of small business owners believe the tax law will positively impact the economy at large.7

The Tax Foundation reported that Indiana collected the 17th most in corporate income tax per capita ($156 per capita) in fiscal year 2016.8 Neighboring states Michigan ($90 per capita, ranking 34th) and Kentucky ($137 per capita, ranking 21st) appear to be better positioned, while Illinois ($262 per capita, ranking sixth) is less business favorable. (Ohio collects corporate tax at the gross revenue level and was not included in the study.)

Overall, for 2019, Indiana ranks 10th most favorable in the country on the Tax Foundation’s State Business Tax Climate Index, which includes corporate tax rates, individual tax rates, sales taxes, property taxes and unemployment insurance taxes. In this more comprehensive and current measure of taxation, Indiana compares favorably to its neighboring states of Ohio, Michigan, Kentucky and Illinois.9

Thus, the tax changes look to benefit Indiana relative to many other states from a business perspective, as well as from an employee perspective. These elements could position Indiana in favorable light when Hoosier businesses seek to attract investments and intellectual capital from outside of the state.

To add to the relative tax law change benefits, Indiana also benefits from a comparatively strong position in terms of unfunded pension liabilities. First, the nation continues to age, and baby boomers continue to retire.10 Second, with federal corporate and personal income tax revenues scheduled to drop due to the Tax Cuts and Jobs Act of 2017, states are likely to feel pressure to cover certain services where federal funds are no longer available.11 Thus, pressure felt by states to fund ongoing pension obligations will increase as government cash sources are squeezed and services are cut. With respect to pension liabilities, Indiana ranks second in the U.S. (favorably) in that it has the second-least unfunded pension liabilities per capita in the country. As of 2017, Indiana was saddled with only $9,131 per capita—less than half of the U.S. average. Neighboring states of Ohio, Michigan, Kentucky and Illinois all had significantly more pension liabilities in their books (see Table 1).12

Table 1: Unfunded pension liabilities per capita for selected states

State rank State Amount
n/a U.S. average $18,422
1 Tennessee $7,601
2 Indiana $9,131
27 Michigan $16,935
38 Kentucky $25,100
47 Illinois $30,336
48 Ohio $30,538
50 Alaska $45,689

Source: “Unaccountable and Unaffordable 2017” from the American Legislative Exchange Council

In sum, the new tax laws appear to benefit Indiana relative to other states going forward, particularly in light of the national issue of an aging population and unfunded pension liabilities. Thus, tax favorability would tend to increase the probability of faster growth in Indiana state output, all else held constant.

Tariffs

Indiana’s economy is not immune to the international dialogue currently underway regarding tariffs.13 According to the U.S. Chamber of Commerce, $2.0 billion annually in Indiana exports have been targeted for retaliation by Canada, Mexico, the European Union and China, or 0.5 percent of the Hoosier economy. Table 2 presents the effects of tariffs on Indiana, neighboring states, reference states and the U.S. as a whole.

Table 2: Tariff economic impact on states

State Amount of tariff-affected exports GDP (000s)* Key products affected Percent of state economy
U.S. $122,225,326,246 $19,828,567,000  n/a 0.6%
Arizona  807,648,484 332,016,000 Retail surface-active soap, herbicides, insecticides 0.2%
California  14,732,397,509 2,827,104,000 Bread, cakes, seasonings, sauces, upholstered seats 0.5%
Illinois  6,656,479,561 843,509,000 Bread, cakes, herbicides, aluminum 0.8%
Indiana  1,951,848,338 368,005,000 Iron, steel, yachts, boats, canoes 0.5%
Iowa  1,414,915,340 193,756,000 Herbicides, iron, steel, aluminum 0.7%
Kentucky  2,268,410,836 208,202,000 Aluminum, greeting cards, steel 1.1%
Michigan 4,890,878,439 517,682,000 Iron, steel, herbicides 0.9%
Minnesota  2,150,580,823 356,761,000 Yachts, boats, canoes, bread, cakes, paper 0.6%
New York  4,336,882,177 1,578,081,000 Aluminum, iron, steel, bread, cakes 0.3%
Ohio  5,720,166,643 667,719,000 Soap, iron, washing machines 0.9%
Oregon  2,102,598,676 243,207,000 Plywood, aluminum alloy, iron, steel 0.9%
Texas  13,017,484,160 1,770,282,000 Iron, steel, sacks, plastic bags, refrigerator-freezers 0.7%

* Annualized first quarter 2018 output by state
Source: “Trade Works. Tariffs Don’t” from the U.S. Chamber of Commerce and the U.S. Bureau of Economic Analysis (GDP)

Thus, Indiana has been less affected by the threat of tariffs relative to neighboring states. It stands to lose less than the average state, as a percentage of GSP, if the tariffs (as currently proposed and understood) stick through the duration of 2019. In all, the Hoosier economy stands to lose 0.5 percent of GSP growth, due to tariffs in isolation.

Trade

On September 30, 2018, Canada’s prime minister agreed to join the United States-Mexico-Canada Agreement (USMCA), which replaces NAFTA as the tri-national North American trade agreement. If approved by the U.S. Congress (as well as Canadian and Mexican political entities) in 2019, the USMCA would take effect. USMCA would require 75 percent of automobiles and light trucks be made in North America in order to be duty free, which is up from NAFTA’s 62.5 percent requirement. USMCA also favors domestic steel production and use compared to NAFTA. USMCA favors workers making $16 per hour or more, which would benefit U.S. and Canadian labor more than under NAFTA.14

According to the U.S. Chamber of Commerce, Indiana businesses have $799 million in goods scheduled to export to Canada or Mexico that are anticipated to be affected by retaliatory tariffs, or 0.2 percent of annual output.

Trade with China was in a state of uncertainty at the time of this writing, with ongoing negotiations continuing. In total, Indiana businesses have $1.1 billion in goods scheduled to export to China, or 0.3 percent of annual output.15

Indiana businesses trade $75 million with the EU, or 0.02 percent of GSP.

Summary: At this time, considerable uncertainty exists whether and to what extent tariffs and trade negotiations will continue with partners that affect Indiana businesses. In our estimate, the probability for good outcomes are equal to those for poor outcomes. However, in the short run particularly, downside risk is dominant. Thus, the net effect of the current trade war is an expected net loss of 50 percent of the possible losses due to retaliatory tariffs—or (0.50 x 0.53 percent) = 0.27 percent of output.

Certainly, arguments exist for upside to the negotiations, as do arguments for timing of any marginal or indirect cash flows arising at future points from having done well in the negotiations. However, these are longer-term outcomes that likely will not materialize in 2019.

Update on opioid misuse in Indiana and its impact on economic growth

The opioid crisis continues to plague the U.S., and Indiana has been no exception. In a separate article series published earlier this year, it was revealed that opioid misuse damaged the Indiana economy in 2017 by $4.2 billion, unadjusted.16 This number included direct costs of $992 million, losses to GSP from labor market tightness of nearly $2.1 billion, and present value of future losses associated with prior deaths of $1.1 billion. For 2019, we considered these numbers, as well as inflation, changes in severity of the epidemic and improvements in societal maneuvers to better address the problem.

Baseline damages: For 2019 opioid-related damages, we exclude the factor comprising the present value of prior deaths, which accounts for accrued losses going forward, as those losses would be realized as negative cash flows over time, beyond 2019. Therefore, the baseline damages estimate for the year would be $3.06 billion without the future accruals.

Inflation and severity: Due to experience handling emergencies related to opioid overdoses, we assert that efficiency improvements countervail inflation. As far as severity of misuse rates among insured populations, significant numbers of Americans continue to use prescription opioids at the highest rates in the world, in spite of awareness of lethal risk.17, 18 It appears from preliminary reports from the Centers for Disease Control and Prevention that the opioid epidemic may have peaked in 2018 and may be leveling off nationwide. The newest data suggest (optimistically, perhaps) that the epidemic may be showing signs of stabilization, and while current levels of outcomes are far too costly, the severity appears to be stabilizing.19

Improvements in treatment and prevention: Indiana has done significant work on many fronts in driving conversations about solving the problem—reducing stigma, increasing awareness and new directions including reintroducing victims of the epidemic back into the labor force.20, 21, 22, 23

Indiana leaders understand victims of the opioid epidemic need purpose to find a way out of the broken circle of addiction, and Indiana employers need productive employees.24, 25

Summary: The estimated damages to Indiana’s economy for the ongoing opioid crisis in 2019 is $3.06 billion, or 0.8 percent of state output, approximately equal to intra-year damages experienced in 2017.

GDP growth and employment

The first quarter 2018 annualized nominal GDP of Indiana is about $368 billion, and growing, or about 1.9 percent of the U.S. economy.26 At the heart of our current economic opportunity set in Indiana lies nagging, ongoing labor market tightness, which now describes much of the entire country. Alongside a business-friendly environment—including strong corporate earnings and increased capital investments—Indiana appears to be suitably positioned to handle rising interest rates, ongoing trade negotiations, political turmoil, labor shortages and fierce competition from competing regions and states—at least through 2019. After 2019, however, from the vantage point of today, GSP growth trajectories may begin to slow if Hoosier policymakers and leaders continue on the same pathways.

2017 saw a continuation of deregulation early in the year and a tax code overhaul near the end of the year, setting the stage for business investments and additional jobs. In 2017, Indiana and the U.S. both achieved 2.1 percent growth. However, 2018 has been relatively strong in Indiana and the nation on the whole, with both regions expected to be stronger than in recent years. Economic strength is expected to continue into 2019, although at a slower pace as the year goes along.

Figure 1 shows the relationship between annual Indiana GSP growth and the U.S. yearly growth in GDP since 2008. We expect Indiana’s annual rate of real (i.e., inflation-adjusted) GSP growth in 2018 to finish at 2.7 percent and the forecast for 2019 is 3.2 percent.

Figure 1: Indiana gross state product and U.S. gross domestic product forecast

graph

Source: U.S. Bureau of Economic Analysis and the Indiana University Center for Econometric Model Research

While the news regarding GSP growth in Indiana sounds impressive thus far, there is another side to this coin. First, GDP gains in Indiana from fourth quarter 2017 through first quarter 2018 were measured at 1.3 percent, which ranks Indiana in the fourth quintile according to the U.S. Bureau of Economic Analysis. While reading too much into one solitary quarter of economic growth is not recommended, it is of interest to learn that all four neighboring states experienced higher growth in the first quarter of 2018 (see Figure 2).27

Figure 2: GDP growth by state, 2017 Q4 to 2018 Q1map

Source: U.S. Bureau of Economic Analysis

Indiana industries

Indiana’s private sector runs broadly on manufacturing (about 28 percent—17 percent durable and 11 percent nondurable), followed by financial services (about 15 percent), professional and business services (about 9 percent), and health care (about 8 percent), while the government sector also produces about 8 percent of output.28 Of note, Indiana continues to lead the country in manufacturing output as a percentage of total GSP, as it has for several years.

Two issues are positioned to dampen growth across America, and in Indiana as well: tariffs and opioid misuse. This forecast assumes tariffs will affect only manufactured goods produced in accord with the levels of impact by specific product, as reflected by the U.S. Chamber of Commerce (discussed previously). These costs in terms of output and jobs are stated in the manufacturing section below. Opioid misuse costs for 2019 were allocated and incorporated on a pro rata basis for all key industries discussed below.

Key industries

Manufacturing: Durable goods manufacturing is expected to grow by 6.6 percent in 2019, fueled by tax cuts and associated recent capital investments that promise to improve efficiency going forward, while adding 3,866 jobs—an increase of 1.0 percent. Output from production of nondurable goods is expected to grow by 2.5 percent in 2019, while losing 657 jobs—a contraction of 0.5 percent.29 If one-half of the possible retaliatory tariffs materialize over the coming year as currently proposed, it will cost durable manufacturing about $600 million in output, while nondurable goods producers would lose $370 million.

Financial services: Financial services in this article includes finance, insurance and real estate. Finance and insurance is expected to experience growth of 6.1 percent in 2019, while adding 1,186 jobs, an increase of 1.2 percent. Real estate output is expected to grow by 4.4 percent in 2019, while adding 607 jobs across the state, a growth of 1.7 percent.30

Professional and business services: Professional and business services output is expected to grow by approximately 4 percent, while adding 9,115 jobs, an increase of 2.7 percent.31

Health care: Health care is expected to grow by 2.8 percent in 2019, while adding 8,877 jobs, an increase of 2.2 percent.32

Government: Federal, state and local government is expected to contract by 0.6 percent, while adding 1,211 jobs in 2019, for an increase of 0.3 percent.33

Employment

Indiana is at full employment and expects to remain that way through the end of 2019. Indiana’s seasonally adjusted unemployment rate (U-3) measured as of September 2018 was 3.5 percent, compared to the U.S. rate of 3.7 percent.34 The unadjusted rate for America was 3.6 percent and for Indiana, 3.0 percent.35 The Indiana rate suggests more Hoosiers are currently employed versus at other times throughout the year. These figures (adjusted or not) are well below the gauge for full employment, which can be thought of as the lowest level of U-3 that does not cause inflation.36

In spite of the tight labor markets in Indiana, the results for 2018 are expected to support positive news for Indiana with respect to jobs—filled and created. However, moving into 2019, Indiana job growth is expected to lag behind the U.S. as a whole (see Figure 3), as the expansion seeks productivity gains through capital investments as labor shortages increase.

Figure 3: Employment growth forecast

graph

Source: U.S. Bureau of Labor Statistics and the Indiana University Center for Econometric Model Research

Labor force

In addition to its position as number one nationally in percentage of GSP earned via manufacturing, Indiana maintains the highest employment share in manufacturing in the U.S., coming in ahead of our peer states in the surrounding region, as well as North Carolina, Oregon, Iowa and Louisiana—all of which taken together round out the top 10 in manufacturing volume across the country. To assess how Indiana compares to these states, we can look at comparative unemployment rates over the prior five years (see Table 3).

Table 3: September unemployment rates for Indiana and manufacturing-heavy peer states

2014 2015 2016 2017 2018
U.S. 5.7 4.9 4.8 4.1 3.6
Indiana 5.4 4.2 4.1 3.3 3.0
Illinois 6.2 5.4 5.5 4.6 3.8
Iowa 3.9 3.4 3.3 2.8 2.1
Kentucky 5.5 4.8 4.8 4.3 4.3
Louisiana 7.0 6.2 6.4 5.0 5.0
Michigan 6.5 4.6 4.9 4.5 3.5
North Carolina 5.9 5.4 5.0 4.2 3.1
Ohio 5.2 4.3 5.0 4.7 4.1
Oregon 6.2 5.1 4.5 4.0 3.6
Wisconsin 4.6 3.9 3.6 2.9 2.6

Note: Data are not seasonally adjusted.
Source: STATS Indiana, using U.S. Bureau of Labor Statistics data

As of September 2018, Indiana had a lower (non-seasonally adjusted) unemployment rate (3.0 percent) than the nation (3.6 percent), and Indiana’s unemployment rate stood lower than its peer states, except Wisconsin (2.6 percent) and Iowa (2.1 percent). However, unemployment rates only tell part of the employment story in a given region. Other parts of the story include the age of the population, the educational attainment level of the residents and the percentage of the population who participate in the labor force.

In last year’s state forecast, evidence was presented that while America is aging on the whole, Indiana’s population is relatively young compared to peer states. However, evidence was also presented that Indiana lags in higher educational attainment, ahead of only Kentucky and Louisiana among the 10 peer states across the country who have considerable manufacturing enterprises and output.37 Because Indiana lags in educational attainment, vast numbers of jobs are subject to recessionary contractions, wages are inherently lower and the overall architecture of the economy is less productive. Thus, in future periods, particularly periods of economic contraction, Hoosiers stand cyclically vulnerable compared to other states.

Similar to our lack in higher educational attainment, Indiana also lags behind peer states in business investment, measured by venture capital investment. Both characteristics—higher educational attainment and venture capital investment—illustrate opportunities for Hoosier leaders. Given acuity of focus, Indiana could drive its labor force in a direction better suited to acclimate to the inevitability of dynamic changes coming in our future. Artificial intelligence, robotics, climate patterns and a host of other important areas will increasingly challenge our current labor force to adapt—to become better educated and to boldly pursue new ventures previously considered too risky or progressive. Such a shift in attitude by leaders throughout the state will best position Indiana to grow in new ways that might yield further dividends in future years. But first, the labor force participation rate (LFPR) is discussed.

The LFPR is now higher in Indiana than in neighboring states, at 65.1 percent (see Figure 4). When considering a falling unemployment rate and an expanding labor force, the labor market is stretched to a level of tightness not seen in neighboring states. Presumably, labor from neighboring states will be drawn into Indiana for work, as Indiana wages move higher relative to other states given the labor supply shortage.

Figure 4: Labor force participation rates among neighboring states

graph

Note: The LFPRs are for September of each year (seasonally adjusted) and calculated for the population ages 16 and older.
Source: U.S. Bureau of Labor Statistics

Figure 5 shows that room still exists in Indiana to attract Hoosiers back to work. While Indiana’s labor markets are tighter than Illinois, Michigan, Ohio and Kentucky, we can see examples of other states with similar profiles (Iowa and Wisconsin) where U-3 rates are lower and the LFPR is higher. This is good news for additional GSP and jobs growth on our immediate horizon.

Figure 5: Labor force participation rates among heavy-manufacturing peer states

graph

Note: The LFPRs are for September of each year (seasonally adjusted) and calculated for the population ages 16 and older.
Source: U.S. Bureau of Labor Statistics

Business investments: Venture capital

Earnings increases increase output. Also, the missing link in our expansion—capital investment—increases output though efficiency gains. In this article, a relative comparison of capital investment in Indiana was made to neighboring states to see how we stack up. Results are shown in Figure 6 and Figure 7.

Figure 6: Number of venture capital deals each year among neighboring states

graph

Source: StatsAmerica

Clearly, Illinois drives the bus when it comes to VC deals in the Midwest. While this is altogether not terribly surprising, since Illinois is home to Chicago, one the world’s finest cities, it also raises the question: How can Indiana attract more capital investment via more venture capital?

Figure 7: Amount of venture capital per capita among neighboring states

graph

Note: Data are in 2017 dollars.
Source: StatsAmerica

Other concerns and issues

Risks: Beyond the tight labor market where growth can be difficult when workers are hard to find, risks to growth in Indiana might include the following:

  • Interest rates rising too quickly, further dampening growth rates in sales of new automobiles and light trucks.
  • Not winning our share of venture capital and business investments relative to what is happening in peer states (particularly, investments that go beyond manufacturing investments).
  • Various political or policy issues harmful to growth in Indiana.

Upside: 2019 should be another year of strong growth in Indiana, with expected output to rise by 3.2 percent, while growth is expected to slow as we progress through the year. Wages are rising, which can lift some Hoosiers into better financial positions and enhance consumer spending. Also, city centers throughout the state are beginning to plan for partnerships and collaborations, rather than view one another as strictly competitors. This can enhance opportunity for communities to attract new businesses with increased portfolios of amenities in the offering.

Notes

  1. U.S. business cycle expansions and contractions. The National Bureau of Economic Research. Retrieved from www.nber.org/cycles.html
  2. Chandra, S., & Golle, V. (2018, May 1). The U.S economy has hit a milestone. Bloomberg. Retrieved from www.bloomberg.com/news/articles/2018-05-01/as-u-s-expansion-hits-endurance-milestone-here-s-what-s-next
  3. The 2.2 percent annualized real GDP measure for the current expansion was as of May 1, 2018, through the 108th month of the expansion. For the five months since, GDP expansion has increased to around 3.5 percent; thus, the current number for average annualized GDP growth might have increased a bit: [(2.2% x 108) + (3.5% x 5)]/113 = 2.26%.
  4. Witte, W. (2018, October 31). United States baseline econometric model. Indiana University Center for Econometric Model Research. Modeling is as of October 31, 2018, made available through various authoritative economic sources. The time-series model includes 53 exogenous (right-hand side) variables and forecasts out through the fourth quarter of 2021.
  5. Witte, W. (2018, October 31). Indiana state baseline econometric model. Indiana University Center for Econometric Model Research. Modeling is as of October 31, 2018, made available through various authoritative economic sources. The time-series model includes 40 exogenous (right-hand side) variables and forecasts out through the fourth quarter of 2021.
  6. Author’s calculations.
  7. National Federation of Independent Business. (2018, May). NFIB study: Small business introduction to the Tax Cuts and Jobs Act. Retrieved from www.nfib.com/surveys/tax-survey/
  8. Loughead, K. (2018, September 5). How much does your state collect in corporate income taxes per capita? Tax Foundation. Retrieved from https://taxfoundation.org/state-corporate-income-tax-collections-per-capita-2018/
  9. 2019 state business tax climate index. Tax Foundation. Retrieved from https://statetaxindex.org/state/indiana/
  10. Brewer, R. M. (2017, Winter). Indiana’s outlook for 2018. Indiana Business Review. Retrieved from www.ibrc.indiana.edu/ibr/2017/outlook/indiana.html
  11. Korzenick, J., & Podsiadly, N. (2018, July 23). 2018 economic outlook presented by Fifth Third Bank. Cincinnati Business Courier. Retrieved from www.bizjournals.com/cincinnati/news/partners/2018-economic-outlook/2018/2018-economic-outlook-presented-by-fifth-third.html
  12. Powers, T., York, E., Young, E., & Williams, B. (2017, December 13). Unaccountable and unaffordable: Unfunded public pension liabilities exceed $6 trillion. American Legislative Exchange Council. Retrieved from www.alec.org/publication/unaccountable-unaffordable-2017/
  13. U.S. Chamber of Commerce. (2018). “Trade works. Tariffs don’t. Tariffs threaten to derail our nation’s recent economic resurgence.” Retrieved from www.uschamber.com/tariffs. State-by-state and product tariff information taken from this source and used to analyze the impact on our forecast.
  14. Lynch, D. J. (2018, October 1). Canada agrees to join trade accord with U.S. and Mexico, sending new NAFTA deal to Congress. The Washington Post. Retrieved from www.washingtonpost.com/business/economy/us-and-canada-closing-in-on-a-new-nafta-deal-as-deadline-looms/2018/09/30/2ef72018-c50b-11e8-b1ed-1d2d65b86d0c_story.html
  15. U.S. Chamber of Commerce. (2018). “Trade works. Tariffs don’t. Tariffs threaten to derail our nation’s recent economic resurgence.” Retrieved from www.uschamber.com/tariffs. Of the $799 million targeted in North America, $648 million of exports are targeted by Canada and $151 million of exports are targeted by Mexico.
  16. Brewer, R. M., & Freeman, K. M. (2018, Spring). Cumulative economic damages from 15 years of opioid misuse throughout Indiana. Indiana Business Review. Retrieved from www.ibrc.indiana.edu/ibr/2018/spring/article1.html
  17. Craven, J. (2018, August 1). Opioid use has not declined meaningfully. Internal Medicine News. Retrieved from www.mdedge.com/internalmedicinenews/article/171660/addiction-medicine/opioid-use-has-not-declined-meaningfully
  18. British Medical Journal (2018, August 1). U.S. opioid use not declined, despite focus on abuse and awareness of risk. Medical Press. Retrieved from https://medicalxpress.com/news/2018-08-opioid-declined-focus-abuse-awareness.html
  19. Lopez, G. (2018, October 24). Trump’s health secretary says the opioid epidemic may be turning around. Not so fast. Vox. Retrieved from www.vox.com/science-and-health/2018/10/24/18015532/opioid-epidemic-overdose-deaths-2018-alex-azar-trump
  20. O’Brien, M., & Newhouse, R. (2018, August 12). Op-ed: IU joins fight against opioid addiction in Indiana. Indianapolis Star. Retrieved from www.indystar.com/story/opinion/2018/08/12/op-ed-iu-joins-fight-against-opioid-addiction-indiana/950874002/
  21. Information for Indiana physicians from the Indiana chapter of the American Medical Association can be seen at www.end-opioid-epidemic.org/indiana/.
  22. Resources from the Alliance for Substance Abuse Progress in Bartholomew County can be seen at www.asapbc.org/.
  23. Grand challenges: About responding to the addictions crisis. Indiana University. Retrieved from https://grandchallenges.iu.edu/addiction/index.html
  24. Noguchi, Y. (2018, July 27). Now hiring: A company offers drug treatment and a job to addicted applicants. NPR. Retrieved from www.npr.org/2018/07/27/631557443/now-hiring-a-company-offers-drug-treatment-and-a-job-to-addicted-applicants
  25. Employment after addiction treatment. (2018, September 4). Addiction Center. Retrieved from www.addictioncenter.com/rehab-questions/can-i-get-my-job-back/
  26. Siebeneck, T., & Wang, C. (2018, July 24). Gross domestic product by state: First quarter 2018. U.S. Bureau of Economic Analysis. Retrieved from www.bea.gov/system/files/2018-08/qgdpstate0718_2.pdf
  27. See note 26.
  28. These data come from the Indiana University Center for Econometric Model Research’s Indiana state forecast model.
  29. Opioid losses in manufacturing are expected to total $559 million among durable goods manufacturers in Indiana in 2019, while nondurable goods manufacturers will expect to lose $342 million.
  30. Opioid losses in 2019 amount to $171 million in finance and insurance businesses and $304 million in real estate.
  31. Opioid losses in professional and business services are expected to total $267 million in 2019.
  32. Opioid losses in health care are expected to total $252 million in 2019.
  33. Opioid losses in productivity among government agencies in Indiana are expected to total $241 million in 2019.
  34. U.S. Bureau of Labor Statistics September data were retrieved from www.bls.gov/web/laus/laumstrk.htm.
  35. Unemployment data were retrieved via STATS Indiana at www.stats.indiana.edu/laus/laus_view3.html.
  36. Crook, C. (2018, July 6). Full employment. Bloomberg. Retrieved from www.bloomberg.com/quicktake/full-employment
  37. Brewer, R. M. (2017, Winter). Indiana’s outlook for 2018. Indiana Business Review. Retrieved from www.ibrc.indiana.edu/ibr/2017/outlook/indiana.html