Ind. economic recovery sluggish

Indiana’s economy is stuck in idle, according to the Leading Index for Indiana (LII), a project of the Indiana Business Research Center at IU’s Kelley School of Business.

The LII fell by 0.5 percent in May, reaching 96.4.

The fall, while not catastrophic, shows that Indiana’s recovery is looking “increasingly wobbly,” the IBRC stated.

The LII had made significant progress in fall 2010, but last month’s decline means that Indiana’s economy has lost all of those gains.

The drop was based on a number of factors, according to the report.

Housing was one of these. Confidence in the housing market fell, which means that a recovery in that sector “is a long way off,” the report stated.

The automotive sector also suffered declines. Car dealership floor traffic fell 5.9 percent in the past year, the report stated.

Unfilled orders for vehicles and car parts fell in April, and May auto sales were disappointing, falling 3.9 percent from last year. Car sales were at approximately 13 million in April, but they fell to below 12 million in May.

The LII was developed for Indiana businesses and governments to provide a signal of changes and the general direction of Indiana’s economy. It is updated each month.

The LII’s lowest score, 94.8, came at the beginning of 2009, after a long decrease during the economic crisis that started in 2008. The index has seen some increases since then, but they have been at an unstable rate.

The index reached its highest post-economic crisis score of 97.4 in January of 2011.

The LII made increases from fall 2010 to the January 2011 peak, but all of those gains have now been erased after May’s update.

— Zach Ammerman