Emerging from the depths of 2020: Indiana's outlook for 2021.

• Author: Anderson, Kyle J.

Outlook

Forecasting, generally, is a challenging art even during times of relative normalcy. Within the context of an ongoing pandemic--where all or parts of various interrelated economies are halted and restarted --forecasting at this moment is unlike any in the past 100 years.

Overall, Indiana is relatively well positioned to outperform peer states and the U.S. as a whole during the recovery period when we emerge from the COVID-19 pandemic. Slack remains in the Hoosier labor force, providing an opportunity for growth as we move into 2021. We will expect to see slow or even negative growth conditions during the last quarter of 2020 and the first quarter of 2021, as we face new waves of infections. We do not believe total lockdowns will be necessary, as we have more knowledge about how to combat the virus now versus 10 months ago at the start of the pandemic. We expect buoyant, positive growth in the second half of 2021, setting the stage for 2022 as a strong year for positive economic output in Indiana.

Background

The year 2020 began in unassuming fashion, with a robust economic expansion across the U.S. and in Indiana. With a seemingly endless period of growth having lasted more than a decade, and with Indiana's manufacturing economy humming along nicely from the depths of 2009 through the peak of 2019, Indiana experienced the creation of more than 430,000 jobs--an average of over 43,000 jobs per year.

As we moved into March 2020, our systems of commerce were all-at-once damaged by the meteoric hit that was the COVID-19 pandemic. Along with every other place on planet Earth, Indiana has suffered loss of life, health, output and employment. We have also suffered discontinuous change in certain businesses, with threats to more businesses as we move toward 2021.

While the Great Recession unraveled slowly and painfully--like a severe drought--causing predictable accumulating damage over a period of several months, the COVID-19 pandemic struck like a tornado--without warning and with significant power.

Unfortunately, 2020 is on track to end in a fashion similar to how it began--with global fears of COVID-19-related numbers rising, threatening our economy with the prospect of shutdowns. Yet, there are some crucial differences between when the pandemic began and now.

* Scientists know more about the virus and how to approach treatment of patients, as biotech firms have been working for nearly a year on therapies and vaccines.

* When the first wave hit, we in the Northern Hemisphere had hopes that the virus would perish over the summer, similar to flu viruses. We now realize the coronavirus does not entirely...