Long-Range Projections
Summary of Current Projection: February 2009
National
The quarterly U.S. forecast of November 2008 was used as the basis for this long run projection. As shown in the Table below, that forecast showed real GDP growth averaging only 1.6% over the period 2008-2011. Employment was expected to rise at a 0.3% rate, while consumer inflation averaged 2.9%. Over the period 2012 to 2029, real GDP growth is well above the near-term performance. It is basically equivalent to that projected in August 2008, as is our projection of employment growth. The long-run growth in both output and employment are in line with our assumptions about long-run potential. Inflation is lower in the long-run than in the near-term.
| Variable | ||
| Real GDP | ||
| Total Establish. Employment | ||
| Consumption Deflator | ||
Indiana
The Indiana long run projection uses our November 2008 short run control forecast as its basis. The resulting long-run projections for employment are essentially equivalent to our August 2008 projection.
For the projection of the industry gross state product variables (GSPs), we used the GSP historical data released in July 2008 which covers the period 1997 to 2006. Productivity is defined as the ratio of GSP to total employment in an industry. Projections of productivity together with projected sectoral employment levels are used to calculate GSP. Our productivity assumptions for the state are very close to those used in February. As a result, GSP growth in this projection is virtually identical to our previous projection.
The average growth rate of total Gross State Product over 2012-2029 is projected to be 2.8% per year. GSP in non-manufacturing grows at slightly above a 2.9% rate, while manufacturing GSP growth averages 2.6%. Over the same period total Indiana employment is projected to grow at a 0.9% rate, with employment in manufacturing falling at a 1.1% rate, and in non-manufacturing rising at a 1.2% rate.
