News From Terre Haute, Indiana

News

June 9, 2013

Autos driving Indiana economy

Hoosier state economy 8th-fastest growing in 2012

TERRE HAUTE — Durable-goods manufacturing was the largest contributor to Indiana’s growth in real gross domestic product in 2012, contributing 1.7 percent of the state’s 3.3 percent economic growth last year, according to the Bureau of Economic Analysis, a division of the U.S. Department of Commerce.

The industry was the leading contributor to real GDP growth in 22 states, increasing 9.1 percent in 2012, after increasing 6.8 percent in 2011.

Still, the BEA’s Great Lakes region, which includes Indiana, Illinois, Ohio, Michigan and Wisconsin, which averaged 2.2 percent growth, was the only region where growth decelerated in 2012 relative to growth in 2011.

Indiana had minus 6 percent GDP in 2009, but 6.4 percent growth in 2010 and 2.2 percent growth in 2011. Yet, Indiana led the Great Lakes region with 3.3 percent growth in 2012, while Ohio and Michigan grew 2.2 percent, Illinois 1.9 percent and Wisconsin 1.5 percent.

The Hoosier state ranked as the eighth-fastest growing economy in real GDP in the nation last year, according to the BEA.

Real GDP is an inflation-adjusted measure of each state’s production based on a weighted average of national prices for those products produced within each state, according to the BEA.

The southwest region, which includes Texas, Oklahoma, New Mexico and Arizona grew the most as a region at 4.1 percent, led by a 4.8 percent GDP growth in Texas.

North Dakota led all states with a 13.4 percent in GDP growth, largely due to mining. Nationwide, agriculture, forestry, fishing and hunting subtracted from the nation’s real GDP growth in 2012. This industry subtracted from real GDP in 35 states.

“Certainly Indiana is growing faster in durable goods production relative to our neighboring states and for the country as a whole,” said Steve Witt, president of the Terre Haute Economic Development Corp. “There is no question that Indiana is a leading manufacturing state, this [BEA report] is just further evidence of that.”

Witt said the largest growth is in Indiana’s automotive industry, with expansions at Honda’s Greensburg plant, with Toyota in Princeton and Toyota production in Lafayette along with Subaru,  plus General Motors pickup truck assembly plant in Fort Wayne.

“There are hundreds of automotive suppliers in Indiana and we are fortunate to have two great ones in Vigo County — Advics [Manufacturing Indiana LLC] and ThyssenKrupp [Presta],” Witt said.

ThyssenKrupp completed a $22 million expansion, adding 120 new jobs in Vigo County. That company will eclipse 400 workers by the end of this year. Advics employs about 500 workers.

Other industry sectors, such as aerospace, play a key role in Vigo County, such as GE Aviation, Witt said.

GE Aviation in Terre Haute employs more than 450 workers after $15 million investments in equipment since 2006. Clabber Girl, a division of Hulman & Co., is a world market leader in the production of baking powder.

Bemis Inc., with about 1,000 workers, and Sony DADC, with about 1,500 workers, are among the largest employers in Vigo County. There is also Taghleef Industries, formerly AET, plus other plastic industry firms such as Tredgar, Ampacet and Jadcore.

Yet, Witt said he “remains puzzled” over Vigo County’s  unemployment rate, hitting 10.2 percent in April, a non-seasonally adjusted figure, according to the Indiana Department of Workforce Development.

“We have the eighth highest unemployment rank, while Sullivan County ranks fourth at 10.7 percent and Vermilion County ranks second, at 11.4 percent,” Witt said of April figures.

“We are very fortunate to have the industries that we have, and the diversification we have in our economy with health care, higher education, retail, schools and government, and agriculture. We just need a bigger economic base, particularly on the manufacturing side,” Witt said.

“We do have some jobs unfilled for a lack of qualified workers, so that underlines how important our economic development efforts are and why we need to grow our local economy. We need to get our unemployment rate down relative to the state,” Witt said.

For Vigo County, much of that unemployment is fluctuation in summer employment, specifically for the education section, said Joe Frank, spokesman Indiana Department of Workforce Development. That sector includes higher education, such as Indiana State University, Ivy Tech Community College, as well as public and private K-12 schools.

“When the [Bureau of Labor Statistics] calls for a survey and asks a teacher if they are working that week, a teacher will say no, and it will be listed as unemployed,” Frank said. Vigo County has a large education sector for employment, Frank said.

“When you look at Vigo County on a bar scale, the fluctuations are exactly to where you school dates would be,” Frank said. “So in the summer, [Vigo County’s] unemployment rate goes up, but in the winter months the unemployment rates go down, so that tells me that rate has a lot to do with education,” Frank said.

Frank said Indiana has had big manufacturing gains since 2010 since the low point of 2009. Indiana has grown over 60,000 jobs in manufacturing since 2009, Frank said.

“We are the most dense manufacturing private sector state in the United States. That means we have more of a percentage of our private sector that is manufacturing than any other state. In our state, 19.5 percent of our private sector is manufacturing,” Frank said.

“The state as a whole is starting to become a high point for manufacturing,” Frank said.

In Vigo County, the major individual employers include the health industry with Union Health Group and Terre Haute Regional Hospital, along with companies such as Sony DADC and Bemis, Frank said.

“Vigo County has manufacturing, but is not as manufacturing intense as other areas, especially as northcentral Indiana, with automotive suppliers and recreational vehicles manufacturers,” Frank said.

Reporter Howard Greninger can be reached at 812-231-4204 or howard.greninger@

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