The Northwest Indiana economy is seeing about the same level of economic
activity as it did in 1992. And there are no indications of a rapid
turnaround in the next few months.
comes courtesy of an index created by two Indiana University Northwest
professors from the School of Business and Economics: Professor of Finance
Bala Arshanapalli and Professor Emeritus of Economics Don Coffin.
significant growth in the local economy of the 1990s, the region’s growth
has been stagnant the last decade,” said Arshanapalli in a statement
released last week.
He and Coffin
have spent the past year developing the Northwest Indiana Index, a research
project intended accurately to gauge the dynamics of the region’s economy
while at the same time estimating the probability of an upcoming change in
local economic activity.
The index has
two components: the Northwest Indiana Coincident Index, which provides a
monthly snapshot of the region’s progress; and the Northwest Indiana Leading
Index, which forecasts how the Coincident Index will change in the next six
should be particularly interesting to public officials, as well as those in
banking and real estate,” Coffin said. “Or really anyone interested in
trends in local economic development.”
Sustaining Grant Fellowship funded the research and provided Arshanapalli
and Coffin with the assistance of Vicki Urbanik, a student in the business
school’s post-baccalaureate certificate program in accounting.
Chesterton Tribune community editor—has assisted the team by researching
the coincident and leading economic indicators developed by other states and
regions to collect comparable data.
including Indiana, have developed indicators representative of their
statewide economies,” Urbanik said. “But it’s far less common for regions,
like Northwest Indiana, to have such an index. In my opinion, this project
will help Northwest Indiana stand out as a leader in planning for a more
prosperous economy. As a lifelong Northwest Indiana resident who is very
hopeful about our region’s economic future, I was thrilled to be given a
chance to participate in this work.”
Indiana Index measures economic data from January 1992 onward. Arshanapalli
and Coffin noted two important findings when reviewing data from the last 20
years, the statement said. “First, the region’s economy began slowing down
in early 2000, much earlier than the nation’s economy. As a result, the
region experienced a deeper and longer-lasting recession than the U.S.
economy. Additionally, the timing of the region’s last downturn was roughly
similar to that of the nation’s downturn. Locally, that slowdown began in
May 2008 and lasted through May 2009.”
mined from the Leading Index will serve as a timely and useful signal of
shifts in business cycle phases and will help to predict impending expansion
or contraction of the local economy,” the statement said.
that their key set of leading economic variables should produce a negative
reading prior to the onset of a recession and vice-versa for any uptick in
the economy. “In general, three consecutive monthly drops in the Northwest
Indiana Leading Index would signal an upcoming recession. Three straight
increases would signal an expansion,” he said.
Urbanik said she
views any monthly drops as an opportunity, not a threat.
Indiana Index data shows some serious challenges,” Urbanik said. “But as
I’ve learned both from being a student and from personal experiences, even
seemingly insurmountable problems present an opportunity—the opportunity to
tap into existing resources to find long-lasting solutions. The key for all
of us who live, work and study in Northwest Indiana is to use our ingenuity
and creativity to harness the incredible strengths in our region for our
Indiana Index will be updated monthly and published at www.nwitimes.com/business/special-section/index/