According to the 2020 Manufacturing and Logistics Scorecard from Ball State University, Indiana’s manufacturing sector remained strong, though employment over the past 18 months has slipped.
The 2020 Manufacturing and Logistics National Report shows how each state ranks among its peers in several areas of the economy that underlie the success of manufacturing and logistics.
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“Indiana’s factories shed jobs in 2019 and 2020, but these industries remain relatively healthy,” said study author Michael Hicks, director of Ball State’s Center for Business and Economic Research (CBER). “In fact, while the state did slide slightly backward in several categories, the cause was no fault of our manufacturing and logistics industries.”
The 2020 Manufacturing and Logistics Scorecard analyzes how each state ranks among its peers in several areas of the economy that underlie the success of manufacturing and logistics.
These specific measures 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 changes from 2019 reflect downgrades in three areas: logistics (dropped from A to B+), global reach (A to B+), and worker benefit costs (B to B-).
“These are directly caused by two challenges to federal and state policymakers,” Hicks said. “First, the ongoing trade dispute with China suppressed both our strength in logistics and our global reach. This is because the goods directly affected by tariffs and international retaliation are disproportionately represented by the industry mix in Indiana.
“Elimination of tariffs and an easing of international tariff retaliation should return Indiana to an A grade in both categories. Second, the extraordinarily high and quickly rising costs of hospital care in Indiana caused a half letter grade decline in our worker benefit costs. Over the past decade, Indiana made robust improvements in this category, but that has changed.”
Hicks also noted that with Indiana’s hospital markets leading the nation in monopolization and costs, the financial drag of health care spending weighs heavily on Indiana’s manufacturing and logistics industries.
“Businesses in the state enjoy an ideal tax climate for manufacturing and logistics operations, which leads to a continued streak of A grades in the category,” said Srikant Devaraj, a co-author of the study and CBER research professor. “Indiana also continues its strong performance in the manufacturing category, receiving an A again this year.”