South Bend/Elkhart area economic index declines for second straight quarter • Northwest Indiana Business Magazine
Economy general

South Bend/Elkhart area economic index declines for second straight quarter

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Economy generalThe third quarter 2018 Michiana Benchmark Business Index, compiled by the certified public accounting and consulting firm of Kruggel Lawton CPAs in South Bend, declined for the second straight quarter.

The third quarter index was 55.59 out of 100, down more than 6 percent from the second quarter of 2018. The second quarter index was 59.38.

While the latest index showed an overall decline, Terry Bush, a director at Kruggel Lawton CPAs said chief financial officers from the South Bend/Elkhart area who took the survey do not appear concerned about the economic outlook for their companies.  

“On a more positive – or at least neutral – note, the CFO outlook metric stayed relatively flat,” Bush said.

In August, Bush said the index had increased for four consecutive quarters, so a decline may be an indication the “regional economy may be catching its breath.”

“This may reflect a degree of caution creeping in after several years of strong economic activity,” Bush said in August. “A second straight quarterly decrease in CFO optimism catches our attention, and it’s a metric worth monitoring, since CFOs have a unique vantage point on the business outlook for their companies.”

Kruggel Lawton has conducted the confidential survey of CFOs in for-profit companies in the South Bend/Elkhart region on a quarterly basis the past eight years. The survey tracks changes in companies’ revenue, profitability, and employment levels compared to the same quarter of the prior year, along with CFOs’ perception of the business outlook for their companies.

Participating CFOs’ input on the four metrics is combined into the overall benchmark business index to provide a barometer of the Michiana-area business climate, according to Kruggel Lawton CPAs.

Other survey results include:

  • Of the four metrics that comprise the index, the profitability metric decreased the most, down 17 percent;
  • The revenue and employment/headcount metrics dropped 5 percent and 4 percent from the second quarter respectively;
  • CFO outlook remained flat, declining by less than 1 percent.

“The marked decline in profitability could be attributable to higher wages and overtime, increased raw material or supply costs, or other factors,” Bush said. 


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