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Economist: 2015 won’t match strong 2014

Economist: 2015 won’t match strong 2014
Economist: 2015 won’t match strong 2014
William H. Harrod, president and CEO of First Harrison Bank, asks a question about the unemployment rate vs. the under-employment rate. Photo by Ross Schulz

After a strong 2014, which saw many local economic figures jump back up to near pre-recession levels, Dr. Uric Dufrene, Indiana University Southeast Sanders Chair in Business, said to expect slower growth in 2015.
Dufrene was the featured speaker at the Mid-Year Economic Update in the Hoosier Room at IUS on May 19.
‘It doesn’t mean we’ll have negative job gains, just de-acceleration,’ he said.
It marked the sixth year the IUS School of Business hosted an economic update event, all featuring Dufrene, who is also the executive vice chancellor for Academic Affairs.
In most updates, Dufrene includes a theme phrase that sums up the economic outlook and last Tuesday it was ‘caution light’ or ‘partly cloudy.’
Job gains for the Louisville metro area, which includes Harrison, Floyd, Clark and Washington counties in Southern Indiana, will not exceed 2014, according to Dufrene’s projections.
Last year was a very favorable one for the Louisville metro economy.
Dufrene expects between 10,000 and 15,000 added jobs this year, when 2014 produced 24,000.
‘I can confidently say job growth will not exceed 24,000 in 2015,’ he said. ‘The signs are pointing to slower growth, and we’re beginning to see that.’
While that may not seem like positive news, growth in many areas of the economy has been steady the past few years.
The United States’ payroll has been positive and job growth nationally has been relatively strong, he said, and the market is at an all-time high and the unemployment rate has steadily declined.
Locally, the Louisville metro unemployment rate is lower than Indiana’s, Kentucky’s and the country’s.
‘That’s quite significant if you think about it,’ Dufrene said.
Job figures in the metro area are only about 500 shy of pre-recession levels in December 2007. The largest growth has been in the health care and social services sectors.
Economists are watching the country’s Gross Domestic Product closely, after negative growth in the first quarter of this year.
Dufrene said there may even be talk of a recession, but he doesn’t think the area will get close to that.
He also noted that the employment to population ratio is still not very positive and the under-employment rate is still up in double digits.
A representative with Schuler-Bauer, during the question-and-answer session, said they have about three months of inventory, meaning if each house they had on the market sold, it would take approximately three months to do so. In the peak of the recession, the real estate company’s inventory hit nine months.
Chancellor Ray Wallace also praised the growth of IUS before Dufrene’s update.
‘The university is growing by leaps and bounds,’ he said, adding that more than 1,100 graduates went through commencement this spring.
Wallace said the university is growing regionally, with 35 percent of this year’s graduates coming across the Ohio River in Kentucky.
‘Eighty-five percent of graduates stay in this area and become a part of a bigger and bigger tax base,’ he said.