The story so far: economic indicators for Indiana have been pointing up in 2004.

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

IT'S BEEN A GOOD 2004 for the Indiana economy thus far. Thanks to a surge in business spending and industrial activity in the national economy, most of the economic indicators for our state have been pointing up this year. That's welcome news in the wake of the most painful recession we've experienced since 1982.

The most persuasive evidence of this rebound comes in the payroll employment statistics for the state and its metropolitan statistical areas, or MSAs. Unfortunately, the most recent data we have on job growth are fragile, since they are always revised, in some cases substantially. One of those recent rounds of revisions, for example, told us that Indiana's recession related job decline ended in early 2002, and did not carry into 2003 as we had previously thought.

That's why the intensity of political and media attention to each new monthly tally of state payrolls is a little bit scary. The news these days is good, at least, and as such it is certainly welcome. But forming firm conclusions based on the last few months worth of employment reports is risky, to put it mildly.

But even discounting the last few months, there is no mistaking the turnabout in hiring in the Indiana economy. Since June of last year, the state has been slowly building up payrolls, which now stand about 1 percent higher today than they were at that time. That has not been the case for many of our Midwest neighbors. Illinois, Michigan and Ohio have still been losing jobs, with our neighbor to the north still very hard-hit by the recession and manufacturing upheaval.

Some segments of the Indiana economy cannot be said to have rebounded, simply because they never really stopped growing. The education and health-services industries, for example, have been adding about 10,000 jobs a year for the past three years, which is roughly 3 percent growth. Governments have also slowly added about 20,000 jobs to their payrolls in the last three years.

Manufacturing is another sector that has failed to rebound, at least in...