Despite labor force shortages, inflation, and the winter surge in COVID-19 cases, experts are predicting further economic recovery from the early months of the pandemic going into 2022.
Michael Hicks directs Ball State’s Center for Business and Economic Research and helped author its 2022 economic forecast.
His 2022 projection said COVID-19 was still affecting the economy – creating uncertainty in investment and hiring decisions.
Labor:
Job listings for people with college degrees are up 7 percent, and listings for people without a degree are down 8 percent, according to the projection.
Indiana’s unemployment rate has been dropping and hit 2.7 percent in December. In August it was 4.1 percent. But the labor force is declining, which means most people applying now for jobs already have one.
“We have plenty of jobs,” Hicks said. “We just don’t have people who are coming back because they’re sick, they’re dead, they’re taking care of a family member … due to lack of vaccinations.”
Hicks said these labor shortages could be expected to persist as long as people’s decision-making is influenced by COVID-19.
Growth:
Hicks said Indiana recovered faster than most states early on because its manufacturing-based economy remained strong.
“Factory orders were coming in; people were shifting their buying habits from going to restaurants and Disney World to buying an RV and automobile.”
Hicks said Indiana was now on pace with the rest of the nation, as its recovery has plateaued slightly.
Indiana’s GDP in 2021 was projected to be up by 3.4 percent, and it's projected to be up by 1.4 percent in 2022. That’s according to one model proposed by Hicks.
He said states with high vaccination rates were experiencing stronger labor returns.
