Cloudy crystal ball: Indiana's challenges and advantages in 2009.

• Author: Conover, Jerry
• Position: VIEWPOINT

PREDICTING THE COURSE of Indiana's economy over the year ahead is no easy matter.

Key forces that will shape our economic fate in 2009 are yet to be defined clearly. The incoming Obama administration and the Congress have spoken in broad terms about strategies to stimulate economic growth, bur the crucial details have not yet emerged. There is much hope in communities and states throughout the country that major federal investments in infrastructure will bring long overdue improvements to roads and bridges, schools, sewer systems, and other infrastructure needs while creating jobs close to home. Indiana certainly has its share of needs in these areas that a federal infusion could ease.

Similarly, federal spending to support "the jobs of tomorrow" in fields such as renewable energy production and more energy-efficient power systems would be welcome in Indiana, where major growth has occurred recently in these areas. And the prospect of increased federal funding for research programs at the nation's universities has them eagerly contemplating expanded efforts to create the innovations of tomorrow. Bur again, what shape federal rescue efforts will take is far from clear as the new year begins.

How is Indiana likely to fare in these uncertain rimes? Our economy remains strongly based on manufacturing, as it has for generations, though our dependence on this sector is shrinking as others grow. Manufacturing has been hit hard by the current recession, causing acute pains in Indiana's factory towns. There's likely to be significant shrinkage in certain manufacturing industries, those whose products...