Business, economic leaders say Indiana and Kokomo are ‘getting back to normal’

KOKOMO, Ind. - With income growth steady and employment growth slowing, local and state business experts predict that the region and state will start to "get back to normal" in the coming year with balanced and on-trend growth.

"This year, everything just seems to be getting back to normal," said Dmitriy Chulkov, Indiana University Kokomo professor of business analytics and economics.

The prediction was made by a panel of local and state business and economic experts Tuesday, November 12, at the Futurecast economic outlook tour at Indiana University Kokomo, presented by the Indiana University Kelley School of Business.

In addition to Chulkov, the panel included Mark Frohlich, associate professor of operations management; Marina Niessner, assistant professor of finance; Robb Blume, president and CEO of Community First Bank; and Brian Vander Schee, clinical associate professor of marketing. Chittibabu Govindarajulu, dean of the IU Kokomo School of Business, moderated the discussion.

Looking at the coming year, Frolich said, Indiana is expected to have a better 2025 than the rest of the nation. "This year, it's looking pretty good for us," he said.

Gross domestic product (GDP) is expected to increase to 2.9% in the coming year, moving up from 2.1%. Central Indiana is a large driver of the economy, Frolich said, as productivity in Indiana exceeds the national average at 7.8%.

New investments in Indiana are also contributing to projected growth. The Indiana Economic Development Commission announced in October that more than $38 billion in new investments were made in the state during the first nine months of the year - more than those made in all months of 2023.

Zeroing in on Kokomo and the Howard County area, panelists discussed unemployment, growth, and wages.

Last year, regional unemployment hovered around 2-3%, and is projected to increase to 4-5%, a natural rate. "We're never going to have zero unemployment," Chulkov said, citing cyclical factors like job growth and retirement.

In Kokomo and Howard County, though, numbers are expected to exceed the region and land around 7-8%. While the number of jobs in the area has increased, Chulkov noted that the number of individuals looking for employment has also increased.

"The labor force is growing faster than the number of jobs," he said. He added that this is normal, as many workers left during COVID, and are now seeking to return to the workforce. Over the next few years though, numbers in Howard County and Kokomo should come to reflect the regional average.

A bright spot in employment highlighted during the panel was the coming StarPlus Energy joint venture. "If everything goes according to plan," Chulkov said, a total of 2,800 jobs are expected to come to the area between the two plants; about 8% of employment in the county, promising a "huge increase" in local employment.

Blume also cited StarPlus Energy as a source of expected growth in Howard County, citing the demand for housing and the ancillary businesses surrounding the project, as well as Kokomo's growing tourism industry - especially in the areas of youth sports, dining, and entertainment.

About 1,500 apartment units, several hotels, and single-family home projects are also in development, Blume stated, addressing concerns over housing availability.

"Those are all positives," Blume said.

Addressing wage growth, Chulkov said that for the first time since he has begun participating in Futurecast, Kokomo is exceeding the national average in income growth, at an average of more than 5% growth in Kokomo and Howard County.

This can be attributed in part to wages catching up to inflation, but locally, wages have surpassed inflation. "That's a big positive for the region," Chulkov said, though he added it may be difficult to sustain.

During the discussion, each panelist did mention the potential for uncertainty in the coming years following the results of the November 5 election, with special attention paid to calls for tariffs and the possibility of retaliatory tariffs. But each pointed out that despite the uncertainties, the path forward for Indiana, Howard County, and Kokomo is clear.

Other highlights included:

• Job creation is forecasted to shift to the services sector over the next three years.
• Construction growth will remain strong in 2025.
• Indiana is projected to maintain a rate of unemployment under 5%, tracking the U.S. rate closely.
• Employment growth is expected to remain near 1% over the next 18 months.
• Pressures of inflation are expected to continue to ease, with core inflation nearing 2.3% in 2025.
• The unemployment rate is expected to increase in the first half of 2025, but stay below 5%.

Education is KEY at Indiana University Kokomo.

Public link

Please use the above public link if you want to share this noodl on another website.