IU: state economy will shrink; Indy in recession

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Cooling global markets and the rising strength of the dollar will weaken Indiana exports and ultimately hurt the state’s economy next year, a panel of Indiana University economists said this morning.

Employment will fall through most of 2009 and leave the state with 10,000 to 15,000 fewer jobs than in 2008, said the economists, who unveiled their annual forecast to a downtown gathering.

Indianapolis went into recession in the first quarter this year, they added, predicting that the local market will shrink from 0.5 percent to 1 percent.

However, the economists emphasized that the outlook for the state is not bleak. Some industries are hiring, and growth will materialize from the state’s aggressive search for economic development, they said.

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