By Dave Gatton and Carolyn Merryweather
August 4, 2003

On July 14, Gary Mayor Scott L. King along with Indianapolis Mayor Bart Peterson, and Kokomo Mayor James E. Trobaugh, President of the Indiana Association of Cities and Towns released "Indiana's Metro Economies: The Engines of the State's Growth," which contained the 2002 Gross Metropolitan Product numbers for Indiana's 13 metro areas. The report concluded that the state must, "develop a specific growth strategy for each metro area," in order reduce dependence on manufacturing and grow towards a "21st century economy."

The report, which was written for The U.S. Conference of Mayors and The Council for Investment in the New American City by economic forecasting firm Global Insight, says that in 2002, Indiana metro areas accounted for 76.6 percent of the state's Gross State Product, or $153.3 billion. Indianapolis was the top contributor, with $61.3 billion in GMP. Fort Wayne followed with $19.2 billion, and Gary rounded out the top three at $16.5 billion. Together, these three metro areas make up almost half of the state's economic output. Additionally, metros contributed 78.1 percent of Indiana's jobs, and 80.3 percent of its employment income. "Our metro areas are at the heart of Indiana's economy, and we must make them even more economically competitive to secure Indiana's future," said King.

The recent recession hit Indiana metros hard, losing 22,800 jobs over the 12-month period ending in May 2003 according to the report. As the most heavily industrialized state in the nation, Indiana's manufacturing sector has been particularly affected.

According to the report, 20.2 percent of Indiana jobs are in manufacturing (down from 22.2 percent before the recession) and 27.2 percent of the GSP is from manufacturing. The U.S. average for manufacturing is 12.8 percent for jobs and 14.0 percent for GSP. The long-term decline of the manufacturing sector has seen shares of employment go from 30 percent in 1966 to 20 percent in 1985 to 12.8 percent today, meaning that Indiana's economy is effectively almost 20 years behind the nation's.

The report recommends that Indiana metros develop economic strategies to more fully incorporate technology, services, entertainment, and education into their economies in order to ensure future prosperity. Additionally, the metros should follow the examples of other metro areas which have grown over the last decade. Those metros share a highly skilled, creative labor force, high quality of life, access to emerging technologies, venture capital, an efficient and competitively priced infrastructure, a supportive regulatory environment including moderate tax burdens, proximity to workers or suppliers, and the fostering of public-private partnerships.

The report is part of an ongoing Metro Economy series. For a hard copy of the report, call Dave Gatton at (202) 861-6712 or send e-mail to dgatton@usmayors.org.