A publication of the Indiana Business Research Center at IU's Kelley School of Business
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Region 2: North Central Indiana

The Area

Region 2 is comprised of four counties in north central Indiana: St. Joseph, Elkhart, Marshall, and Kosciusko. This region is included in the area often designated as the "Michiana Area" because its economic and other associations spill over into Michigan. 

Map

Population

Region 2's total 2000 population was 601,160. Population in the region grew by 11% from 1990 to 2000, slightly exceeding the overall Indiana growth rate of 9.7%. Elkhart ranked sixth among Indiana's 92 counties in numerical change during that decade; it gained 26,593 residents. Its 17% growth rate over the ten-year period made up almost half of Region 2's increase of 59,339 people. One of the reasons for this gain may be the number of jobs created by Elkhart's large manufacturing base.

Industrial Mix, Jobs and Wages

Region 2 is dominated by its two largest counties, St. Joseph and Elkhart, each of which is its own Metropolitan Statistical Area (MSA). St. Joseph is in the South Bend/Mishawaka MSA, and Elkhart is in the Elkhart/Goshen MSA. St. Joseph County is the fourth-largest county in the state and is home to the University of Notre Dame, AM General Corp. (manufacturer of the Humvee military vehicle), and Indiana's second busiest airport. It has a long history of automotive-related industries including the Studebaker Corp., which closed in 1963.

Elkhart County is the center of the nation's manufactured housing and recreational vehicle industry and builds about half of the RVs produced in the United States. It has more than 881 diverse manufacturing establishments, including producers of electronic components and musical instruments. Its farms are notable for making the county the largest producer of dairy products in Indiana, with milk production at more than 279 million pounds per year.

An important development for the economy of St. Joseph County and the region is the current construction in Mishawaka of a $200 million production facility for a new lighter weight, civilian version of the Humvee military vehicle. The new Hummer H2 SUV is a joint project of AM General Corp. and General Motors. This sport utility vehicle is expected to be in production by late 2002. Up to 1,500 employees are expected to work at the new plant when production reaches its peak of 40,000 vehicles per year. Business activity resulting from direct and indirect support of the new plant should increase other employment as well.

Though the two largest counties of Region 2 border each other, they have significantly different economic characteristics. St. Joseph County relies more heavily on the services and retail industries than does Elkhart County. Table 1 shows major industries for the year 2000 sorted by employment size.

Table 1

The services industry was the largest for St. Joseph at 31.7%; retail trade was next at 19.8%, and manufacturing was third at 16.7%. In contrast, 52% of employment in Elkhart County was in manufacturing. The service industry employed 14.6%, and retail 13.1%.

Like Elkhart, Marshall and Koscuisko counties rely heavily on manufacturing employment. Marshall County had 42.0% of its total employment in manufacturing and Kosciusko County 47.6%. Manufacturing accounted for 36% of Region 2's total industry employment in 2000. In contrast, Indiana as a whole had 23.3% of its workers employed in manufacturing last year.

Manufacturing companies, generally thought to provide good pay and employee benefits, may have played a role in population growth in the region from 1990 to 2000. Table 2 illustrates the wage advantage of manufacturing. Manufacturing's average annual wage in 2000 was $36,048, well above the region's total industry average of $29,905 and Indiana's total industry average of $31,018. It also had the distinction of having the largest number of jobs (over 110,000) and a wide diversity of occupations and skill levels. Its compensation was much more suited to supporting a family than the next two largest employing industries, services and retail, which together made up 39% of the employment of the region. Still, Region 2's average manufacturing wage was well below the state's manufacturing average of $42,425. Lower employment costs may be the reason for the heavy concentration of manufacturers in the area.

Table 2