SOUTH BEND — The hard times just keep coming, and a new forecast shows they're not likely to go away any time soon. The annual economic report from economists at Indiana University predicts a statewide recession next year that will include the loss of at least 15,000 more jobs.
The report also predicts unemployment in the Indianapolis area won't peak until 2010. That's much later than previous forecasts, and economists say it could also trickle down to the rest of the state.
It all adds up to more unwelcome uncertainty for thousands of local workers, now forced to wonder if their jobs might be next up on the chopping block.
Karl Kirchner says he was never one to roll the dice on life.
And after 20 years working at Dutchman Coach in Elkhart County, the Goshen resident says he thought he'd never have to.
"I was with them for 20 years. Not in the same plant, but off an on," he said. "I expected to be there until retirement."
But, 6 weeks ago, that all changed.
He joined thousands of other RV employees across the area who have now been laid off, as the industry continues to be hit hard by a downturn in sales.
His future, he said, was suddenly down to just one option.
"Unemployment. That's it. It's tough," he said.
A new forecast from Indiana University economists suggests it may stay tough for a lot longer, in a lot more places.
"Including here [in Northern Indiana]," said Indiana University-South Bend Economics Professor Dr. Grant Black. "Certain parts of the state will feel those effects much heavier than other places, and we definitely have been a driver."
"Particularly on the East side, in Elkhart County, we have been contributing to the downturns seen across the state. Given the pretty heavy reliance on manufacturing, that's going to take a while to recover from," he said.
Manufacturing and construction sectors have seen 5 straight months of job loss, while other industries, like hospitality, education and government sectors have continued to show slow growth in Indiana.
But manufacturing is likely to see a further slide, Black said.
And it won't be the only sector to see it. The "ripple effect" is already starting to show.
September's retail sales report came in at its lowest level in nearly 40 years.
"The economy's slowing down. Production's slowing down. That's going to drive incomes down. People aren't going to be spending as much. Businesses and individuals aren't earning as much. So, that's going to reduce your demand for other types of services, goods, and so on. That starts trickling down into these other sectors."
Still, there is one silver lining.
"We're definitely faring better than a lot of other areas," Black said.
Unemployment rates in Indiana sat at 6.2% in September, down 0.2% from the previous month.
But rates in neighboring states remain much higher. Illinois is the closest at 6.9%. Ohio and Kentucky are both over 7%, and Michigan leads the nation at 8.7%.
A recent report from Site Selection magazine, distributed to business executives across the country, ranks Indiana as the 5th friendliest climate for business. That's up from the Hoosier state's ranking of 11th on the list last year.
So, why is Indiana is better shape than its neighbors?
"Diversification," said Black. "We have a lot of different types of industries in this state. We have high growth areas. We have a very good business environment that's helped to foster a lot of that growth as well."
Expanding that diversity in jobs will be one major key to a quick rebound from an economic downturn, Black said.
But, Kirchner isn't waiting to find out how long that might take.
"My plan is to take advantage of the schooling the government's offering, better myself, and get into a different industry," he said. "I'm going to try to get into the medical end of it. There's a lot of good jobs in that in the Warsaw area. Machining seems to be the future. It gives you a goal-- something to shoot for."
It's a step he's already started at South Bend's WorkOne Center, because he know, it may be the only gamble he has left that just might pay off.
"There just isn't really a whole lot out there right now," he said.
Investors have noticed the lackluster numbers too.
The Dow Jones Industrial Average tumbled for the second straight day Thursday, dropping 443 points, and the consensus on Wall Street is that Friday's U.S Labor Department jobs report will show a 10th consecutive month of declines.
It's proof, experts say, that the newly acknowledged recession is just settling in.
So, what can you do to help weather the storm?
"The best thing is to get on a budget," said Black. "Control your spending. Plan for saving. Think about creating emergency funds with an eye on how much you might need to survive for a few months in case you face layoffs or lose some of your income. And then, try to reduce borrowing. Credit can really come back and hurt a lot of people."
The team of IU Economists who helped create the forecast will present their findings at IUSB on November 13th.
