Main Banner

Recent Work

Study emphasizes region as manufacturing hub

Wednesday, December 03, 2014

By kpc

Indiana has the heaviest concentration of manufacturing employment in the country, and its northeast region has a higher concentration than the state.

The degree of concentration in northeast Indiana compared with the state was quantified in a “Key Economic Sectors” study released in November by the Center for Business and Economic Research at Ball State University.

The U.S. Bureau of Labor Statistics uses location quotients to show how concentrated an industry’s employment is in a region compared with the industry’s national employment distribution.

Any score above 1 indicates a concentration above the U.S. average, or in a comparison with the state, above Indiana’s average.

The manufacturing industry — which provides nearly 19 percent of Indiana’s jobs — saw its concentration grow substantially in the northeast region of the state compared with the nation during the second half of the last decade.

The study reported the Fort Wayne area’s manufacturing location quotient was 2.33 compared to the rest of the nation and 1.25 compared to the rest of the state.

Growing industry categories seeing increased purchasing by northeast Indiana employers during that period included transportation equipment, food products, textile mills and furniture and related products, according to commodity flow data the study analyzed from federal agencies.

The commodity flow information is important because when area employers within an industry buy a lot from suppliers outside a region, to improve logistics for those operations, “it may be possible for that industry to have some suppliers brought into the region,” said Michael Hicks, director of Ball State’s Center for Business and Economic Research.

Because increased demand for what they sell can cause employers to establish new operations and otherwise expand production capacity, economic developers find information on industry growth trends important, he said.

“If something’s growing, that’s good; if something’s shrinking, spending (economic development) resources on it may not be good because there’s some reason it’s shrinking,” Hicks said.

Based on industry growth and purchasing patterns from suppliers, industry categories not related to manufacturing that were identified as ideal candidates for economic development in northeast Indiana included: warehousing and storage; oil and gas extraction; agriculture and forestry services; livestock; pipeline transportation; crop farming; leather goods; securities and other financial, lessor of non-finance intangible assets; publishing industries (software); rental and leasing services; and fishing, hunting and trapping.

The insurance carriers and related businesses, as well as professional, scientific and technical services industry categories did not show growth. But, Hicks said, development of those industries is important to the region’s economy. The study focused on momentum, not forecasting what was ahead for the industries it listed.

Four additional industry categories were identified as ideal for economic development because — in addition to increasing their purchases outside the region — they saw growth in what was left from their sales after purchases from suppliers were subtracted.

These industry categories were: agriculture chemicals; frames and lenses for glasses; plastics packaging materials; and plastics shape manufacturing.

The study also provided the number of employees in various occupations and the average wages for those occupations within the region’s 25 largest employment sectors.

“The goal of the project was to provide information, not to direct strategy,” Hicks said.

“I’d expect most folks who are looking at these data with an eye towards development would see some new opportunities, while some might find data that suggests they consider re-prioritizing their efforts in some way.”

A version of the study using the same methodology to provide a statewide overview of Indiana’s “Key Economic Sectors” was released this summer as part of a series covering the most critical industrial sectors in a dozen regions of the state.

Versions were released in November for the regions including South Bend, Lafayette and Gary as well as Fort Wayne.

Category: (none)

Share This Page

Back To Top