How Indiana's manufacturing employment is changing

Rachel Strange

Geodemographic Analyst, Indiana Business Research Center, Indiana University Kelley School of Business

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Indiana's manufacturing sector employs fewer people than it did 15 years ago, but remains the largest private industry component of the state's gross domestic product.

Indiana’s manufacturing sector employs more than 522,000 people, accounting for 17 percent of jobs, as of the second quarter of 2016—the largest share of any industry sector (health care and social services follows at 14 percent of all jobs). This is down 17 percent from 2001 levels (109,333 fewer jobs), but up more than 87,200 jobs from the employment levels experienced during the Great Recession (see Figure 1).

Figure 1: Indiana’s manufacturing employment indexed to 2001

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Source: Quarterly Census of Employment and Wages data from the U.S. Bureau of Labor Statistics

However, looking at manufacturing as a whole can only tell us so much. This article explores the employment changes for Indiana’s 21 manufacturing subsectors over the past 15 years.

The 10 largest subsectors comprise 86 percent of all manufacturing employment in the state. Figure 2 illustrates both the dominance of transportation equipment over the state’s manufacturing sector, as well as the dramatic hit it took during the Great Recession and its subsequent recovery.

Figure 2: Jobs over time in Indiana’s 10 largest manufacturing subsectors

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Source: Quarterly Census of Employment and Wages data from the U.S. Bureau of Labor Statistics

Among the largest subsectors, only food manufacturing and miscellaneous manufacturing employ more workers than they did in 2001 (see Table 1).

Table 1: Indiana’s 10 largest manufacturing subsectors, 2016 Q2

Manufacturing subsector Establishments Jobs Average weekly wage Change in jobs since 2001 Q1
Transportation equipment 586 126,772 $1,198 -11.2%
Fabricated metal product 1,703 58,788 $907 -12.6%
Machinery 812 42,710 $1,176 -19.9%
Primary metal 201 41,624 $1,393 -33.9%
Plastics and rubber products 488 39,755 $885 -18.4%
Food 517 37,913 $856 22.2%
Chemical 308 30,154 $1,727 -4.9%
Miscellaneous 573 28,951 $1,062 1.6%
Furniture and related product 488 24,772 $775 -17.6%
Printing and related support activities 601 15,505 $777 -30.4%

Note: Bold cells indicate subsectors that have increased employment since 2001 Q1.
Source: Quarterly Census of Employment and Wages data from the U.S. Bureau of Labor Statistics

Out of all 21 subsectors, six have higher employment levels in 2016 relative to 2001 (see Figure 3). In percentage terms, beverage and tobacco product manufacturing tops the list, with a 53 percent increase in jobs since 2001—followed by leather and allied product manufacturing with a 30 percent increase.

Figure 3: Indiana manufacturing subsectors that increased employment since 2001 Q1

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Source: Quarterly Census of Employment and Wages data from the U.S. Bureau of Labor Statistics

However, in numeric terms, food manufacturing accounts for the most new jobs (nearly 6,900) among manufacturing subsectors in the past 15 years (see Figure 4).

Figure 4: Job change in Indiana manufacturing subsectors, 2001 Q1 to 2016 Q2

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Source: Quarterly Census of Employment and Wages data from the U.S. Bureau of Labor Statistics

At the other end of the spectrum, primary metal manufacturing and transportation equipment manufacturing account for the largest employment losses in numeric terms since 2001, with declines exceeding 21,300 and 15,900 jobs, respectively. In percentage terms, some of the state’s smaller subsectors, including apparel manufacturing and electrical equipment, appliance and components manufacturing, experienced losses exceeding half of their 2001 workforce (see Table 2).

Table 2: Indiana's manufacturing subsectors, 2016 Q2

Manufacturing subsector Establishments Jobs Average weekly wage Change in jobs since 2001 Q1
Total manufacturing 8,098 522,469 $1,087 -17.3%
Beverage and tobacco products 147 5,258 $769 52.9%
Leather and allied products 14 755 $978 29.5%
Food 517 37,913 $856 22.2%
Petroleum and coal products 50 3,487 $1,795 12.7%
Textile mills 25 606 $725 8.8%
Miscellaneous 573 28,951 $1,062 1.6%
Chemical 308 30,154 $1,727 -4.9%
Transportation equipment 586 126,772 $1,198 -11.2%
Fabricated metal product 1,703 58,788 $907 -12.6%
Textile product mills 151 3,170 $666 -16.2%
Nonmetallic mineral product 408 14,049 $988 -17.3%
Furniture and related product 488 24,772 $775 -17.6%
Plastics and rubber products 488 39,755 $885 -18.4%
Machinery 812 42,710 $1,176 -19.9%
Paper 142 9,745 $971 -26.8%
Printing and related support activities 601 15,505 $777 -30.4%
Wood product 497 14,265 $750 -32.7%
Primary metal 201 41,624 $1,393 -33.9%
Computer and electronic product 207 14,630 $1,130 -48.2%
Electrical equipment, appliance and components 144 8,808 $918 -56.6%
Apparel 36 752 $655 -57.6%

Source: Quarterly Census of Employment and Wages data from the U.S. Bureau of Labor Statistics

Summary

Despite recent gains in manufacturing relative to the employment lows experienced during the Great Recession, Indiana’s manufacturing employment remains about 17 percent lower than 15 years earlier. However, productivity has increased primarily due to advanced technology. It is important to note that manufacturing comprises the largest private industry component of Indiana’s gross domestic product at $87 billion in 2015 and ranks fifth nationwide.

Also significant is the variation of employment losses and gains over the past 15 years, with employment levels changing anywhere from -58 percent to +53 percent since 2001. A handful of subsectors have experienced overall employment gains since 2001 (most notably, food manufacturing), but those gains are overshadowed by the larger jobs losses in most of the other subsectors.

More information can be found on STATS Indiana—just go to the Employment and Wages topic page or check out the States IN Profile tool to compare Indiana’s economy to other states.