Indiana outpacing Midwest in economic growth; Illinois in near recession
The U.S. economy is expected to expand at roughly 2.5 percent through the end of this year with growth slowing to 2.2 percent in 2018, according an analysis from Ball State University.
According to the same analysis, Indiana, Ohio and Wisconsin will experience similar economic growth, outpacing most Midwestern states, while states like Michigan and Illinois are expected to underperform.
Michael Hicks, director of Ball State's Center for Business and Economic Research (CBER), believes that despite the slow GDP growth, labor markets are at full employment, with little additional slack. It is likely that employment growth will more closely mirror GDP growth in the coming years.
“At the state and national level, tax and regulatory reforms may improve economic growth, but it is unclear whether or not more substantive problems are contributing to the lengthy period of slow economic growth,” he said.
Hicks also pointed out that Illinois’ economy has essentially ceased measurable economic growth.
“It is not in recession, but the expansion of the economy is now beneath the natural population growth rate, signaling a protracted period of stagnant or declining standard of living in Illinois,” he said. “Population decline accompanied by a chronic fiscal crisis will place considerable headwinds against expansion in the state.”
Overall, he said the nation has good prospects.
“The current year has seen better than average post-recession growth for the United States, with two quarters of GDP (gross domestic product) above 3 percent,” he said. “This is only the second such occurrence in the last decade. That is important, since GDP growth has entered a period of unequaled stagnation. “
He expects the country to add roughly 3.5 million workers through the end of next year and that those jobs will mainly be in the healthcare, finance, logistics and transportation industries.