NWI economy looking positive for ’22

Experts take favorable view: ‘Much of today’s inflation is self-inflicted’

Industry leaders painted a positive, but less robust, picture of the Region economy in 2022, pointing to the start of construction on two South Shore Railroad projects, a projected 4.5% real GDP growth rate, 4.2% unemployment and continued growth in the real estate market.

“More people will get hired. We’ll see a continued downward trend in unemployment,” predicted Anthony Sindone, economics professor at Purdue University Northwest of the Region’s business landscape.

However, he added, the jobs we’ll see aren’t necessarily the same jobs we see today. He said some job seekers will need to learn new skills.

He also pointed out that people are leaving the labor force at a high rate, especially in the leisure and hospitality field, with labor participation rates down to just over 58%.

Sindone was one of seven speakers at the Business and Economic Outlook event held at Ivy Tech’s Valparaiso campus. Nearly 325 individuals registered to attend the event.

Steve Skalka, senior vice president and trust investment manager with Horizon Bank, said there was a big increase in economic growth this year, largely due to the federal government’s economic stimulus packages.

He expects 2022 is still expected to be strong. “After that, we’ll probably be back to 2% growth rate,” Skalka said.

He said shortages have been a drag on growth, but U.S. equities have been surprisingly resilient, largely because there’s no alternative.

Another problem has been inflation, which Skalka said has been above 5% for four consecutive months. He noted the price of gasoline has increased 73%, coffee 62% and used cars by 25%.

“Much of today’s inflation is self-inflicted. It can be pulled back, though,” Skalka said.

He expects it to be about 3%. Peter Novak Jr., CEO of Greater Northwest Indiana Association of Realtors, said the real estate market has been on a good run since after the Great Recession of 2008-’09. He projected the number of closed sales of existing homes would hit 12,244 this year, compared to less than 7,000 in 2009.

Prices have surged, as well, going from an average of $130,000 in 2007 to$210,000.

“We’re selling more homes than ever with no inventory. It’s pretty amazing,” Novak said.

He said he expects some prices to continue to climb, but not by as much. He said supply and demand will continue to be out of balance. He also expects interest rates to rise.

Mike Noland, president and general manager with the Northern Indiana Commuter Transportation District, said the main construction contract for the Double Track project, a 26-mile stretch of track between Gary and Michigan City, is expected to be awarded in 2022. This project is expected to cut the ride time between the two cities in half.

Construction on the West Lake Corridor from Hammond to Dyer is expected to begin in the spring. This could provide a 45-minute ride from Dyer to Chicago.

Noland said the projects are projected to create 7,000 new jobs and increased ridership is expected to bring new wealth to Northwest Indiana.

William Sheldrake, president of Poly Analytics, said over 20 years the projects are expected to generate a $310 million state sales tax increase and a state income tax hike of $192 million.

Ty Warner, executive director of the Northwestern

Indiana Regional Planning Commission, said the Region has been working to develop its assets and make it a more desirable place to live and work.

“It doesn’t matter how many ways you have to get there if you have no place anyone wants to go. Our goal is to make the Region a place people want to locate to,” he said.