Indiana Economic Overview
Indiana is considered primarily a manufacturing state, although approximately three quarters of its land is used for agriculture. The state’s chief industries are manufacturing, services, agriculture, government, wholesale and retail trade, transportation, and public utilities. Much of Indiana’s heavy manufacturing, such as for steel and industrial machinery, requires highly skilled labor, and companies are often willing to relocate to where these skills already exist. In addition, Indiana’s labor force mostly lives in small- to medium-sized cities, rather than in large metropolises. This allows firms to obtain workers in Indiana with higher than average skills at a lower than average wage.
Around 1890, Indiana’s industrial growth transformed the state from one based on agriculture to one that was manufacturing-based. In 1906, the United States Steel Corporation opened mills in Indiana, and a century later, the area is the largest steel-producing center in the U.S., having surpassed Pennsylvania.
After World War II, the state’s prosperity continued, with small farms merging into larger, more efficient ones. The countrywide slowdown during the 1980s recession led to a 12 percent unemployment rate in Indiana, one of the highest rates in the U.S., but by the 1990s, the economy started to improve, with the pharmaceutical, agricultural, and chemical industries undergoing major expansions. After the turn of the 21st century, Indiana’s annual gross state product (GSP) was averaging more than $200 billion. Manufacturing represents about 27 percent of the GSP.
Indiana has more than 63,000 farms covering 15.4 million acres of farmland in the area known as America’s Corn Belt. The state is ranked ninth in terms of crop sales, with an average of almost $4 billion annually. The main crops grown in Indiana, corn and soybeans, are also used in the production of biofuels. Indiana’s aquaculture industry is not as established as the agriculture industry, earning some $3 million a year. Livestock—mainly cattle, hogs, chickens, and sheep—consistently results in sales of $1.7 billion to $2 billion per year for the state.
BANKING AND FINANCE
Indiana boasts more than 1,000 national commercial banks, more than 1,000 state commercial banks, and more than 250 savings institutions. More than 54,700 employees work in the credit intermediation sector of the industry, with a payroll of more than $2.1 billion annually. In the nondepository credit intermediation sector, more than 7,800 workers are employed, with an annual payroll of more than $537 million. This sector has revenues of more than $4.2 billion.
Some 40 telephone companies do business in the state, providing service to around 93 percent of all households. The three largest companies are AT&T, with an almost 60 percent share (over 1,785,000 access lines); Verizon, with a 28 percent share (almost 900,000 lines); and Embarq, with an 8 percent share (around 256,000 lines). Smaller companies are telephone cooperatives wholly owned by their subscribers, family-owned companies, or firms such as TDS Telecom and CenturyTel. The state had 20 AM radio stations, 123 FM radio stations, and 30 television stations as of 2003.
Construction contributes more than $23 billion annually to Indiana’s gross state product of some $210 billion. Approximately 148,200 workers are employed by more than 15,500 construction companies at an annual payroll of more than $5.2 billion. Construction of buildings accounts for more than $10.4 billion, while heavy and civil engineering construction accounts for more than $3.1 billion. Specialty trade contractors, such as framing, masonry, glass, and roofing, account for more than $9.7 billion.
There are over 80 colleges and universities in Indiana, and residents of the state who qualify are eligible for a variety of state grants. One of the top research institutions in the state is Purdue University; the University of Notre Dame, Indiana State University, and the University of Southern Indiana are also well known. Altogether, the public educational sector has 876 schools, with over 6,467 employees earning a total payroll of more than $106 million. The schools bring in over $340 million in revenues, with business/computer schools accounting for $64 million, technical and trade schools accounting for $91 million, and fine arts schools accounting for $28.9 million. Educational support services account for $71 million of state revenues.
Indiana is strongly in favor of using biofuels to reduce America’s dependence on foreign oil, ensure cleaner air, and provide more jobs for state workers. In one year, Indiana saw its ethanol plants increase from one to 12. The state also recently opened four new biodiesel plants. Altogether, these plants generate $29.5 million in revenue for Indiana’s farmers. Biofuels plants have surpassed their one billion gallon goal and are revitalizing rural communities. Indiana ranks first in the U.S. in biodiesel blending, and the state has more than 55 retail biodiesel pumps. In addition, the state has six hydroelectric dams, which provide electrical power to local citizens, and has installed wind turbines that generate 130 MW of electricity.
Indiana prides itself on its media-friendly atmosphere, with tax incentives offered to companies that film in the state, whether for major motion pictures, low-budget films, or commercials. To further encourage the production industry, Film Indiana assists with location scouting and street closings. Grants are given by the Indiana Arts Commission for qualifying artists to reach their goals. The motion picture and video industry employ more than 3,400 workers, with an annual payroll of $43 million. Motion picture theaters earn annual revenues of more than $195 million, and employ more than 2,800 workers at a total annual payroll of $21 million.
There are approximately 3,900 insurance establishments in Indiana with more than 45,300 employees and a total payroll of more than $2.1 billion. The insurance agencies and brokerages account for 3,022 of these establishments, and have a combined income of more than $1.4 billion. Their combined 13,212 employees earn a total income of more than $507 million. Other insurance-related activities, such as claims adjusting and pension funds, bring in more than $343 million and employ more than 4,000 workers earning a combined annual income of over $165 million.
Indiana is home to many manufacturing plants, from automobile production to pharmaceuticals. Some of the internationally known companies that have operations in Indiana are Eli Lilly and Company, Toyota, Honda, Pfizer, and Rolls Royce. The chief manufactured goods are primary metals, transportation equipment, motor vehicles, industrial machinery, and electronics. Indiana ranks fifth among all U.S. states in total sales and shipments of pharmaceuticals and second in the number of biopharmaceutical-related jobs. Manufacturing accounts for $51.6 billion of Indiana’s $210 billion GSP and 435,300 jobs.
MINING AND EXTRACTION
Indiana is known for the decorative limestone that covers the face of the Pentagon. After the September 11, 2001, terrorist attack on the building, special efforts were made by Indiana’s mining industry to replace the damaged walls with the closest they could find to the original facing. Coal mines in the southern portion of the state provide raw materials for 24 plants and contribute approximately 75 percent of Indiana’s mining income. Other quarried products are crushed stone, sand, and gravel. The 345 mining establishments in Indiana employ a total of 5,794 workers at an annual payroll of more than $274 million, resulting in revenues of more than $1.3 billion.
Approximately 60,000 nonprofit organizations operate in Indiana in support of human rights, environmental protection, health promotion, and youth development. Employing a total of 222,000 paid workers (about 8 percent of the state’s workforce) earning an annual payroll of $6 billion, these nonprofits are able to raise more than $2.7 billion yearly. Although half of the Indiana nonprofit organizations report annual revenues of less than $40,000, 14 percent of health nonprofits and 15 percent of education nonprofits have revenues of $10 million or more. In addition, 37 percent of the health nonprofits have assets of more than $1 million.
The nonprofit organizations in Indiana are called upon to address numerous community needs across the state. Most (81 percent) of the organizations provide services through one location, and 55 percent provide all their services at no cost to their clients. Almost three-quarters of the nonprofits rely on volunteers, and over half have paid staff.
The retail industry in Indiana employs approximately 343,500 workers at an annual payroll of $6 billion, and results in revenues of more than $67 billion. Motor vehicles and parts dealers sell approximately $17.3 billion worth of goods, while food and beverage establishments account for $7.5 billion. Electronics and appliance stores bring in $1.6 billion and furniture sales accounts for $1.5 billion. Gasoline stations in Indiana have total revenues of $7 billion; health and personal care stores, $3.9 billion; and clothing stores, $2.7 billion. The share of general merchandise stores in the state’s retail income is more than $11.7 billion.
Indiana is fast shedding its former reputation as a low-tech state. Its technology community now consists of publicly traded companies, private businesses, colleges and research universities, and local economic development organizations. Home to information technology–related corporations and enterprises, Indiana has benefited from more than $1 billion in new wealth and reinvestment from the technology sector over the past decade. The Rose-Hulman Institute of Technology, Purdue’s Discovery Park, and Indiana University’s School of Informatics are some of the top research and technology institutions in Indiana. There are more than 68,000 high-tech workers employed in Indiana in more than 5,000 establishments, with an average salary of $55,700. One of the largest supercomputers in the world, dubbed "Big Red," is located at Indiana University.
Indiana is called "the Crossroads of America" due to its having more intersecting interstate highways than any other state. Each year, more than 1.1 billion tons of freight are transported on the roads and highways of Indiana, making it the fifth busiest state for commercial freight traffic. In addition, it has three international airports, a heavily used railway system with more than 4,700 miles of track, and three modern ports on the Ohio River and Lake Michigan. Ships can sail from Indiana to the Atlantic Ocean or to the Gulf of Mexico. Indiana has 250,000 logistics professionals employed in the state, and the second largest Federal Express hub in the world operates out of the Indianapolis International Airport.
TRAVEL AND TOURISM
Indiana is famous for hosting the Indianapolis 500 motor race. This auto race is held over Memorial Day weekend and attracts more than 250,000 spectators annually, making it the largest one-day sporting event in the world. Approximately 5,000 bicycle enthusiasts take part in the Hilly Hundred, a bicycle tour that runs through three Indiana counties. Indiana’s museums, historical sites, and zoos account for $123 million in annual revenue and provide jobs for more than 2,000 employees, who earn a total payroll of $43 million. In addition, amusement parks and arcades bring in more than $57 million and employ 751 workers with a combined $13 million payroll.
Indiana’s fifth largest employer is its gambling industry, which is mostly concentrated in riverboat casinos. The 12 Indiana casinos have contributed over $1.2 billion from the state wagering tax to the Build Indiana Fund, supporting road and bridge repair and other community projects. The casino industry has created more than 16,000 jobs, with annual wages and benefits totaling more than $500 million. Aside from its donations to local communities, the industry gives $33 million of casino wagering tax revenue to nongaming counties, cities, and towns.
-World Trade Press