A publication of the Indiana Business Research Center at IU's Kelley School of Business
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Which Industries Are Growing in Indiana?

Total employment in Indiana, compared to a year earlier, was up 1.4% in March (see Figure 1). Nationally, the increase was 2.3%. Although the figures for March are preliminary, it seems safe to say that the state has added more than 40,000 jobs for the fourth consecutive year (see Figure 2).

Figure 1

Figure 2

Which industries are growing depends on how we measure growth and how we define industries. For example, between March 1999 and the same month in 2000, service-producing activities added 36,300 jobs in Indiana, compared to only 5,200 for goods-producing activities. But if we go to a finer level of detail, then the most jobs were added by a manufacturing industry, transportation equipment, which grew by 5,500.

While it is appropriate to measure growth by absolute magnitudes (number of jobs added) or by percent change, a third way may be more telling. If we look at the change in share of total employment, a somewhat different picture emerges. Small but fast-growing sectors are not over-represented by their percent change, and large sectors with slow growth do not dominate the presentation.

Table 1 shows the ordering of industries by change in share of total employment. Building material dealers had a 7.7% increase in employment, but they do not lead the list because their total jobs added is smaller than other sectors. Yet number of jobs added alone does not determine the ranking (as seen by legal services). It is the composite effect on employment share that rules this ordering and prevents being blinded by either swift growth among smaller entities or lumbering growth by large entities.

Table 1

Indiana's growth leaders are not necessarily those of the nation as a whole. Likewise, the fastest-growing national industries have not fared consistently well in the Hoosier state. In fact, it is unlikely that any state economy will exactly mirror the national economy because industries tend to cluster geographically rather than spreading themselves evenly across the country