Indiana University economists say they expect continued slow economic growth next year, but caution Hoosiers about looming fiscal storm clouds.
Each of the members of IU’s Business Outlook Panel say the next year will look a lot like the last two with the country slowly recovering from the recession. But IU economist Bill Witte says two sectors, the housing and energy markets, create a little more optimism than in recent years.
“Housing and energy provide a base under the economy that I think makes a renewed recession relatively unlikely.”
Witte does caution that instability in Europe, slowed growth in China and the impending U.S. fiscal cliff – a combination of higher taxes and government spending cuts – pose significant threats to his predictions.
Indiana Business Research Center director Jerry Conover says Indiana has recovered better than many states, with job growth in recent months at its highest level since the late 1990s. And he says strong job growth should continue.
“We’re predicting somewhere upwards of 50,000 more jobs to be added in the year ahead. At this rate, though, it’s still going to be a couple more years before we finally get back to pre-recession levels of jobs in our state.”
Conover says the state’s current unemployment rate of 8.2% should come down to about 7% by the end of 2013.