ANDERSON - Although the annual business outlook for Indiana and Madison County is expected to see continued economic growth, a problem looming on the horizon is a lack of eligible workers.
The outlook by the IU Kelley School of Business and Anderson University Falls School of Business took place Tuesday at the Anderson Rotary Club.
Terry Truitt, dean of AU Falls School of Business, said Anderson and Madison County have been dealing over the past three decades with the loss of presence of General Motors.
“We kept waiting to turn the corner,” he said. “There was an uptick in 2000, but that got knocked back by the recession. Right now, the local economy is rebounding well.”
Truitt said the unemployment rate has dropped from 12.1 percent in 2010 to 3.9 percent in September.
“There has been a healthy increase in the number of people working since 2013,” he said. “For the year to date, there were 1,200 jobs created in the past year.
“Employers are finding it more difficult to find employees,” Truitt continued. “One-third of the applicants can’t pass a drug test and another third don’t continue to come to work. The turnover rate of employees is a challenge.”
Another problem for Madison County is the lack of people with a high educational attainment, according to Truitt.
He said in 1990, there were 26 percent of county residents who didn’t have a high school diploma and for 2015, the number of people without a diploma was 13 percent.
“There is lots of room for improvement, but we’re making progress,” Truitt said. “There have been improvements in the educational system where students are being taught more of the needed job skills.”
The Madison County economy is expected to grow in 2018 but at a slower pace. Truitt said more people are returning to the work force but the declining population is a factor to fill the number of new jobs.
He said the population growth along Interstate 69 will eventually impact southern Madison County. Truitt noted there is a 30-percent increase in the price of homes being sold in the county.
“We will continue to see a population decline for the next year, but there should be growth in the next five to 10 years,” he said.
Ryan Brewer with the Kelley School of Business said Indiana’s economic growth is projected at 2.8 percent in 2018.
“We’re coming off a strong year,” he said. “The automotive industry has been strong as a result of Hurricane Harvey.
“The auto industry saw banner years in 2016 and 2017 and there was expected to be a downturn,” Brewer said. “But 500,000 cars and trucks were destroyed in Texas.”
The theme for the Indiana economy is “Groundhog Day,” he said.
“The last seven years, the recovery produced less than impressive results,” Brewer said. “It was slower than past recoveries.”
Brewer said because of the state’s reliance on manufacturing, the recessions have a greater impact, but the recovery is normally faster than the national average.
“Right now, we’re in a tight labor market,” he cautioned. “The pool of workers in the state has dropped by 14 percent over the past four years.”
With an unemployment rate of 3.8 percent in September, Brewer said Indiana is nearing full employment.
“The tight labor market is costing Indiana in terms of employment and new investment,” he said.
Brewer agreed with Truitt that a concern is the educational attainment levels among Indiana workers, noting the state ranked 42nd in the nation with people having post-secondary education.
“As a result, our wages lag behind the national average,” Brewer said. “Indiana is attracting the lower-wage jobs, which are more vulnerable to recession.”
A one-percent increase in the education attainment level will translate into a two-percent bump in wages, he said.