While the manufacturing and logistics industries in most Midwest states have lost ground over the last 20 years, a new report shows Indiana’s have grown in a big way. The study from the Ball State University Center for Business and Economic Research and Conexus Indiana shows the industries have grown by 41 percent in the state since 1997, outpacing Wisconsin’s 4 percent growth and losses in Illinois, Michigan and Ohio. Since the end of the Great Recession, more than half the growth of Indiana’s Gross Domestic Product has been connected to making or moving products.
CBER Director Mike Hicks believes the growth could continue. "I think the only thing that is standing between Indiana and continued high-volume, high-value growth is available workers," Hicks says "and that’s a problem that is oftentimes repeated by the industry and has been for a long time."
He adds the negative "folklore" surrounding the condition of manufacturing and logistics doesn’t apply to Indiana. Hicks says "2015 was a record manufacturing production year in inflation-adjusted dollars. While 2016 fell just short with some weakness in the first and second quarter, 2017 looks to be a new record year" in the state.
The report says manufacturing employment peaked in 1979 and has since lost 7.5 million manufacturing jobs. However, using the broadest measure for logistics jobs — including trade, transportation and utilities — more than 9 million logistics jobs have been added in the 38-year period. Hicks says "most of the confusion about manufacturing and logistics is due to declining employment over the past generation,” Hicks said. “The fact is, manufacturing firms have become very lean, and productivity growth means more goods produced with fewer workers." He adds "trade and productivity growth shifts job opportunities to other places and other sectors even as employment grows,” Hicks said. “We are at peak U.S. employment right now."