Micah Pollak is an associate professor of economics at Indiana University Northwest. He answered questions from The Times about the Region's economy.
Why is Northwest Indiana's economy faring so well right now?
Northwest Indiana offers more economic advantages and infrastructure than you can find in almost any other geographic region in the United States. These include proximity to Chicago, incredible logistics in the form of highways, ports, rails and air, excellent schools, many recreational amenities including a national park, high-end shopping and dining, and more. These assets have long been undervalued and reflect the strong economic fundamentals of the Region. In recent years, the success of new ventures in the Region combined with a unified economic development plan has begun to draw attention. I believe we are entering an era of growing interest in the assets and amenities offered by Northwest Indiana, leading us to an economy that better reflects our full potential.
Why does Northwest Indiana normally lag behind the state and nation? What changed?
Despite strong economic fundamentals, Northwest Indiana has faced its share of economic challenges. Our urban core cities continue to struggle with population out-migration, relatively higher unemployment rates and redevelopment challenges. As a region, we have focused too exclusively on single types of industry (manufacturing) and housing (single-family homes) in the past, rather than developing a healthy mix. As we continue to address these challenges and develop a healthier mix of industries and housing, combined with investments in quality of place, the gap between the Region and the state and nation will continue to narrow.
Why is Northwest Indiana's population growing?
After more than a decade of decline, the population in Northwest Indiana is now growing. Since 2018, the population of the Region has risen 2.9%, significantly outpacing the national population growth rate of 1.9% during the same period. The most significant driver of this growth was the reversal in net domestic migration, or a dramatic change in the flow of residents into and out of the Region. Between 2009 and 2017, Northwest Indiana averaged a net loss of 2,500 people per year with more people moving out of the Region than into it. Since 2018, this has reversed, and we have averaged a net gain of 1,400 residents per year. Much of this reversal can be attributed to investments in quality of place, which have yielded high returns.
What are positive signs for Northwest Indiana's economy?
The single and most compelling positive sign for Northwest Indiana’s economy is the recent population growth, especially as it’s driven by positive net domestic migration. Ultimately, people want to build their lives in a place which offers a strong labor market and high quality of life. When workers and their families make the choice to live in Northwest Indiana, that is a testament to the current economic path and the future economic prosperity of the Region.
What impact is the Region economy having on the housing market?
Despite higher interest rates, the housing market in Northwest Indiana continues to remain tight. Market inventories are low, and properties generally do not remain on the market long. In response to this strong demand for housing, we have seen a significant increase in new residential construction over the last few years, but this has done little to slow the rise in home prices. The condition of the housing market in Northwest Indiana is consistent with the growth in population and the growing attractiveness of the Region as a place to work and raise a family. Over the next few decades, the most promising area for housing growth is in mixed-use, multi-family development, centered around convenient access to public transportation and walkable neighborhoods.
How is Northwest Indiana's industrial sector faring? Is it still a source of well-paying jobs?
Northwest Indiana’s industrial sector continues to play an important role in the regional economy. Manufacturing is the second largest industry in terms of employment, only recently surpassed by health care and social assistance. Manufacturing jobs continue to be well-paying, directly accounting for roughly 30% of all worker earnings in the region, and paying 60% more on average than all other industries in the Region.
What sectors in Northwest Indiana is seeing the most job growth?
In 2023 the Service Providing sector in Northwest Indiana was responsible for the most growth, adding more than 5,000 new jobs, while employment in the Goods Producing sector remained flat. Within the Service sector, employment grew across almost all industries, but was led by Health Care and Social Assistance (+1,600), Professional and Business Services (+1,000) and Retail (+600). In the Goods Producing sector, employment in Manufacturing fell (-900) but was mostly offset by a rise in employment in Construction (+700).
How is Northwest Indiana's economy evolving? What ongoing shifts have been taking place in the Region economy and what will it mean for the future, both in the short and long terms?
The economy of Northwest Indiana continues to diversify and grow from its manufacturing-based roots. Today, Primary Metal Manufacturing provides 15% of all wages in Northwest Indiana, but employs just 6% of workers, down from 10% twenty years ago. As our economy continues to rely more on service providing industries, we need to support and encourage growth in higher-paying service sector industries, including professional and technical industries among others.
What are you expecting for Northwest Indiana’s technology sector this year?
Looking forward, I believe that the technology and technology-related industries will play a larger role in Northwest Indiana.
What are you expecting for Northwest Indiana's retail sector?
In 2024 I expect we will continue to see growth in retail, both in terms of employment and wages. As the Region experiences positive net domestic migration, and households with greater disposable income choose to move to Northwest Indiana and remain here, I think we will see greater growth in higher-end retail.
What are you expecting for Northwest Indiana's industrial sector?
The infrastructure in Northwest Indiana is well suited to manufacturing and related industries, and while smaller firms may come and go, Northwest Indiana will continue to be a competitive location for the industrial sector. The potential sale of U.S. Steel will certainly play a major role in the local economy in the next year.
How would you characterize Northwest Indiana's economy overall?
Overall, the economy of Northwest Indiana has extremely strong fundamentals. The infrastructure and amenities the Region offers are unparalleled and have been undervalued for some time. As investors begin to discover the economic opportunities in Northwest Indiana, it will begin to alter the economic landscape. Through much hard work, I believe Northwest Indiana is on the right path to realize our economic potential in the coming years and decades.
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