Indianamanufacturing is growing at a modest pace, having slowed after a post-recession recovery, while exports rebound, according to the State Monitor report released today by BMO Capital Markets Economics.

Exports continue to perform well, up 11 percent year-over-year in the third quarter. Transportation equipment exports have grown in the past year. However, flooding inThailandhas again disrupted the auto sector supply chain, and Toyota temporarily suspended production inIndianain late October.

"Our business customers continue to express optimism in the strength and resiliency ofIndiana's economy," saidTim Massey, Indiana Regional President, M&I, a part of BMO Financial Group. "We stand ready to assist as businesses look to invest in upgrading their businesses and retool for future growth."

Nonfarm payrolls were 0.4 percent below year-ago levels in the third quarter, underperforming the national average. Manufacturing employment has seen modest growth in the past year, while trade and transportation have been weak. Despite recent job losses, the unemployment rate remains slightly below the national average at 8.9 percent.

"The employment picture has faltered after a brief post-recession recovery," saidRobert Kavcic, Economist, BMO Capital Markets. "State and local governments have shed jobs amid an unfavourable budget situation. State revenues, however, have bounced back smartly in recent quarters, led by personal income and state tax receipts, so that should stem the losses."

The housing market remains soft, with sales and prices both below year-ago levels, though prices have fallen a relatively modest 6.2 percent from peak levels. On the commercial side, the industrial availability rate inIndianapoliswas a relatively low 10.9 percent in the second quarter of 2011, but office vacancy rate was a still high 21.8 percent.