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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 Indiana Economic Development Forum Portage, Indiana December 11, 2002 • William A. Testa • Vice President and • Director of Regional Programs • Federal Reserve Bank • of Chicago
Unemployment rate deterioration greater here, due to mfg. greater concentration in Midwest
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”
“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
?Indiana looking back to see the top of the hill? (not really)
What will be manufacturing’s ultimate role in the U.S. economy?
Much like the nation, Midwest mfg. output climbs with little or no growth in labor
Midwest incomes derive from the mfg. sector to a greater extent than the nation
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”
Manufacturing job levels are volatile; downturns often stretch longer than recessions
Who is likely to reduce assembly capacity? Source: Ward’s Automotive Yearbook
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