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INDIANAPOLIS — Economists at IU said in a press release that they expect Indiana to remain “somewhat resilient” to supply-chain issues and other COVID-19 related challenges, but shortages in labor will remain a major issue for many businesses in 2022.

In a forecast released by the Kelley School of Business, the economy may average only about 300,000 added jobs each month, as opposed to the 450,000 per month average seen in the past year.

“This will be about two-thirds the rate during the past year, but it will be enough to put year-end employment above its pre-pandemic level,” said Bill Witte, author of the Kelley School’s U.S. forecast. “It reflects a severe decline in labor force participation. During the shutdown, the participation rate dropped 3.2 points — a very large change. During the first four months of the restart, it recovered close to half that, but in the 14 months since it has made no further progress. The labor market situation confounds the other supply-side problems. Building new capacity requires labor, both for construction and then eventually staffing.”

Indiana, which had about 60,000 workers leaving the labor force, will follow this trend. The labor growth will be close to 2 percent in 2022, with most gains being in services.

“We hope to see the workforce recover in Indiana by the end of 2022,” said Timothy Slaper, co-director of Kelley School’s Indiana Business Research Center. “Many factors will affect the recovery, including stimulus, supply-chain restoration, labor participation rates, and continued demand for goods and services.”

Employment growth over the next three years is projected to be 3 percent in Indianapolis.