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Economic Assessment and Manufacturing Perspective

Economic Assessment and Manufacturing Perspective. Indiana Economic Development Forum Portage, Indiana December 11, 2002. William A. Testa Vice President and Director of Regional Programs Federal Reserve Bank of Chicago. GDP growth surged in the third quarter.

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Economic Assessment and Manufacturing Perspective

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  1. Economic Assessment and Manufacturing Perspective Indiana Economic Development Forum Portage, Indiana December 11, 2002 • William A. Testa • Vice President and • Director of Regional Programs • Federal Reserve Bank • of Chicago

  2. GDP growth surged in the third quarter

  3. Investment spending is picking up

  4. Manufacturing has been hit hardest--this time

  5. Manufacturing jobs

  6. Manufacturing Job Declines by Region

  7. Employment growth

  8. Payroll jobs…Indiana vs. MW vs U.S.

  9. Unemployment rate deterioration greater here, due to mfg. greater concentration in Midwest

  10. Indiana Unemployment

  11. Manufacturing and the Midwest • Today • Long term….a very successful Midwest • Long term….a productivity paradox and development /challenge • Short term (worries and concerns) • new technology industries • autos moving south? • overseas? • “investment overhang”

  12. “Before you go any further, let me reiterate that I, for one, see nothing wrong with killing the messenger.” Source: Business Law Today, March/April 1998

  13. ?Indiana looking back to see the top of the hill? (not really)

  14. What will be manufacturing’s ultimate role in the U.S. economy?

  15. Much like the nation, Midwest mfg. output climbs with little or no growth in labor

  16. Midwest incomes derive from the mfg. sector to a greater extent than the nation

  17. Northwest Indiana Morphs out of Manufacturing

  18. Manufacturing and the Midwest • Today • Long term….a very successful Midwest • Long term….productivity paradox • Short term (worries and concerns) • new technology industries • autos moving south? • overseas? • “investment overhang”

  19. Manufacturing job levels are volatile; downturns often stretch longer than recessions

  20. On net: auto corridor has been extending south

  21. Who is likely to reduce assembly capacity? Source: Ward’s Automotive Yearbook

  22. Economic Development--Can Manufacturing be cast aside? • No, Indiana remains a manufacturing economy • Manufacturing has bounced back before and there are indications that the present period is not unprecedented • Yet, the ongoing challenge is to re-make our communities

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