The economic forecast for next year is similar to last year’s prediction, but with one caveat.

“A year ago we forecast that the economy would grow and improve in 2019, relative to 2018,” said Kyle Anderson, assistant professor of business economics at Indiana University. “Unfortunately, we turned out to be too optimistic in that forecast.”

Anderson was one of three panelists who spoke Tuesday at the Indiana Memorial Union during a business outlook luncheon. The Bloomington Rotary Club and the Greater Bloomington Chamber of Commerce helped organize the local event. IU Kelley School of Business faculty will present the 2020 economic forecast at similar events that will take place in other cities across Indiana this month.

Right now, the national economy is poised to grow about 2% in 2020. Anderson characterized that as “OK.”

“But it’s not great and it’s certainly not as good as it was a year ago,” he said.

Last year, economic forecasters had concerns about international trade friction and a slowing global economy. Now, it’s clear those concerns were warranted.

Manufacturing, in particular, seems to have taken a hit. That sector has been down over the past 12 months and Anderson expects that to continue. Part of the decline is due to lack of trade.

This contraction is important at the state level because Indiana is heavily dependent on manufacturing, said Jill Long Thompson, professor of ethics at Kelley and the IU O’Neill School of Public and Environmental Affairs.

More than a quarter of Indiana’s gross state product comes from manufacturing, but car and light truck sales are expected to drop by about 2% in 2020.

“As you know, manufacturing is very impacted by trade disagreements and uncertainties,” Thompson said.
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