KOKOMO, Ind. — The revitalization of downtowns across north central Indiana will continue the growth trend in the construction industry in 2018.
However, the opioid crisis will create difficulties in attracting jobs statewide, because it exacerbates problems finding qualified employees.
“Overall, I’m optimistic,” said Alan Krabbenhoft, dean of the IU Kokomo School of Business. “There are a lot of great things happening in downtown metropolitan areas, not just in Kokomo. There are a lot of wonderful opportunities for growth throughout the region.”
These were just a few of the issues discussed at the annual Indiana University Kelley School of Business annual Economic Outlook Panel Wednesday (November 15).
Krabbenhoft was joined by Kelley School of Business faculty Kyle Anderson, clinical assistant professor of business economics; Ryan Brewer, associate professor of finance; and Robert Neal, associate professor of finance, speaking to an audience of about 100 government officials, business professionals, and students from the Kokomo CEO program.
Statewide, Indiana is expected to outpace the country in growth, at about 2.8 percent, and unemployment at 3.8 percent, below the national 4 percent, according to Neal.
However, that brings challenges with the state’s aging labor market, lower ranking in educational attainment, and the national drug abuse crisis, Brewer said, noting that more people died in the U.S. from opioid misuse in 2016 than all the Americans who died in the Vietnam War.
Indiana has approximately 66,000 to 75,000 opioid misusers, he said, reducing the available workforce.
“Clearly in a tight labor market, the opioid epidemic has reared its ugly head,” he said. “It’s already hard to find qualified people. If you take several of them out of the labor market, it’s going to get harder and harder.
He added that Indiana ranks between 42nd and 44th of the 50 states in educational attainment, which leaves residents vulnerable in an economic downturn. Jobs that don’t require a baccalaureate degree tend to be the first impacted during a recession.
The construction industry continues to grow in IU Kokomo’s region, Krabbenhoft said, with the majority being housing projects ranging from upscale townhomes to assisted living centers.
“These will provide not only housing, but also jobs,” he said. “The area around downtown Kokomo and near the municipal stadium is quickly changing. Plans for a new hotel, restaurant, and bar near the riverfront are also in the works, which will bring both temporary construction jobs and longer-term hospitality and tourism positions.”
Other forecast highlights included:
- The overall economy will continue to grow at or a little above 2.5 percent in 2018, at least partly due to a post-hurricane boost in the early part of the year.
- Employment will continue to expand, with job creation averaging more than 180,000 per month. Gains will be boosted in 2018 by hurricane recovery efforts, and will decelerate later in the year.
- Energy prices will remain low, with average prices similar to 2017.
- In terms of gross domestic product, econometric forecasting indicates Indiana will have 2.8 percent growth in 2018.
- Strong employment growth has fueled the dropping unemployment rate. Indiana’s employment growth has outpaced the nation in what is expected to be five of the last seven years, resulting in 386,000 more Hoosiers employed since emerging from the Great Recession in 2010.
- Indiana’s housing market will continue to expand, with single-family housing expected to increase about 10.3 percent in 2018.
Indiana University Kokomo serves north central Indiana.