Conexus Indiana and the Ball State Center for Business and Economic Research today (June 10) released the 2011 Indiana Manufacturing and Logistics Report Card, an annual grading of the strengths, challenges and opportunities impacting the two industries that collectively employ nearly one of every four Hoosiers.
According to a press release, this year’s Report Card confirms that Indiana’s strengths in making and moving products have buoyed the state’s economic recovery. Indiana continues to rank among the top tier of states in manufacturing and logistics employment, and Ball State economists predict that the next 12 months will be a record year for manufacturing in the state. Indiana’s manufacturing employment has risen by 4.6% since the end of the recession.
The study gives Indiana overall “A” grades in manufacturing industry (ranking first among states in share of the economy focused on manufacturing), logistics industry, global position (measuring manufacturing exports and foreign investment) and tax climate. The educational attainment of the Hoosier workforce, however, continues to be a long-term concern.
The state’s “C” grade in Human Capital is a step forward from last year’s C-, based on strong enrollment in community college programs and improved high school graduation rates. But Indiana’s adult population continues to rank among the least-educated in the nation, leaving Hoosier manufacturing and logistics firms struggling to find qualified applicants for jobs that demand increasingly advanced skills.
This year’s study reiterates that Indiana must do a better preparing the next generation of manufacturing and logistics workers, said Steve Dwyer, Conexus Indiana’s president and CEO, noting “today’s jobs aren’t about standing at assembly lines, they’re about running computerized equipment and robotic systems, about teamwork and problem-solving.”
He added, “We have to give introduce young Hoosiers to these careers early on, and give them opportunities to acquire the skills they need at all levels to create the pipeline of talent that manufacturing and logistics employers need to grow.”
Other key findings from the 2011 Indiana Manufacturing and Logistics Report Card:
• Indiana ranks second among states in per capita manufacturing employment and ninth in logistics employment.
• Indiana ranks first in per capita income derived from foreign-owned manufacturing operations, ninth in manufacturing exports per capita and 13th in export growth.
• Indiana scored a “C” in benefit costs, based on poor rankings in healthcare and fringe benefit costs.
• Indiana generally ranks in the top tier of states in terms of tax rates and the recently-enacted corporate income tax cut should bolster the state’s current ranking of 21st in corporate taxes.
• The state’s “C” grade in productivity and innovation represents a mixed-bag of indicators, with strong rankings in manufacturing productivity (ninth) and R&D investment (15th) offset by poor performance in patents-per-capita (32nd);
• With rankings of 31st in percentage of the workforce with a high school diploma or greater, 42nd in college-educated workers, and 26th in younger workers with a two-year degree, human capital remains Indiana’s biggest long-term hurdle to future manufacturing and logistics growth.
Elkhart County’s unemployment rate fell in June, according to figures released Friday (July 17) from the Indiana Department of Workforce Development.
Elkhart County’s rate dropped from 17.5% in May to 16.8% in June.
The city of Elkhart’s unemployment rate also dropped, from 19.2% in May to 18.7% in June.
The drop in Elkhart’s unemployment rate could mean a couple of things. One possibility is that the labor force is shrinking. Some people have found work in areas such as farming or simply retired, said Michael Hicks, director of the center for business and economic research at Ball State University.
Another possibility is that workers are finding work with smaller businesses. Hicks said small firms — those with maybe 30 to 50 workers — are playing a larger role in manufacturing. Elkhart has gotten a lot of national attention lately, Hicks said, and its manufacturing history holds a lot of appeal to companies looking to set up shop in the Midwest.
Scott Tapley, vice president/portfolio manager with 1st Source Bank, said he couldn’t comment about new, smaller businesses coming to town. But he wouldn’t be surprised if they started to spring up.
Tapley said Elkhart is an entrepreneurial area full of creative thinkers. And the creation of small businesses helps end recessions, he said.
Elkhart County has posted unemployment figures in the double digits for 10 months. Hicks said the fallout from such figures can be hard on a community. Social service agencies see a lot of stress as contributions are down and needs rise, he said.
Hicks also said there’s a risk of “brain drain” with a prolonged recession. As young people graduate college they may be less apt to want to return to a community with a high unemployment rate.
But he said it’s doubtful Elkhart will push too many people away. Elkhart may have been one of the first areas to head into the recession, he said, but only by a few months.
He said it’s also too soon to tell whether the stimulus package is doing anything to boost the economy. He said it would take at least six months from when the package was passed at the end of February to see any impact.
“Anybody that thought that this was going to have an effect in less than six months other than on the confidence that the economy would eventually recover was living in Neverland,” Hicks said.