It is a pity no town crier rings our news about the latest data for our nation and state. Last week the U.S. Bureau of Economic Analysis made public the 2016 GDP figures. Did members of the Indiana General Assembly or the state administration pause to study and reflect on these numbers? I doubt it.
Possibly some isolated journalist picked up a news release on the internet, but I doubt it. And what would that lone soul report? “Indiana ranked 42nd of the 50 states with a growth rate of just 0.8 percent in GDP during the closing three months of 2016, compared to the national advance of 1.9 percent.”
No, she or he didn’t, not if she or he wants to do any interviews with state officials in the rest of this calendar year. She or he would have to dig and find something cheerful to give every Hoosier a warm, fuzzy feeling: “Indiana doubled New York’s economic growth rate in the last quarter of 2016. Details at 11, 10 Central time.” This wouldn’t be exactly true, but close enough to be acceptable.
The people who sell the idea that Indiana is in the midst of a boom would discount a single quarter and compare 2016 quarter 4, with the same quarter a year earlier. Then our annual GDP growth rate was 1.4 percent (23rd) compared with the national 1.8 percent rate.
We always learn by comparing different periods of time. Thus, from the start the business cycle in 2002 to its end in 2009, our state’s average annual rate of economic growth was just 0.55 percent (46th) while the nation managed a 1.4 percent annual rate. Business boomers, on the other hand, would favor our 15th-place ranking from 2009 to 2016 (2.0 percent vs the nation’s 1.9 percent GDP growth rate).
Some Hoosiers often prefer the middle ground. For the entire 14 years from 2002 to 2016, Indiana’s economy averaged 1.3 percent growth while the nation managed 1.7 percent. We rode 34th in the GDP derby.
All of these many numbers tell us just one thing: the national economy is moving along, slowly, but moving while Indiana usually lags behind. Yes, we have spurts of growth, but they are few and far between.
Ah, but the worldly wise will tell you: “Indiana is changing even faster than the rapid change in the nation.” Statistically, that’s difficult to prove with the data at hand. From the bottom of the Great Recession in 2009 to the end of 2016, the composition of Indiana’s economy (our industry mix) has changed by just 3.40 percent, hardly a stunning difference from the nation’s change of 3.37 percent.
Where Indiana was 19.5 percent different from the nation in 2008, we have drifted to a 20.2 percent difference. That’s hardly spitting distance. Should we aim to be more (or less) like the U.S.? Whichever we choose, when will our state stop dithering and get moving?
Morton Marcus is an economist, formerly with the Indiana University Kelley School of Business. Send comments to firstname.lastname@example.org.