GOSHEN — The local economy, continually buoyed by the manufacturing recovery, will enjoy stronger production and personal income growth than the rest of Indiana and the nation next year, according to a forecast by Ball State University economists.
Gross domestic product, meaning the value of all goods and services produced, in North Central Indiana will grow 4.6 percent in 2014 over this year, more than double the 2.2 percent rate projected for Indiana and 2.1 percent nationally, Michael Hicks, director of Ball State's Center for Business and Economic Research, said Monday, Dec. 16. He delivered the forecast to area business and government leaders gathered at Ivy Tech Community College Goshen, as part of the center's Indiana Economic Outlook 2014 tour of the state.
Personal income in the region, defined as St. Joseph, Elkhart, LaGrange, Noble, Kosciusko and Marshall counties, will increase 4.9 percent, compared to 2.5 percent statewide.
“This is a very good forecast for a region that was really clobbered during the recession,” Hicks said.
Indiana's 2.2-percent GDP growth, while much slower than that of the six-county region, is expected to lead the Midwest, followed by Wisconsin at 1.6 percent, Michigan and Illinois at 1.5 percent and Ohio at 1.3 percent. Indiana's 2.5 percent personal income growth also is forecast to lead the region, followed by Illinois and Wisconsin at 2.2 percent, and Michigan and Ohio at 1.7 percent.
Hicks pointed to a handful of developments over the past year as examples of continued growth in the North Central Indiana region over the next year, including Drew Industries Inc.'s announcement in April that it would relocate to Elkhart County from New York and add 800 jobs by 2017. Drew Industries is the parent company of Elkhart-based Lippert Components.
Also, Zeeland Lumber Operations LLC is opening a new facility in Elkhart to expand distribution and sales services in southern Michigan and northern Indiana. The company will invest $1.56 million to buy and equip the facility, which will create up to 72 jobs by 2016.
The forecast calls for the six counties to add more than 2,204 jobs by the end of the year.
“The manufacturing recovery, which has been so obvious in the region, will extend to other sectors, and this region will see broad growth across all sectors in 2014,” the center's report predicts.
Hicks noted that while the area's immediate prospects are good, steady population growth will be key for long term economic viability. This region, like the rest of the state, is seeing an increase in the share of income linked to non-exportable production, or things that are consumed locally.
“The people dimension is increasingly critical,” Hicks said. “Even as strong as manufacturing is ... the future of this region has to depend more heavily on providing that non-exportable production. To grow that, you have to grow population, and you have to grow businesses that are going to support that population.”
Dorinda Heiden-Guss, president and CEO of the Economic Development Corporation of Elkhart County, said she was “elated” to hear the good news about the area's manufacturing and agriculture industries. But she said Hicks' observation about the need to attract more population to the area bolsters her group's new initiative to diversify the economy so that it is not so badly damaged the next time demand for manufacturing slows down.
“To his point, this is a fabulous opportunity for us in economic development to start repositioning ourselves, to broaden our reach and to be more attractive to folks from outside our area, to attract them here,” she said. “If we're going to do business attraction, this is a perfect time to do our paradigm shift.”