Inflation is still a factor, but hope is on the horizon for Indiana’s economy

January 12 – SOUTHINDIANA – It’s no secret that prices have been rising across Indiana.

Royal Couture Treats owner Minniequa Johnson feels the effects every time she buys eggs for her bakery, which she often does.

“Inflation will affect our business until the economy can essentially meet demand. Even now, with all the egg jokes on Facebook, it’s no joke because we’re trying to deal with it,” Johnson said. “I use an average of six eggs per batch. I’m even thinking about possibly increasing some of my prices to possibly cover the price of eggs.”

Johnson is preparing for the grand reopening of her New Albany bakery.

“I notice how our consumers are spending,” Johnson said. “You become much more careful. At the moment we all live from day to day. The last thing we need is to treat ourselves to a cupcake or two and a tire blows out.”

The past year hasn’t been the easiest for Hoosiers economically, but the outlook for 2023 is encouraging for financial experts.

So is Johnson. She said there are some positive aspects she has noticed about the current economic situation.

“Wages have gone up, people see that it’s kind of offsetting,” Johnson said. “(They think) they got a raise and can now indulge in simple pleasures like a gourmet cupcake. There are positive aspects.”

She is proactive in fighting inflation and said she will soon be offering appetizers for catering and her company will soon be certified to accept SNAP and EBT benefits.

Though there are signs of an imminent economic recession, Indiana University Southeast Sanders Chair in Business Uric Dufrene said it probably won’t be as bad as 2008.

“One of those positive things, I think, is that if there’s a recession … you’re not going to see the significant layoffs that we saw in the Great Recession,” Dufrene said.

Dufrene said it was likely the unemployment rate could rise but there would be no major spikes in unemployment.

“I daresay the unemployment rate would not exceed 5 percent,” he said.

There are still more vacancies than workers, which Dufrene says means there likely won’t be mass layoffs even if the economy hits a recession.

“At a time when we may see slower growth, employers will be more reluctant to make large-scale layoffs because of the problem of attracting talent,” he said.

Employers looking to hire staff will have to consider more than just salary in 2023, Dufrene said.

“You have to look at attracting and retaining employees in a holistic way,” Dufrene said. “It doesn’t always depend on the salary or the hourly wage.”

He said opportunities to move up a company or offer better benefits would attract employees on top of raw wages.

“Employers need to think about avenues that will allow you to get an entry-level job, professional or technical, and how to advance in the organization,” he said.

Staffing issues are something the owners of New Albany’s Leaven Bakery and Bistro are also experiencing.

“We can’t find employees. We’ve had a bread baker job for three months and we’ve hired a few people who unfortunately only lasted three or four days, we’re a small business – we can only offer a certain amount per hour,” said owner Kimberly Maxey. “We can’t compete with Amazon’s (wages).”

Lack of staff also causes the bakery to turn down wholesale accounts or restaurants that want to use their bread for meals.

“There’s always something going on in New Albany or Louisville,” she said. “They need bread as certain restaurants are closing, the demand for desserts and bread is still there and it’s like people have gone.”

One thing the bakery has stood firm is customers who are happy to support even if they have to raise the prices. Maxey said she’s grateful and appreciates everyone who stops by.

“So the inflation that we’re seeing is mostly food costs, egg prices and meat prices, which have almost quadrupled since we opened 20 months ago,” she said. “We had to raise prices, we expected a lot of people to push back. In return, people have really been as we understand it, and we’re just glad you’re open.”

Maxey said the menu was cheap enough that people could afford to enjoy the food and despite the economy’s struggles, there were positives to the situation.

“Inflation has definitely hurt our bank account, but it has really opened our eyes to how much the community has opened up to us,” Maxey said.

Indiana Chamber of Commerce President and CEO Kevin Brinegar said the state is investing a large amount of money in its workforce.

He said companies are telling the chamber they either can’t find enough workers or they can’t find the workers with the skills they need to fill vacancies.

Brinegar said that people with college degrees or high school diplomas are primarily active in the Indiana workforce.

However, about 60% of Indiana’s non-high school graduates don’t work.

“This is an opportunity to focus on training these people and improving their skills,” Brinegar said. “Because if we do that, they’re a lot more likely to be in the workforce and help fill the open positions in Indiana. We have twice as many vacancies as job seekers.”

Inflation also plays a big role in the struggles for entrepreneurs.

“The other thing that has actually eclipsed labor shortages in some sectors and for some employers is inflation,” Brinegar said. “When we talk about Indiana’s economic outlook, a lot of it depends on inflation rates.”

This year and next, companies will have to wait for inflation to slow down.

“I can tell you it’s a big concern for companies of all kinds, the ones that make finished goods, they’re struggling and they have to raise prices to cover inputs,” Brinegar said. “As you go back down the supply chain, these people experience fuel or labor costs. They want or raise their prices for components that go into a car, that just creates pressure.”

The Indiana Chamber of Commerce is available to help companies address these issues. Brinegar said the hope is that the state can better prepare youth for the workforce before they get there.

If companies cannot find the employees and have to train internally, the chamber can help.

“One of the really most important resources that we make available to any recruiter is a resource that we just launched in August called Talent Resource Navigation,” said Brinegar. “And there are over 600 workout programs, and you can search by geographic area.”

Brinegar said people can take advantage of these trainings even if they are not chamber members. Interested parties can go to Indianachamber.com.

There is some hope on the horizon for the state’s economy.

“The encouragement is that inflation data over the past few months has shown that inflation rates are falling,” Brinegar said. “While they’re still high by historical standards, there’s some light at the end of the tunnel sooner rather than later.”

Source