I was having coffee with Belle Fast, one of our state’s prominent economic developers. She asked me, “What’s the purpose of spending time on data from yesterday when what people want, and truly need, is a look at tomorrow? We know yesterday and even today, but the trick is having a clue about what’s ahead of us.”

What a softball she’d pitched. “Most people,” I answered, “have little idea of where we were yesterday and even less sense of where we are today. How do you know where you are going, if you don't know where you are and where you have been?”

“Come on,” Belle said, “you can look at a weather map of a town 50 miles to the west and get a pretty good read on local conditions coming our way.”

“Unless the winds change direction,” I replied. “Tell me. What’s Indiana’s biggest contributor to our Gross Domestic Product?”

“Manufacturing,” she said confidently.

“Right,” I pronounced. “The IMA (Indiana Manufacturers Association) would be proud, even though you’re defying the mythology of the farming community.”

“Manufacturing,” I continued, “was 26% of Indiana’s GDP in 2024 down from 29% in ’05. Nationally, the figures were 13% in ’05 and 10% in ’24. In ’05, Indiana had 4.2% of the nation’s manufacturing, but we climbed to 4.8% in ’24.”

“Well,” Belle demanded. “What does that mean? Are we lagging the nation in adjusting to a new reality, or are we ahead of the nation in strengthening manufacturing?”

“We’re schizophrenic is what we are,” I said. “In durable goods manufacturing, (things expected to last more than a year like steel, aluminum and the products made from them) the industry, in its share of GDP statewide and nationally, was 23rd of 23 industry groups tracked by the Bureau of Economic Analysis.

“In non-durable goods, (things like chemical and food products), this sector led the state in gaining its share of GDP, while nationally, it declined as a share of GDP.”

“So we had some winners and some losers,” Belle, ever the bright-side seer, enthused.

“Agreed,” I confirmed. “Over that 20 year period, we had 9 of 23 industries that outpaced the nation, led by non-durable goods manufacturing and even professional, scientific, and technical services. However, our average annual GDP total growth rate was 4.1% compared with 4.4% national.”

“Where I’m concerned,” I went on, “is we think we’re catching up, but I’m not sure. Information, a catchall including newspapers and much of the computer software world, was our worst performing industry.

“Indiana’s growth of GDP in that industry was 1.6% compared to 4.7% nationally. I’m not sure that data centers which process information are a replacement for producing information.”

“We’ll find out,” Belle said, departing cheerfully.
Morton J. Marcus is an economist formerly with the Kelley School of Business at Indiana University. His column appears in Indiana newspapers, and his views can be followed his podcast.

© 2025 Morton J. Marcus

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