Kelley School experts optimistic about economy

IU economists are being “cautiously optimistic” in their forecast for the national, state and local economy in 2008. The 2008 Business Outlook Panel forecast was released by faculty members from the Kelley School of Business on Friday.\nJerry Conover, director of the Indiana Business Research Center at the Kelley School, said economic indicators are generally staying the same. For example, he said Indiana’s total income level is rising, but on a national standard Indiana is losing ground.\n“Indiana’s personal income level is at about 88 percent of the national average; the lowest it has ever been,” Conover said. “We are growing, but the rest of the country is growing faster.”\nConover said Indiana’s gross domestic product is the 16th highest in the nation; two years ago it was 15th. \nHe added that for the past six months, employment has been rising. There are 18,000 more jobs available in Indiana than there were a year ago. The forecast predicts that in the coming year employment will continue to increase.\nJohn Boquist, the Edward E. Edwards professor of finance, said the panel has forecasted modest changes for the upcoming year. \nConover said rising gas prices have to do with a lot of factors, such as investors turning prices and a lack of oil refineries.\n“We have enough oil, but we do not have the refineries to turn it into gas,” Conover said. \nBoquist said there will be plenty of gas to go around; it may cost a little bit more, but not by a huge amount.\nThis will affect students driving long distances to get home for the holidays, depending on how far they have to travel. Cost for gas may increase by about an extra $10 or $15 every time a gas tank fills up, Conover said.\nAirline prices will also be increasing, as the cost of oil rises. \nStudent loan interest rates are not going to climb substantially in the coming year, according to the report. The interest rates are likely to level off over the next year unless something unexpected happens, Conover said.\nConover advises residents to be careful and smart about their heat this winter. Coal and oil prices have risen, and the increase in fuel costs directly impacts propane and electricity prices. The panel predicted that Northern Indiana natural gas prices will increase, but Southern Indiana should not expect prices to increase much. \nTo combat rising electricity costs, Conover suggests keeping thermostats set at a reasonable level such as between 65 and 68 degrees depending on comfort level. Residents and students can also put weather stripping on their doors to keep heat in. \n“Keeping your heat on a relatively lower temperature can save a lot of money,” Conover said.