Indiana’s manufacturing and logistics sectors continue to flourish despite job losses the past 18 months, a new Ball State University report said.
“Indiana’s factories shed jobs in 2019 and 2020, but these industries remain relatively healthy,” said study author Michael Hicks, director of Ball State’s Center for Business and Economic Research. “In fact, while the state did slide slightly backward in several categories, the cause was no fault of our manufacturing and logistics industries.”
The 2020 Manufacturing and Logistics Scorecard analyzes how each state ranks among its peers in several areas of the economy that underlie the success of manufacturing and logistics.
The changes from 2019 reflect downgrades in three areas: logistics (dropped from A to B+), global reach (A to B+), and worker benefit costs (B to B-).
“These are directly caused by two challenges to federal and state policymakers,” Hicks said. “First, the ongoing trade dispute with China suppressed both our strength in logistics and our global reach (and) this is because the goods directly affected by tariffs and international retaliation are disproportionately represented by the industry mix in Indiana.”
Hicks said elimination of tariffs and an easing of international tariff retaliation should return Indiana to an A grade in both categories.
“Second, the extraordinarily high and quickly rising costs of hospital care in Indiana caused a half letter grade decline in our worker benefit costs,” he said. “Over the past decade, Indiana made robust improvements in this category, but that has changed.”
Hicks said with Indiana’s hospital markets leading the nation in monopolization and costs, the financial drag of health care spending weighs heavily on Indiana’s manufacturing and logistics industries.
“Businesses in the state enjoy an ideal tax climate for manufacturing and logistics operations, which leads to a continued streak of A grades in the category,” said Srikant Devaraj, a co-author of the study and CBER research professor. “Indiana also continues its strong performance in the manufacturing category, receiving an A again this year.”
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