Gary.

• Author: Coffin, Donald A.
• Position: Economic conditions

Looking Back

Establishment-Based Estimates of Employment and Earnings: The northwest Indiana (1) economy has generally lagged the state and the nation over the last decade and more. Between 1995 and 2006, employment in northwest Indiana grew at an average annual rate of 0.22 percent, compared with Indiana's relatively meager 0.60 average annual growth and the nation's 1.32 percent. This disappointing overall performance conceals much stronger performance in some sectors and much weaker performance in others. Table 1 compares average annual employment growth for northwest Indiana with the state and the nation, for selected industries. While employment in construction and in health care services were quite strong, no industry in northwest Indiana experienced faster employment growth than both the state and the nation.

Real weekly earnings also grew more slowly in northwest Indiana (0.25 percent per year) than in the state (0.79 percent per year). Locally, weekly earnings grew more rapidly than the state in construction, manufacturing, and wholesale trade, and more slowly than the state in transportation and utilities, finance, and health care (see Table 2).

During the past year, employment growth in northwest Indiana has modestly outpaced the state, 1.02 percent to 0.92 percent (see Table 3). Real weekly earnings however, have increased by 3.68 percent at the state level, but only by 2.76 percent in northwest Indiana. (2)

Household-Based Estimates of the Labor Force, Employment, and Unemployment: Labor force growth locally has also substantially lagged. Between January 1990 and September 2006, the northwest Indiana labor force grew by only 8.4 percent, compared with 16.0 percent for the state and 20.8 percent for the United States. The household-based measure of employment yields an increase of 9.5 percent in northwest Indiana, 17.2 percent in the state, and 21.6 percent for the nation during the same time period. (3) Figure 1 provides data on the size of the local labor force, household-based employment, and establishment employment for the recent past.

[FIGURE 1 OMITTED]

The unemployment rate in northwest Indiana has generally tracked the U.S. unemployment rate quite closely and has generally been slightly higher (see Figure 2). The relatively steady decline in the national unemployment rate (it has declined from 6.3 percent in March 2003 to 4.5 percent in September 2006) has not, it seems, helped to drive the local unemployment rate down.

[FIGURE 2 OMITTED]

The Challenges: Northwest Indiana continues to be a challenging place for new businesses to locate. The environmental issues surrounding many available industrial sites near Lake Michigan reduce the attractiveness of the region to outside firms, along with the continued traffic congestion and lack of regularly scheduled airline service at the Gary--Chicago Airport. However, the vitality of the Port of Indiana...