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  • Manufacturing and Logistics 2010 National Report

Dubois County is a manufacturing powerhouse, a local economic developer says, but economic diversity is not its strong suit.

With a workforce of 28,000 people, a full 46 percent work in manufacturing. A quarter of the workforce works in wood products and furnishings, both of which depend heavily on the housing and real estate markets.

So when those parts of the economy tanked Dubois County felt the blow, said Bob Grewe, president of the Dubois County Area Development Corp.

“The economy was a bit of a wake-up call.”

In response, this week Grewe’s organization unveiled a new plan to strengthen and diversify the county’s economic base.

The three-year plan calls for identifying new types of business and industry to recruit to the area.

“It’s the whole notion of not (having) all your eggs in one basket,” Grewe said.

According to a study released Thursday, Dubois County’s efforts are exactly what Indiana needs.

The study, called the Manufacturing and Logistics 2010 National Report, shows that Indiana ranks tops in the nation for manufacturing activity but only so-so for economic diversity.

Ball State University’s Center for Business and Economic Research conducted the study, which measures all 50 states in nine factors. Those factors are: manufacturing, logistics, tax climate, benefit costs, productivity/innovation, venture capital, economic diversity, global reach (exports and foreign investment) and human capital.

In the report, each state was issued a grade from A to F on each factor. Indiana earned three As — in manufacturing, exports and tax climate. Its weakest areas, earning a C-minus, were in economic diversity and human capital.

Indiana also earned a B+ (logistics) and three Cs (benefit costs, productivity and innovation, venture capital).

Ball State economist Mike Hicks, who helped produce the report, said the report shows where Indiana should shine — and may struggle — in coming years.

In particular, Hicks said, economic diversity is important because it can help an area weather economic storms.

Another area of concern, Hicks said, is the state’s relative weakness in human capital — the availability of a skilled workforce.

“In the long run, if we can’t get a better handle on that, we’re not going to remain an ‘A’ in manufacturing,” Hicks said.

On the plus side, Hicks said, Indiana ranked second only to Florida in its tax climate, an improvement from the previous year.

“Our tax climate went from being pretty darned good to really great,” Hicks said.

Property tax reform and a balanced state budget improved Indiana’s tax climate relative to other states, Hicks said, and this should make the state attractive for businesses as they look to expand.

The report also forecasts strong manufacturing growth.

“2011 and 2012 are likely to be record manufacturing years in Indiana,” Hicks said.

As a measure of that growth, the report predicts manufacturing income in Indiana’s major cities. Evansville’s manufacturing income is predicted to remain flat this year and grow 4.2 percent next year. Statewide, growth is predicted to also stay flat this year, with 7.3 percent growth next year.

Hicks said Evansville’s relatively slower growth in 2011 is a reflection of the area’s relative stability. The recession didn’t hit the area as hard as others, so its growth rate will also be more modest.

This is the third year for the study, which was commissioned by Conexus Indiana. Conexus is an initiative to strengthen advanced manufacturing and logistics in Indiana.

© 2010 Evansville Courier & Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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