Indiana State University Newsroom

Indiana State economist: Recovery will continue ‘slow slog’ in 2012

February 2, 2012

The economy will continue a "slow slog" during its recovery this year, an Indiana State University economist forecasted Thursday.

Robert Guell was one of four speakers providing insight and predictions on various aspects of the economy at the Groundhog Day Economic Forecast breakfast at ISU. Gerry Dick, an ISU graduate and president and managing editor of Grow Indiana Media Ventures, along with Brian F. Conley of Conley Real Estate Appraisals in Terre Haute and Doug Esamann, president of Duke Energy Indiana, also provided perspective at the event sponsored by the Terre Haute Chamber of Commerce. Indiana State's Scott College of Business and Terre Haute Savings Bank co-sponsored the event.

Guell opened his presentation by comparing the economic recovery to the medical recovery of Indianapolis Colts quarterback Peyton Manning, who missed the entire 2011 season and whose future is still in question as he recovers from an injury.

"The overall economy in 2012, I think, is going to be like Peyton Manning's right arm," Guell told the audience. "Everything looks like it should work, but there's just no velocity there."

The nation's gross domestic product in the third quarter of 2007 was an adjusted $13.3 trillion; in the fourth quarter of last year, the GDP finally reached an adjusted $13.4 trillion, Guell explained.

"It has taken us five full years to drag our butts out of the recession," he added. "The recovery has been the longest in getting us back to the previous peak since the Great Depression."

He predicted there would be "nearly no chance of a good year economically," which he defined as 3.5 percent of growth in the GDP. He predicted that 2 to 2.5 percent of growth in GDP was the more likely scenario, though he warned "that could be tripped up by the euro or European debt crisis."

The state's economy starts 2012 "holding its own," Gerry Dick told the audience that consisted of businesspeople from throughout the Wabash Valley.

Indiana is "certainly doing better than a number of other states, I think, from an economic development standpoint in how we're positioned to do things going forward," he added, noting there was a "change in optimism" on the economy.

He cited a poll with the Indiana Business Council and Walker Information that indicates that optimistic outlooks on the economy have recently been increasing.

Demand for electricity "took a hit" during the recession, though it has since been on the rebound, said Esamann, who gave the keynote presentation. He provided examples as reasoning for "at least guarded optimism for 2012 and beyond."

During his presentation, he explained increased energy consumption in a variety of industries.

"Each of us can choose which news to focus on," Esamann told the audience. "We need a proper mix of realism and optimism to address these challenges" facing the economy.

The Groundhog Day Economic Forecast is in its 16th year, and has featured Guell as a speaker since 2001. He again drew on his analogy to Peyton Manning while describing his prediction for last year, which he said Thursday was "too rosy." He made the comparisons just three days before Indianapolis hosts the Super Bowl in the stadium where the Colts play their home football games.

"Like many of us were hoping that Peyton Manning would be playing in the Super Bowl this weekend," Guell said to open his presentation, "I missed it by that much."

Guell has sometimes been referred to as "Dr. Doom" for his outlooks in the past economic forecast events. Nancy Merritt, dean of ISU's Scott College of Business and moderator of the Groundhog Day breakfast, asked him before his presentation if his forecast was "doomy, gloomy or fair-to-partly this year?"

"I'd say fair-to-partly," he replied.

Photo: (ISU/Tony Campbell)
Indiana State University economics professor Robert Guell speaks at the podium as Nancy Merritt, dean of the Scott College of Business at ISU, looks on. Guell was one of the speakers at the Groundhog Day Economic Forecast at ISU on Thursday.

Photo: (ISU/Tony Campbell)
Gerry Dick, an Indiana State University graduate and president and managing editor of Grow Indiana Media Ventures, speaks during the Groundhog Day Economic Forecast.

Writer and Media Contact: Austin Arceo, assistant director of media relations, Office of Communications and Marketing, Indiana State University, 812-237-3790 or