Indiana’s manufacturing and logistics industries are growing, bolstered by a competitive business climate, booming productivity and strong foreign investment. These trends are paying off for Hoosiers in new jobs and rising wages in both industries.
These are the high points of the first annual “Indiana Manufacturing & Logistics Report Card” released May 5 by Conexus Indiana, the initiative focused on the state’s manufacturing and logistics economy. The report card also shows Indiana leading its neighboring states in key measures like productivity, capital investment per worker and business costs.
“Manufacturing and logistics make up more than a third of the state’s economy, but there’s a lack of information about the future of these industries,” said Joe Loughrey, president and chief operating officer of Cummins and chairman of Conexus. “We can’t allow public misconceptions and random headlines to drive our approach to these critical sectors, so we decided to create an annual report card that could provide Indiana citizens with the big picture by measuring our progress.”
The report card was created by the Ball State University Bureau of Business Research, with a team of economists and researchers led by Dr. Michael J. Hicks. Key findings from the report card show:
· Manufacturing is growing, in Indiana and nationally.
- 2007 was a record year for U.S. manufacturing in terms of industrial output.
- Indiana’s manufacturing sector has grown accordingly, producing more than $249 billion worth of goods in 2005 (the latest available data).
- The top 25 Indiana manufacturing companies have consistently outperformed the Dow Jones Industrial Average over the last 2.5 years.
- Hoosier manufacturers lead our neighboring states in capital investment per worker and industrial R&D, as they innovate and maintain a competitive edge in the global economy.
· Indiana’s manufacturing employment is stabilizing, and job growth is expected in logistics.
- The U.S. has lost manufacturing jobs (nearly 6 million positions since the late 1970s) primarily as a result of productivity gains and technological advances.
- Positions once considered manufacturing jobs, were not lost, they were shifted from production facilities to service firms, specializing in these areas, such as marketing, financing, customer relations, etc.
- But Indiana’s manufacturing employment has been more stable than the nation as a whole, and is now steady and projected to slightly over the next two years.
- The logistics sector is adding jobs at a faster pace as industrial output and freight volume grow.
· Hoosier manufacturing workers are the most productive in the region, and are well-paid for their efforts.
- In value added per worker (the most common measure of productivity), Indiana ranks first among neighboring states and well above the national average.
- Correspondingly, average wages in both manufacturing and logistics have seen significant increases since 2000, with continued growth likely.
· Indiana is winning globalization, attracting significant foreign investment in manufacturing.
- Indiana ranks second in the region overall and first as adjusted for total economic size in foreign direct investment.
- More than 90,000 (Chris can you see what % this is of the manufacturing workforce – would be a powerful number) Indiana manufacturing workers are employed by international firms, and the state has attracted foreign manufacturing investment from every major region of the globe.
· Indiana also boasts the best business climate in the region for future manufacturing and logistics growth.
- Indiana ranks first in the region in overall business costs, based on a composite index that includes healthcare and insurance costs, worker’s compensation, tax burden and other factors.
“Our findings show a manufacturing sector that has evolved – becoming more high-tech, more productive. This has caused some job displacement, but also higher pay,” said Hicks, the director of the Ball State Bureau of Business Research. “Manufacturing and logistics continue to provide a stable foundation for the state’s economy, and we see new jobs and continued growth ahead.”
While much of the news in the report card is positive, the analysis does sound a cautionary note on workforce issues. Indiana ranks ahead of its neighboring states in percentage of workers with associate’s degrees, but educational attainment across the region “has been tepid,” according to the report.
“We’re focused on making sure we prepare Hoosiers to take advantage of the great careers opportunities in manufacturing and logistics,” said Conexus Indiana president and chief executive officer Carol D’Amico. “The findings of the report card reflect our own conversations with employers – we need to get more qualified workers in the pipeline for these companies, and make sure the right education and training programs are available for them. Conexus has set a goal of increasing enrollments in these programs by 55 percent in five years to help meet projected demands.”
The full 2008 Indiana Manufacturing & Logistics Report Card is available at http://www.bsu.edu/cob/bbr/.
Launched by the Central Indiana Corporate Partnership, Conexus Indiana is the state’s advanced manufacturing and logistics initiative, dedicated to making Indiana a global leader in these high-growth, high-tech industries.
