Terre Haute forecast 2011.

• Author: Christ, Kevin

Although on a national basis the recession of 2007-2009 officially ended in June 2009, when one considers the dynamics of the labor market, the effects of the recession still weigh heavily on the local Terre Haute economy. While the unemployment rate did fall slightly between July 2009 and February of this year (on a seasonally adjusted basis), since February it has been trending upward again leaving it well above national and state levels (see Figure 1).

[FIGURE 1 OMITTED]

The reason for the temporary decline in the unemployment rate had more to do with seasonal factors than any real upturn. In fact, more people left the labor force while the actual number of unemployed stayed at a high level (see Figure 2). Thus, despite winning the Indiana Chamber of Commerce Community of the Year award for 2010, and despite completion of the much-anticipated Union Hospital expansion, the engines of growth remain mostly idle.

[FIGURE 2 OMITTED]

Even so, if one looks carefully enough, there are signs that the outlook may be improving for some. In addition to the aforementioned expansion at Union Hospital, Indiana State University (ISU) and Rose-Hulman Institute of Technology welcomed larger-than-anticipated freshman classes, and there are some indications that ISU's enrollments may continue to grow in the coming years. Thus, the educational and health services sector of the local economy appear to be in good shape.

A second bright spot is Terre Haute's downtown area, where a revitalization that began with the opening of the new Hilton Garden Inn in 2007 and Candlewood Suites in 2008 continues. September saw the long-awaited opening of the new Terre Haute Children's Museum, while three blocks away construction is well underway on a large new bookstore on the edge of the ISU campus. Such additions to the downtown area, along with new restaurant openings, are increasing business activity in the downtown area.

On the manufacturing front, ThyssenKrupp Presta is expanding, partly because of the closure of less productive facilities elsewhere and partly because Ford has contracted with the company to produce steering systems for all new Fords. Similarly, the cyclical businesses at Great Dane (truck trailers), ADVICS (formerly Aisin Brake) and Sony DADC (DVDs and BluRay DVDs) are seeing typical post-recession increases in production and hiring.

Reorganizations and contractions are also ongoing in Vigo County. Indiana State University reduced its faculty and...