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As the clock turned to 2019, a fair amount of nervous anticipation exists within the business community about what the New Year will hold. Many consecutive years of economic growth have leaders worried a slowdown might be imminent.
Historically, in the U.S., no economic expansion has lasted longer than a decade (March 1991-March 2001). The current expansion has now lasted more than nine years, leading to those concerns about what 2019 and beyond might hold for the economy.
The prognosticators have been busy looking into their "crystal balls" to offer insight on what the future might hold. Unfortunately, mine is no clearer than theirs, but we thought we'd weigh in as well as share some of that insight from others in this issue of my blog.
Nationally, experts predict that the economy should grow about 2.5%. Those same experts predict the Indiana economy should outpace the national economy, growing at 3.2%. Most growth is predicated early in the year, slowing as the year progresses.
The diversity of our economy in South Bend-Mishawaka-St. Joseph County area is a real plus and means we don't see as wide of swings as other areas might see when the economy surges or slows. We anticipate that this will mean slow and steady growth continuing in our area in 2019. We've been growing slower than the rest of Indiana, however, we'd like to see our area growth keep pace with that of the state prediction.
The fastest-growing sectors in terms of job growth included leisure and hospitality, and goverment, which includes school and hospitals. The biggest decline in employment was in private educational and health services. Indications are the recent growth in sectors like health care, the service industry, and warehousing and logistics should continue.
The last few years have seen more capital invested in and around the local communities than at any time in recent memory. We saw tax cuts, as well as many key public-private partnerships drive new investment, especially in our "city" centers. Many of those projects will near completion in 2019. Others announced recently will break ground in early 2019.
Moderate growth among several other key indicators like median income, population and gross domestic product have investors and our communities optimistic. At the same time, international trade uncertainty, rising interest rates and the availability of workforce allow some pessimism to creep in.
Many cite concerns about the challenges with finding workers needed to fill open spots. We don't anticipate that changing much in 2019. Unemployment should stay about the same, and as a result, the tight labor market will continue to drive hourly wages up. We see two potential fixes to the workforce shortage: increase our labor force participation rate (62.5% of all eligible workers do so) and grow our population. Efforts are underway to advance both of these fixes.
We anticipate the demand for housing will remain strong in the New Year. The experts say it's a sellers' market, with a lack of inventory driving some prices up. The number of new homes built rose again in 2018, and a significant amount of high-density residential projects were started, completed or announced. What happens with interest rates in 2019 could have a major influence on the housing market in the New Year.
Our recent successes with growth and development should be celebrated. These successes have also attributed
to a shift in attitude in the region.
This is huge. We must continue to strive to keep pace with the state and national economies. Otherwise, we'll fall behind.
Population growth and income growth should be our top priorities. A great roadmap has been laid out by our partner, South Bend–Elkhart Regional Partnership, to help guide growth in the coming years. We need to commit to seeing the plan through and working closely with our regional partners on enhancing growth opportunities. Here at the Chamber, we're all about seeing you and your business succeed. Onward in 2019, and we look forward to working with you as we seek to catalyze that growth.