Panel forecasts poor economy in 2009

Bloomington residents chewed on the economy over lunch Thursday.

The lunch was part of the IU Kelley School of Business’ “Business Outlook Panel” at 11:30 a.m. inside Alumni Hall in the Indiana Memorial Union. The lunch provided Bloomington residents and local businesses insight into how 2009’s economy will look as predicted by four Kelley School of Business faculty members.

The four panelists spoke about how the economy would look for different regions. Overall, panelists said the economy would still look bad all year, but will begin to look better during the second half of 2009.

Jerry Conover, the director of the Indiana Business Research Center, said these are “tough times all around” for Bloomington’s economy.

Conover said Bloomington’s population increase will continue to grow in 2009. He said an increase in the population will encourage growth in the city and county. New residents will also become new consumers who will help the local economy.

Bloomington lost 49 establishments over the last year but is projected to gain about 500 jobs next year, Conover said.

Industries that are growing in Bloomington include restaurants, taverns and the medical field, Conover said. Retail, construction and housing industries are losing business.

Conover said residents should remain optimistic about next year’s economy.
“The outlook is partly cloudy next year,” Conover said. “We’ll do reasonably well (and) might as well enjoy what we got.”

The other panelists focused on the state and national economy.

Willard Witte, an associate professor emeritus of economics, said things will look grim for a while nationally.

“This is going to be a long period of contraction,” Witte said. “There is a lot of risk and uncertainty.”

Witte said a loss of 2 million jobs is projected for next year. Witte also said exports are one of the strongest parts of the U.S. economy. He said it would be interesting to see how the world will react to the reduction in our productivity.

Witte said a second stimulus package will be sent out sometime in early 2009.
John Boquist, the Edward E. Edwards professor of finance, called the current economic crisis “the perfect storm.”

Boquist said people can expect a bad economy for a long time. He also said the government throwing money at the problem is not resolving anything.

Boquist commented on other problems the economy is facing such as corporate earnings and the mortgage crisis.

Morton Marcus, director emeritus of the Indiana Business Research Center in the IU Kelley School of Business, said Indiana’s economy will suffer from a decrease in demand from the manufacturing industry. He pointed out how this is already evident in the automobile industry.

Marcus remained optimistic and said the economy would look better next year.
He offered everyone simple advice to survive next year’s economy.

“Don’t do today what you can put off tomorrow,” Marcus said.