July 31, 2019

Indiana continues to be a robust manufacturing state, and it is the only one to lead the nation in terms of employment and the global reach of its goods, says a new report from Ball State University.

The 2019 Manufacturing Scorecard from Ball State’s Center for Business and Economic Research (CBER) also found that the Indiana is also a strong logistics state, reflecting the geographic placement of the state and the demand for transportation of goods into and out of the state.

“The strong relative performance of Indiana’s manufacturing sector is good news as the national manufacturing picture in 2019 has turned negative with the sector experiencing two quarters of decline,” said CBER director Michael Hicks. “The Midwest is manufacturing and logistics dependent, and continues to lead in productivity and innovation. However, as the world’s manufacturing outlook cools, there is growing risk to our region.”

Each year, CBER analyzes how each state ranks among its peers in several areas of the economy that underlie the success of manufacturing and logistics.

Specific metrics include manufacturing and logistics industry health, human capital, cost of worker benefits, diversification of the industries, state-level productivity and innovation, expected fiscal liability, tax climate, and global reach.

The report notes:

  • Indiana maintains an A grade in its global reach, exporting a full 10.5 percent of its GDP to global trading partners in the Americas, Europe, Asia, and Australia.
  • The Hoosier state continues to enjoy a very strong tax climate. In these areas, Indiana continues several years of strong performance.
  • The state improved slightly in 2019 with worker benefit costs, moving from a B- to a B, but slipped in its expected fiscal liability gaps. However, Indiana remains among approximately 35 states in which unfunded pension liabilities have little effect on the state’s fiscal health.

The report also noted that three areas of weakness remain — sector diversification, productivity and innovation, and human capital.

Hicks said that the sector diversification metric gauges the concentration of manufacturing in one subsector.

Though Indiana has more than half its durable goods sector in advanced manufacturing, the state is only about average in that diversification. Indiana has slipped in innovation and productivity from a B+ in 2016 to a C in 2019. This is connected to the human capital ranking of C, which remains the state’s most worrisome metric, he said.

Visit the Manufacturing Scorecard project website to view the performance history for each state and an archive of past reports with insight into the manufacturing industry: mfgscorecard.cberdata.org.