Indiana Business Outlook Panel: Schererville

Outlook 2021: Schererville

The year 2020 has been unprecedented, and there are many unknowns heading into 2021. This virtual event is your chance to hear the perspectives of several of the state's leading economic thinkers as we all wonder what is in store for 2021.

12 pm (CST) on Friday, November 13

Faculty members from the IU Kelley School of Business and local panelists will offer forecasts and perspectives on the global, national, state and local economies, as well as the financial markets.

New this year is the addition of a local “C-suite” member of the business community to offer perspectives and responses to the forecast.

There will also be a Q&A session to answer attendee questions.

This event is sponsored by the Lake County Advancement Committee and the School of Business and Economics, IU Northwest

Description of the video:

Hello everyone. My name is Cindy Robertson. I'm Dean of the School of Business and Economics at Indiana University Northwest. And on behalf of the Lake County Advancement Committee, I'd like to welcome you to the 2021 economic outlook for Northwest Indiana in our virtual format this year. As you know, this year has been anything but normal. And we're delighted that our colleagues from across Indiana University are still willing to share their projections for the fate of our academy locally as well as globally. It's one of the high points of my of my time as dean every year. And honestly for this year, I don't I don't know. I don't I don't think that I would want their job this year because it's it's to play. So I'm really interested to hear what they have to say. And I think a lot of you are, we've had over 90 people register, so we're just delighted that you've chosen to join us today and look forward to some thought-provoking questions at the end as well. I would like to recognize sponsors of the Advancement Committee who helped make the work of the committee possible. Lake County Economic Alliance, social convention and deserves authority. Lake County Public Library killing him at College of Saint Joseph. Sense your bank. First mid west bank, People's Bank by natural bay, VMO, Harris Bank, Nevskoe, and Karen and Cornell Rob. Actually, our program is a little longer this year. We are fortunate to have an additional panelists as well as a moderator. And what I'd like to do is get started as quickly as we can because we have a lot to get through. And it's my pleasure to introduce your moderator for today, Dr. Phil Paolo. And he is the Associate Dean of Academic Programs at the Kelly School of Business in Indianapolis. And he will share a little bit about the program as well as introduce the speakers. So enjoy the hour. I think it's going to be information packed. Phil. Thank you, David Roberts. It is an absolute joy to GD you with our other Indian adverse to colleagues to talk about what 2021 hole for us. You know, if I was to sort of capture the mission of Indiana University and sort of one sentence is to positively transform the knowledge, the people, the organizations, and communities that we touch. And the business schools, the business educators here at Indiana University, we make sure that our programs are graduating talent. That drives prosperity in our great state. That disseminate information to help businesses make better decisions. And also to broaden business opportunity and economically challenged communities. And helping businesses, helping to ease and an organizations to look forward to next year. This is one of the best ways we can help deliver some of that value. So I've got a crackerjack team of economists that finance specialists who are going to look into the crystal ball and tell you what 2021 has a store based upon our models and in the university. So I'm going to introduce our, our, our speakers very, very briefly in any order they're going to present. And then I'll hand it over and we'll get into the, into the show. You'll hear first from Professor Elie MFI craft. Hell, he's a colleague of mine in the Business Economics Department at the Kelly School. Now he's been with us quite a while. Kelley School in 2006 and has professional, has business scholar in international economics and also the intersection of, of business, society and government. Now he's gonna talk about the national and global outlook. Then professor treaty comma will give us the perspective on financial markets. 3d, former department chair of our finance department. And also he's currently the faculty chair of our MS and Finance program on the bloomed campus. I've worked a long time. He's been a transformative leader at the Kelly School. His background is, he has background in several areas. But two notably in terms of trade, trade protection impacts to domestic industries. And also sort of the economics and decision-making around hostile takeovers. After Srini tells us where the stock market is going to be and how we should adjust our retirement portfolios, will then scope it down and talk about our great state. A. Ryan Berger will give us the State Outlook. Ryan is a, as a finance professor who teaches our Columbus campus. And he has a background as some good corporate experience both in valuation and in risk management. Then it'll bring it home to the Northwest campus here with Professor Michael Polak. Micah, a professor of economics with expertise and regional economics, financial economics. Mike has also Director of the Center for Economic Education and Research, which keeps its eye on the on the economy in the greater Lake County area. And as Dean Robert mentioned, we've added a corporate person sort of a seat as due from the C-suite to our panel. You're going to hear from John robot III. John is CEO and President of, of, of revolution. Revolution is a very successful sports marketing company based in the, in Chicagoland. And we're proud to count John is one of our own as Kelly alum. His experience in professional sports is very oppressive from nascar to F1 for FIFA, two, SEWA, Josh brought all that together with a great business of movement, a sports industry forward John, to give us the perspective on what this, what this pandemic late the economy, how that's affecting his business and what, what, what he's Herron from other corporate leaders. So that further ado, let's get to the main show here. I'm going to hand it over to my colleague Elly. And she's going to look into a crystal ball. Tell us about the US and the rest of the, of the global economy. Le. Thank you very much to everyone. In a time of no travel. A. My mission is to take you around the globe, highlighting the economies of the US, China, he'll area, and Latin America. Last year, I group at the Ib RC, forecasted a global output growth of about 3% for 2020. But a macroscopic virus came into the picture. And instead of the growth in economic activity, we are experiencing a global recession of a magnitude not seen since World War II. It's estimated that by the end of 20-20 to global economy will have shrunk by 4.4%. And our group is cautiously optimistic that our estimate of a 5% global recovery in 2021 will be just enough to erase the 20-20 Global drop in output. So let's look at the United State or a little bit more closely. Second quarter of 2020, the Bureau of Economic Analysis recorded macroeconomic statistics never seen before. From April to June, the yield, the decline in US GDP was 9.5%. To put that in historical perspective, at the height of the global financial crises in the second quarter of 2009, the GDP contracted by 3.9%. In April 2020. The US Bureau of Labor Statistics recorded a record unemployment rate of 14.7%. As more than 20 million Americans abruptly lost their jobs, it could take years to return to the 3.5% unemployment rate that the US recorded in February 20-20. Because no one really knows what the post pandemic economy will look like. Corporate default rates are increasing. And more than half of the small business owners surveyed by the US Chamber of Commerce, worried about having to permanently closed their businesses. Clearly, the pandemic has created extraordinary circumstances and new challenges for policymaker in the United States and around the globe. It has effected aggregate supply and aggregate demand simultaneously. And these two sided market shock has intensified the need for greater and more coordinated interactions between monetary policy and fiscal policy to try and minimize the economic harm to downside risk to the forecast in the United States is the intensifying political divisions. However, thanks to the country structural potential, the flexibility of the economy and the world appetite for the dollar. We estimate growth to be above 3% in 2021. Now let's look at the second biggest economy in the world, China. At the end of 2020, China experienced its first output decline in more than four decades. It is now expected to expand at its lowest annual pace. Since Mao's Cultural Revolution in 1976. That said, China will be the only major economy where the positive growth in the year 2020, we forecast China's GDP to expand by 2% in 2020. And it is projected that the GDP growth would further increase in 2021. Above 8%. The return to growth in China has been powered by the countries state back industrial sector thanks to a pandemic that originated within its border and left economies outside of China flung re, China's manufacturing power shifted to address the global demand for medical products and other work from home equipment. That said, it is important to signal that China has relatively strong recovery, supported many economies around the world. Specifically, China stimulus led infrastructure inks expansion allowed many export-led countries to stabilize their economy. Next slide, please. So now onto the Euro area. There you will area is divided into zones, the North and the South. In the North, Germany and Netherlands have leveraged them much budget surpluses and robust industrial structure to strengthen their resiliency to the pandemic. However, in the South Spain, Portugal, and Italy have put the most stringent lock downs and counted the greatest number of death. Their fiscal space was initially more constrain and therefore the safety net they could offer their businesses and their residents more limited. Furthermore, the southern economies do rely heavily on tourism. Because of these, the economic burden has been significant in the southern part of the Euro area. Although we estimate that by the end of 2020, the Eurozone annual GDP will dropped by 8%. The safety nets that were deployed by the European institution, we remain essential to stabilize the European financial market. Likewise, the next tool support the nation expenditures related to the pandemic provide credit guarantees to firms and support the most vulnerable household in Europe. We're hopeful that with a sustained coordinated fiscal and monetary stimulus, the Eurozone economy will rebound and that economic activity will increase by 5% in 2021. Finally, let's take a look at Latin America. The region includes large economies such as Brazil, Mexico, Argentina, that represent 8% of the world population and account for 30% of global coffee, 19 cases, and 1 third of debt. Many countries in the region depend on tourism. Commodity exports, or capital inflows, including remittances with commodity prices at their lowest historical level. Tourism at a stand still, and remittances dropping as unemployment has risen around the world, those economies are greatly hits impacting the region as a whole. Furthermore, these emerging markets cannot increase than that meant without raising fears of future default. The macroeconomic tools to less than the categories of coffee. 19, unlimited. Therefore, a return to pre pandemic growth rate would likely take years. Next slide please. So in conclusion, in the first part of 20-20, virtually every country in the world experienced a simultaneous collapse of its economic activity. Mind you, a collapsed that was historically unmatched in time of peace. The swift, comprehensive and well targeted monetary and fiscal support is improving the prospects that an economic recovery will be achieved by the late 20-20 one pending the absence of prolonged lockdown. And some countries have more budgetary room to maneuver and are enjoying lower cost of borrowing as their monetary institution have further supported the financial markets. Others with higher debt service costs have to rely on global solidarity. The health related, the health-related economic crises is highlighting the fact that our global market approach to trade that has many points of interconnectivity is only as strong as the weakest health system. Economic survival will be the focus in the short-term in 2021. However, more long-term resiliency, you need to be engineered in our global market going forward. So now we're going to move to professor who will be presenting the IDRC financial outlook for 2020. And QALY. And good afternoon. I think recent events have sort of a shared memory, so I love dispense with the usual recap in the interests of time. Next like place. We believe the market recovery since March has nothing to do with the health of the corporate sector as much as to policy intervention. And we expect does influence to continue into 21. The Fed has provided as much liquidity as was needed, thereby wording a money market fund crisis, such as that experienced in 20078. As a result of this tremendous balance sheet expansion, interest rates remain and will remain exceptionally low. Notwithstanding the spike after the FISA vaccine years. This creates a high level of interest rate risk with yield so low, even a small increase will lead to substantial losses in the bond market. The low rates will also make it difficult for pension funds, especially defined benefit funds, to stay above water. Public pension funds will be severely stressed. The 73 larger state-sponsored pension funds reduce the assume returned from 8% before the financial crisis in 2007 to 7.3 in 2017. But this reduction nowhere near matches the declining yields. Furthermore, the stock market recovery is not all that it seems to be an actually hides important details. Most of the rebound has been concentrated. And the five tech giants, which account for 1 fifth of the S and P 500 by market cap. Another significant contributor has been the health sector. There's only down about, about 1% for the year and accounts for 15% of the index. Next slide, please. What does our outlook for 21? We believe Fed policy, you will continue to play the primary role in financial markets in 21, the Fed, a signal that is likely to keep rates low through 23. Inflation risks remain low, which will help keep capital costs low. But growth prospects will, I fear continued to be weak. If you look at dividend futures to gain some insights about what the future holds, the prospects are not as encouraging in the near term. Dividend futures contracts that pay only the dividends on the market in a particular year. And dividend futures prices have historically been good pro, forecasters of future economic growth. And finance scholars have used dividend future prices to impute expected dividend growth rates. The finding is that dividend growth expectations of the next year or down by 28% for the S and P and 25% for the Euro stocks 50. If you use arbitrage method so as to avoid reliance on a particular forecasting model, we can derive a lower bound on expected dividend growth. Dividend growth rates have been revised down since January by as much as 43% in the US and 50% in the UK. E. Cfos are also not same wine. According to a survey by the Richmond Fed, CFOs expect continued slow growth during the next four quarters, averaging about 2.2%. Gdp growth. That I think is at the lower bound of the confidence interval of the 3% growth that my colleague Lee was talking about. And if you've probably surveyed them again after the Pfizer news, they would have probably advised it up to be closer to one number. More than 60% of respondents reported their revenue projections have not recovered to the peak of it Mark, and about 40% report lower employment. More of only about one quarter of the firms that are below peak covered levels, and despite a full revenue or employment recovery by June 21. Cfos also indicate the difference will continue to limit spending and investment. Looking forward fewer than a third of the firms report plans to increase spending on structures of the next six months. What are the risks? Valuations remain hide Rayleigh relative to historical averages. Forward p is around 22, while the historical average is closer to 17. Fed purchases may be suppressing credit risks that have not gone away. And basically there's a tug of war going on between the optimism caused by the FISA vaccine use and fears of continued economic pain. Putting this together for a view of 21, we expect the positives are likely to outweigh the negatives for the market. But don't expect stellar or even normal returns and be ready to weather volatility. We expect valuations will continue to favorite companies which use technology and innovation to adapt to the new business N1. We expect the low interest rate environment will continue to lead to lower fixed income returns in 21. And that interest rate risks will begin to climb as economic recovery continues. So in this environment, what is one to do? The big shift has been that bonds no longer offer as much diversification of equities. And the traditional 6040 Mx that investment advisors typically use may not be of may need some tinkering going forward. The 60-40 mix has provided a compound annual return of 10.2% since 19, 87% this year so far, the prognosis may not be as attractive. Valuations imply tons of about 5% on the S and P going forward. And as stated earlier, low bond yields are likely to continue with the added sting of very high interest rate risk. It may be wiser to reduce reliance on US bonds are large-cap stocks and seek a more diversified portfolio with more asset classes. Given these observations, it may make more sense to invest it longer. Projects such as infrastructure and private equity and earn illiquidity risk premiums. Residential real estate is also looking more attractive. Returns over the last 150 years have now matched those of equities. A repositioning towards real estate, infrastructure, tips and private equity may reduce volatility. And now my colleague, Professor Ryan brew, we'll talk about the specific outlook for Indiana. Thank you, Professor comma, s1 here too. Give my indication of the economic outlook for the state of Indiana like the world and the United States, Indiana continues to recover from the pandemic which hit North America like a tsunami earlier this year, in March. As the waves of infection moved through the economy. Various geographic locations in various industries have been affected at different times, in different ways and to different degrees. Hardest hit had been locations and industries reliant upon significant population densities, such as large cities like Chicago, and the businesses and properties located their travel destinations, particularly requiring airline flights, hotels, restaurants, bars, churches, and sporting events have been affected. Yet while the first wave moved through these areas, it is reached the cradle of goods manufacturing and production, home to the state of Indiana. While services, especially small services companies like barbershops in dentist offices are most subject to failure in furloughs. Manufacturers have also been feeling the pain among businesses in manufacturing and assembly. Hardest hit are smaller firms more likely to cap size even when the life preservers and the forms of the cares ACT funds are set to expire now. So the background of Indiana as an economic center, as I said. And again, as the nation's most prolific manufacturing and goods producing state, generating about 17% of GSP for manufacturing, and an additional 22% or so of GSP from goods production, or nearly 40% of its total output for making things. Some might think of Michigan, Ohio, Pennsylvania, Wisconsin, or even Louisiana. Will Indiana leads this pack? Because we make things in Indiana, we contract sharply in the early stages of recession, and we expand quickly in the early stages of recovery. For instance, in the second quarter of 2020, while the US fell in output by a record amount annualized 31.4%. The Hoosier State fell by an unprecedented thirty-three percent. We've experienced recovery to some degree since then as the pandemic lifted somewhat during the warmer summer weather and yet covert 19 confirmed cases, hospitalizations and deaths are spiking again here and across the Northern Hemisphere as we brace for four months or so of cold weather. A time when general coronaviruses are known to oftentimes proliferate. Why the economic contraction and y expected volatility in the future. We've heard that others have also indicated we might experience some expected volatility in the months to come. We rightly as a society self-directed, this exogenous shock to gatherings, work, family, sports, social, and other groups. We locked down to flatten the curve. We intentionally shut the economy down to help mitigate the effects of the virus. The economic damage thus far has been swift and deep, quite unlike the damage wrought by the great recession. Because we now nine months forward from March first, know more about the virus with therapeutics vaccines, the way it spreads or does not spread is less likely will need to entirely shut down the economy again. However, with virus spiking and a new administration set to begin work in the United States and January, the option remains on the table. My best estimate is we will begin to utilize other forms of virus controls such as masks, ventilation, and distancing to avoid full-scale shutdowns. However, this does not mean people will go about activities like they did in the pre pandemic days. They will likely not get to who will suffer and who will benefit from this in a moment. But next, I want to discuss the Indiana labor market. Within the labor market, there are two components. The widely known publicized unemployment rate and the less known, but just as important labor force participation rate. I'll discuss each in turn. The unemployment rate in Indiana spiked to 17.5%. In April, the US spiked to 14.7%. Large metro areas and vacation travel destination, destinations tend to spike harder. For example, Detroit hit 24% unemployment in April, and Hawaii remains over 13% unemployment right now. By contrast, cities throughout indiana have recovered better and unemployment is now 6.2% across the state as a whole. Again, this beats the US unemployment rate, which stands at 6.9%. The second measure of health and labor markets is the labor force participation rate, which describes the percentage of adults either working or seeking work in a given geographical region. The labor force participation rate is a calculation will kick out adults of within the unemployment equation when they'd been seeking work for longer than three months. Thus, ostensibly, we can end up with a low unemployment rate and a low labor force participation rate, which would not be good. Rather, we want a low unemployment rate, but we want a high labor force participation rate. Well, the labor force participation rate in Indiana was reduced by the great recession, which harm the labor market considerably. The labor force participation rate reached a post recession rate of 65.1%. By 2016 through 2018, the all-time peak was in 1995. So we're down from 65.1 at a peak group post Great Recession to a current level of 63. When the unemployment rate and the labor force participation rate are considered together, losses across the state of Indiana since the peak labor market of 2018 have resulted in the elimination within the state of Indiana over, over a 100 thousand workers. And of these losses, 70 thousand or so have been lost during this current pandemic of 20-20. Nonetheless, as dire as that sounds, Indiana stands as a relatively light leisure and travel state and a relatively heavy manufacturing and goods production state. And it fares well versus neighboring states as well as peer states. Next slide please. Industries that were initially affected in Indiana include travel oriented businesses including airlines, hotels, and restaurants. Manufacturing was also a hit hard a month or so later, but only half as hard. Industries across Indiana, including leisure and hospitality, manufacturing, goods production, education, healthcare, and retail have rebounded somewhat. Yet they've all suffered three to 5% labor losses since March. Of these manufacturing losses account for more than 50 thousand total jobs lost, or 50% of our total losses to Indiana output capacity. Additional losses will depend likely on continued responses to the virus such as therapies, behaviors, vaccines, and national debt increases notwithstanding additional fiscal stimulus. Next slide, please. The last quarter of 2020. What's the what's the Indiana State Outlook like? So the last quarter of 2020, in the first quarter of 2021 will likely include output interruptions or attenuations, the avoidance of which is largely dependent on additional fiscal stimulus as well as effectively developed and distributed therapeutics and vaccines. As our collective wisdom as to how to defeat the virus continues to improve. Thus, the last half of 2021 will likely show improvements to output and perhaps to a lesser extent in the labor markets. A while ago I hinted who will likely suffer and who will be rewarded as we move forward. We'll who will suffer. Big cities, major sporting organizations reliant on large, densely populated events, socially oriented services like salons, Dennis doctors and others performing preventive care, optional care and elective services. These businesses will suffer relatively more until the pandemic lives. Sadly, low wage earners will suffer more than high wage earners because service jobs will continue to be disproportionately affected. And these workers will be more at risk to furlough or unemployment who will benefit places of business with less population density. Small and mid-size cities, rural communities, automotive. She's benefiting because public transportation is less invoke these days. Also benefit. Also businesses able to continue to capitalize from technology will benefit. There'll be able to survive longer and they may shake trends going forward. Indiana stands to benefit from some of these trends currently set in motion by the pandemic. As a state with smaller cities with a large presence in automotive and pharmaceutical development. Indiana stands to benefit from its manufacturing culture that could also benefit from reshoring jobs. Indiana is a state comprised of midsize and small cities, all of which stand as relatively attractive wrote relocation spots. And we might benefit from population gains arising for migration away from large Midwest cities, such as Chicago, Detroit and others. And with that is now my pleasure to turn it over to Micah. And he will provide a recount of what's been happening in Northwest Indiana and the outlook in Northwest Indiana for 2021. Thank you. Good afternoon, everyone. Thanks for coming today. It's great to see everyone even if it's virtual. So I'm going to talk a little bit about Northwest Indiana. And when I say Northwest Indiana, unless I say otherwise, I'm generally talking about what's called economic growth region one, which is the seven county region in northwest Indiana. That's just for convenience sake, kind of as a comprehensive measure. These things don't change that much if you look at just Lake County or three counties are four counties. So most of this applies to everything. So if you haven't noticed already, we've been talking a lot about employment trends. And that's partially because that's the data we tend to get the quickest. So a natural question might be, Well, what's happening to income and things like that and that's slower for us to collect. And especially at the regional or local level, we may not get that for quite some time. And so that's why we're focusing a lot on employment and unemployment in the labor force. And that's not necessarily a bad thing either because this particular economic pandemic crisis hit employment especially hard, right? It's not something that's structurally affecting certain industries or anything like that. It's really hitting Small Businesses, good service providing industries and things like that the hardest. And so I wanted to show you a few more statistics just focused on Northwest Indiana. So April 2020 was the month when pretty much everything hit all at once in Northwest Indiana lost almost 30 thousand jobs in a single month. That's 10.7% of the entire employment with Northwest Indiana. And at the same time, or unemployment rates spiked to 60% higher. The highest previously recorded for northeast indiana ever, up to almost 20%, 19, 0.8%. My unemployment, it's a little bit different than what Ryan the others had here. These are not seasonally adjusted, so they're slightly lower. But for comparison purposes, it's fine here. So you can see in April we hit unemployment rates of almost 20%. Since then, the informants had been slowly dropping across the state, in Northwest Indiana and across the United States. What's really striking is that Northwest Indiana wasn't really affected differently than the rest of the state in the United States. Or if they were, we actually maybe got out a little bit better than the rest of the state. And you can actually see that on the left graph here, which is unemployment insurance claims. So you can see kind of ticking along at the beginning of the year there. The United States tended to have kind of the highest unemployment insurance claims and followed by Northwest Indiana. Indiana was the lowest. And then when the pandemic kit and the stay at home ordered came into effect and we had lots of people laid off. You can see all these claims, and this is per capita, so it's adjusted for population sizes spike. But notice Indian actually stayed the lowest of the state in the nation and has more or less than a little bit lower than the state during this whole pandemic. And it's kind of Ryan alluded in some others alluded part that it may have to do with manufacturing. Well, all the industries were hit as a result of the pandemic. Manufacturing was hidden maybe less hard than say, restaurants and bars and retail stores initially. And so even though we're not as manufacturing intensive as we once were, Northwest Indiana, we still are very manufacturing intensive. And so that in some sense maybe buffer to us a little bit a shielded us from the initial effects. But as Ryan mentioned, this isn't necessarily a good thing in the long-term because as I'll show you in a second, manufacturing hasn't really been recovering in the way these other industries have. So if we go to the next slide, please. So this is a graph that shows the change in employment compared to march. So all these three lines start at 0 in March. And then as you go to the right, as they change, that shows how the jobs compared during that month to March. And I've broken out three industries here. So we've got manufacturing, retail, trade, leisure and hospitality. And so you can see that all got hit very hard in April. At losing, manufacturing was the least hardest hit, losing 2.5% of jobs. Whereas leisure hospitality, which includes bars, restaurants Hit, got lost 16% of their jobs in just one month. But over time, retail trade, leisure and hospitality has been picking back up some while manufacturing can just continues to decline. So manufacturing kind of sheltered us a little bit at the outset. It's been struggling since then to recover some of that employment loss. And you can see that as of July and August, some of the places, some of the industries like leisure and hospitality, we're actually back up to their march levels. And retail trade, which was coming back up in this reflects businesses figuring out how to operate under these unusual circumstances. But then it's September kinda most recent data we have, as, you know, the cases start to rise again and we have more and more hospitalizations, You can see employment starting to decline again. So this just shows you how these three industries that had been relatively important in terms of the pandemic and also important in terms of our region, had been affected in terms of. Employment. Now, not everything is bad and I love that. Ryan referred to some of the population migration effects because we've heard a lot about the pandemic, but I want to give you some kind of positive news about Northwest Indiana. So if we go to the next slide please. This is the trend in population. So it kinda got a lot going on this graph. But if you look at the black dotted line, that's the annual growth in population in terms of number of people for Northwest Indiana. And here this is just the three counties of Lake Porter and report. But things don't change too much if you add any other counties as well. And so you can see the black line has been below 0 or close to 0 for this entire time period. And if you go back to 20102 thousand, 5, two thousand, two thousand north of Sydney and generally loses population, right? And the biggest reason we lose population is kinda that middle red color there that's negative, that's below the 0, which is net domestic migration. So for decades, Northwest Indiana has had people moving out of the region faster than people are moving into the region. And it's so fast that people are leaving that immigration and natural population growth can't keep up and overall population drops. But in the last few years, this has slowly been turnaround in 20182019. In first-time sense, annual survey was conducted. We actually had positive net domestic migration, which means more people wanted to move into northwest Indiana than wanted to leave. And you can look at GDP and income noise, other metrics, but ultimately the best metric to determine whether a region is economic success, economically successful and prosperous is if people want to live here. And for the first time in more than a decade, you see more people wanting to live here than wanting to leave. And this is all pre pandemic. So if as the pandemic continues, maybe people decided to move out of the big metropolitan areas, out of Chicago to more rural area. We could kind of gain even further from this. And so this is kind of the metric. I think it's the most important here for Northwest Indiana. With everything going on. You know, we've changed the trend of people moving out of Northwest Indiana and there's been incredible work across the board. I would take me probably ten minutes to list all the organizations that are involved with this. But they ignite the region initiative in many other kind of government organizations and economic development organizations have been working really hard at this and we're starting to see significant changes. So people want to move to Northwest Indiana, which is fantastic. If we go to the next slide real quick. One really huge thing that happened economically was the Cleveland cliffs acquisition of partial or middle in their assets here, notice and yeah, it's kinda came out of the blue. It's one of these things that there's potentially a lot of good things that could come out of it, but there's also a lot of uncertainty. I mean, this company, Cleveland cliffs, never made steel before 2020 and now they're the largest steel maker in the United States. And so how are they going to transition from that? We also are taking one of our biggest sets of mills here in Northwest Indiana and turning it over to a relatively small company that's 3% or something of our middle in total assets. And so how are they going to, whether the uncertainties that come with the steel industry? They do have some advantages though, because they have vertical integration possible through their natural resources, their mining companies. So that might help give them some flexibility to respond to market forces from in the steel industry. But this is a huge thing that just happened. It's really kind of earth-shattering, groundbreaking the end of an era, all of those terms absolutely apply. It'll be interesting to see how it plays out in next few years, especially with the labor renegotiations and things like that. So forecast for 2020. I always like to put up what I forecasted last year part to be consistent and so you can hold me accountable, but also so that maybe you can laugh at me when I'm horribly off, which I was this year. So last year at this meeting, I predicted we'd have about 0.7% growth in 2 thousand new jobs. Unemployment rate would be at 4%. But actually we lost 7% unemployment, we lost 2824 thousand total jobs and unemployment rates at 7.8%. Now we're going to go in 2021. There's a lot of uncertainty, depends a lot on what happens with the vaccine, how quickly gets distributed, how effective it ultimately is. I think that we're going to start moving back towards where we were pre pandemic, but it's going to take some time, probably the first half of 2021, it's going to be pretty rough economically. I think by the second half maybe things will start to be sorted out. Employment tends to lag behind other measures of economic growth. And so I don't think it will be back to full employment until maybe 2020 to maybe 22-23 at that rate. And again or Sydney. And it does tend to kind of respond a little slower than the state and the nation. So that's what we're going to look at over the next year. Next year. If I see you all again back here, you can look at these numbers and I'll put up the 2020 to one forecast and we'll see how he did. But I think it's gonna be a rough economic here. And the businesses that are gonna survive are going to be the ones that figure out how to operate in this environment rather than just hoping it'll go away or putting off operating until it's gone because it's not going anywhere anytime soon. We've got at least six months to a year, if not longer. Before things start to go back to normal, you have to figure out how to operate in that sort of situation. So that's what I have here. Now I'd like to pass it on to John royalty to talk about the C-suite stuff. Welcome fellow villagers. Genre Wadi. I'm broadcasting live from Chicago. I am a product of Kelley School of Business and I am also a resident of the state in Indiana, Northwest Indiana. I have I've had my business as an entrepreneur for now going on 20 years. And I can, and I concur with everybody on the panel here today that there are so many factors that impact our economy, our people, in how the sports business plays into it. From, from my perspective and from where we are. In 2019, we reached the highest level in economic growth in hospitality, hotels, airlines. This level was going to continue to, to amass and, and, and move forward. You realize how much sports and Impact our communities. In our major cities are smaller cities or states and then for us globally. But also you realize that during the pandemic and the isolation, the isolation that has occurred for so many people that the impact of sport shutting down in March for a period of time was, was very destructive across a lot of things. Since I started this business. This is the third recession that my company has gone through and that I've had to lead through. What's different about this recession is the fact that sports was actually shut off. I never put that into my equation as as a business model. That's Ford's whatever, be shut down and go away. In fact, I remember the day that sports shut down because we were running events at the Big Ten tournament in Indianapolis on Wednesday when Indiana basketball was ready to become a national champion. Give the NCA tournament post winning everything in the Big Ten tournament. And we were shut down for the opportunity to see them raise the trophy once again for when I was in school and in 87, we were able to do that. So when that business shut down, we had to really look at exactly how we were going to move forward. While it's been a trial, can, while we work with major companies around the world, major brands around the world. One thing is true. If you work hard for your clients and you find a way for them to move forward. We were actually able to find that our business model was very strong. Areas of media live broadcasting air is including analytics and research, consulting services as it related to gaming in IIT sports. Now when we look at even a report out by Price Water House that shows the trends that are going to happen in the future. We're positioned very nicely to be able to take advantage of those. In fact, most of the live events that we were doing and had done for our clients in stadiums and throughout the country and throughout the world. While those it stopped, we had moved platforms and business to a virtual environment. And we were able to strike new revenue streams, hire new people to be able to handle new services. Innovation. And the will to move forward created that bridge in which we've now started to see live sports make a recovery and continue forward into next year. We expect that with covert shutting down sports, but with a coming back, new decisions that are made, new leadership, that is able to study and push forward. Science and testing of vaccines and the ability to actually go back into stadiums will occur more and more at some point in time, in the middle of 2021. And we will continue to drive forward in media and content, broadcast and analytics and new technologies to drive our business forward. And I'm very bullish about where we're going in the future. Sports will never go away forever. It's just a period of time that it now has to redefine itself and we're part of that definition. One of the things that I have regionally, having a business in Chicago is over time I have had more of my business into the state of Indiana more favorable to that. Also, I sit on the Chicago Sports Commission, is an executive member. And at the Indiana sports core in that, there are differences in economics when it comes to states that are open and available for conventions and events and states that are not. In fact, Indiana has been open for business in Indianapolis and has been able to accommodate conventions here in the near future that are leaving Chicago. The sports industry is different in that because of international involvement and national involvement, that conventions and sporting events that come together are still under scrutiny to move forward, even in open states willing to take those. Indianapolis is unfortunately the recipient of the NBA All-Star Game not being played in Indianapolis this year, even though the state is open. So we will look forward to seeing how events testing fans, our ability to, to be able to bring brand investment, marketing investment into the live event. Again mid to the Ended 21, that Clearing House will take time. But the advent of online gaming, the, the, the batting business in all the forms of media, digital social influencer will continue to rise. It will continue to place leaps and bounds of media dollars in marketing dollars from corporations throughout the world. Thanks for having me as part of this pan. I'm going to turn it over to fill and fill. You can take it from here. Thanks, John. So again, we got time for a couple of questions. If all my panel members have come to turn the camera back on, will come alive here. Got a couple of questions already. And here, again, we've only got about seven or eight minutes, so feel free to type in a question if you want to in the Q and a. But we'll start off with a couple that are already there. Micah, this first question is to you, by the way, congratulations on, on the greater region seen an inflow on the population side, your right. That is the biggest indicator of a region sort of entering sort of a takeoff TFA's economically. Which particular industries do you feel like this benefits? And how is this impacting, perhaps housing construction if we sit, especially for continuously this trend, continue. Thank you. Thank you for the question. We have to remember that. Population growth is finally positive. It's still really tiny. I mean, this record population growth in 2019 was just a 0.2% increase of population growth. So that's still really small, but the trend is good, right? And the trend continues, that's great. And I think ultimately if population continues to grow at this rate, it's probably going to be the industries that service citizens directly. So retail restaurants, entertainment that will benefit the most. And particularly if this is being caught by maybe migration out of Chicago and maybe we see household incomes rise as well. And while sitting here thinking about your question, I just went and looked. And actually surprisingly, new housing construction has declined every year since 2017, which is a bit kind of counter to what we're seeing with population growth. And maybe a little unexpected, but that might also explain why some of the housing markets in northeast Indiana at least prepare endemic were actually pretty hot markets. You know, if they're not building enough to anticipate the rising population. And we also haven't really seen a lot of multifamily dwellings being built. It's still kind of the traditional single home, family homes that we have here that are being built. So, you know, we might see that change in the next few years if population growth continues, continues to grow. Thank you. Might get a Srini we'll get some folks out there wondering about the retirement portfolio. You mentioned some of it, but what would what would be your top two or three takeaways? If I want to my better position, my retirement portfolio. If I sort of worried about it, I want to make sure it's, its, it's going to be safely, safely protected from any unexpected. Always fool's errand to make forecasts or recommendations, but be prepared for volatility that's clearly important. And then the other major thing I would recommend is just expand the asset classes in your portfolio. Just don't do large cap US stocks or treasury bonds. Tried to diversify into other asset classes as well. Real estate, for example, private equity, even emerging markets. Despite LA's sort of pessimism about them, I think, I think that having a little bit of exposure to emerging markets is important. Yeah, so more asset classes in your portfolio. That's a big, big important thing. And then, and then of course, you have to have a longer horizon. Circle. Micah, question for you. Back to regional development, mass transit. What's the impact of the south shore where he says that develop the south shore rail project on on the on the region urine. And what would you say about better mastery as a connection back to the Chicago, Chicago area? I think, and I think it's another kind of game changer because it is going to accelerate economic growth. Because it makes it that much easier for people to live here. I mean, I think I maybe getting the numbers wrong, but currently, you know, it's more than an hour to go from michigan city to downtown Chicago. I think it's closer to an hour and a half. And when this double tracking is done, where everything's done instead it'll be, you know, 45 minutes or less and that totally changes everything. I mean, you can now legitimately live in Michigan City, for example, and commute in Chicago in the same way that you would. Maybe one of the wealthier subdivisions like Nippur ville or Schonberg or something outside Chicago. So it opens up all of northeast Indiana as a potential place for people that you'll have higher paying jobs. If I higher-income potentially live here more easily than that connects not just Michigan C, but also down south to like dire, connects Munster better. And so I think it's going to accelerate this population growth. Now, depend on who you talk to you. You may not want necessarily that much of inflow of Chicagoans. But I think economically it's probably going to be a good thing that's gonna change what Northwest India looks like in the landscape you're ultimately, but I think probably for the better, even if it's maybe change is not always something we're comfortable with. Thanks, Mike. A jog question for you. What question comes through as you look at the next year, two years, and the impact of Cove it. Which sport, which sports industries do you see thriving better than others? And that's a good question. There's no, there's no doubt that these boards and gaming is head and shoulders above where, you know, other traditional sports are. And I know that sounds like How could that be? But to make sense, everybody's gone online. We have new generations that are coming up that exist online. So a lot of money and a lot of development going into, into EA Sports and gaming. And that will, that will definitely continue and continue to rise. But I also think a few others. Soccer, soccer has really come along and done quite well and continues to get great investment and figured out how to walk playing, compete early. And then golf, I think golf is was the earliest out of the gate because it became an activity that people could do. Specifically in the state of Indiana, the amount of people that came from Illinois to play golf, and then the interest in such a youth movement now I think it's reset a generation of interested kids move, both men and women were to go. Thank you, John. I want to I want to end with one One last question to Ellie and and Ryan about we expect new administration to be sworn in on January 20th. Where do you in the course, Trump, as the current president, has hitched, had made his changes in our relationship with the rest of the world, especially with regards to trade and other types of flows. Ellie, what would you expect on, well, what do you worry? And this'll be the last question. What do you, what do you, what's your expectation of, of any changes that we can it and expect in the United States relationship with the rest of all the terms of trade, capital, and perhaps labour flows at Riot. How would that translate the state-level? Give it our, we have one of the top ten most denigrated states with the global economy. How it starts off again. So no matter what administration, it just seems that free trade is not fashionable in US politics now. So in terms of of going towards more free trade, I don't think anything is going to change. Now. The biggest Stroke of luck in a trade war with the US and China has been the fact that there has been a lot of struggle to have a united front with you up and Asian ally against Beijing and their practices to counter the practices. So thats what could change with the, with the current administration. Maybe they will be more of a united front with European and Asian ally against the practices of China. There are deemed to be not very fair. Thanks, Ellie, right. Any, any thoughts on the state impact? Hubble thoughts? We make a lot of pharmaceutical inputs and we have a pretty significant trade balance with Ireland. And so given that the word changes with the administration and how we approach trade with Europe, potentially that could impact positively our trade with Ireland. And then in a completely different no Automotive, they are, they have said they have said that when we build a car, it goes back and forth between the United States in a different country Seven times prior to its completion. And as automotive continues to rebound from early losses in terms of jobs and output, mass transit has suffered in potentially might continue to suffer. So with respect to Indiana having a culture of manufacturing a significant footprint in the automotive industry. As automobiles continue to be popular and maybe can, may continue to be popular or from the future, although they might be electrified. Given that we have better trade arrangements with a variety of different supply chain partners in different countries. I could see that that the only outcome for that could be beneficial to the state of Indiana. Thank you, Ryan. Great questions. Thank you. Panelists. Again, the power of Indiana University, helping our business community, the lake, THE Crater Lake County area, save in the future. So hopefully everyone, this has been helpful. Dinner opportunity handed back to you. Thank you. I always learn so much at these. Think thoroughly so, so informative and just kinda reflecting on this whole presentation today, this, the effect of the pandemic. It's just astounding rate. I mean, just all the way across the board. So I am wondering if we can just fast-forward to the end of 2021 because it looks like things are gonna get better by then. He's done what everyone said. So fingers crossed. And I do appreciate some of the bright spots that that all of the panelists bred up today. Great stock tips. Thank you. Also thinking on maybe some real estate here in there. So I hope our audience is also gain some valuable takeaways for them. And kind of just in response to the pandemic and some of the devastating effects. We are working at IU Northwest on some small business assistance programming. So we had a meeting this week. We're putting some curricular together. We'll be launching that out probably first quarter, next year and hopefully we can get some help. Some, you know, throw some resources at some people and share some faculty expertise and help our community come back as well. So once again, thanks to all of our panelists, you always bring such wonderful information. Some years, little more optimistic than others, but I appreciate the upbeat and all of them. Wonderful moderator, Dr. Powell. And then I also want to recognize two people behind the scenes. Zip watt, who's the Kelly media specialists, who has been keeping all of us on track with technology today. And Jacob, CBO, WHO really pulls all this together from the planning stages all the way to execution. Also very grateful for all of our sponsors for helping to support the activities of the committees. So just really think all of you for coming. Thanks for sharing your questions. Stay safe, stay healthy. Hopefully next year we can meet in person and have a wonderful afternoon. Thanks again.

Panelists

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For more information, contact Ana Grandfield, Chairman Lake County Advancement Committee, at a_grandfield@msn.com or Barb Mahns, Dean's Secretary, at bmahns@iu.edu.

Indiana Business Outlook Panel: Schererville

Outlook 2021: Schererville

12 pm (CST) on Friday, November 13

Panelists

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Indiana Business Research Center social media channels