Indiana manufacturing in perspective: data show it's not as bad as some might think.

• Author: Barkey, Patrick M.
• Position: Indiana Indicators

THE FOUR-YEAR-LONG hemorrhaging of manufacturing jobs in Indiana and the United States is finally over.

In the years 2000-03, the national economy shed almost 20 percent of its manufacturing workforce, and states like Indiana that depend most heavily on manufacturing for their livelihood suffered more than most. But October's job report showed practically no change in the number o[ jobs in the nation's factories, and for the last 12 months employment levels have been relatively constant.

A look at the data pours water on ninny commonly accepted notions about manufacturing in general, and Indiana manufacturing, in particular. Here are a few examples.

Is the Indiana manufacturing economy in decline? That depends on how you keep score. In inflation-corrected dollars, the output of Indiana's manufacturers has increased every year between 1990 and 2003 except one--the year of the 2001 recession. The lost output of much-publicized plant closings here and there have been silently replaced and more--with more and higher value output from existing and new facilities.

And while we're talking about declines, you may have thought that Indiana manufacturing suffered quite a bit more than manufacturing nationally in this recession. Again, the facts say otherwise. Beginning with the first quarter of 2001, the official beginning of the recession, the Indiana economy suffered a 10 percent decline in manufacturing jobs through the end of 2003. Over those same quarters, the U.S. manufacturing sector was hit with a 15 percent job loss.

What is more, the declines in Indiana came off a higher base, following impressive gains in the 1990s. When the latest manufacturing downturn started in 2000, Indiana's manufacturing payrolls stood nearly 15 percent higher than they were in 1991.

These facts...