Indiana has started to see a resurgence in foreign investment, although it's still not back up to pre-recession levels, a study found.
Foreign companies such as ArcelorMittal and BP have been investing more in the state after largely pulling back during the economic downturn, according to the Indiana University study. Businesses headquartered abroad also have been accounting for a much greater share of the new investment and job creation in Indiana over the last two years.
Researchers found more than 133,000 Hoosiers work at businesses where foreign investors or companies held at least a 50 percent stake. Indiana saw a 1.7 percent increase in jobs at foreign-owned companies in 2010, the most recent year for which data was available.
Job announcements have suggested the amount of foreign investment in Indiana continued to pick up through 2012 and is still on the rise, said Indiana Business Research Center Economic Research Analyst Tanya Hall, who was one of the authors of the study.
Over the last two years, companies announced that they would invest $4.7 billion in Indiana, and bring more than 12,400 jobs. About 30 percent of those announcements were made by foreign-based companies, as compared to less than 9 percent between 2009 and 2011.
The study cited Paris-based Teleperformance's addition of 600 jobs at a call center in Hobart and London-based BP's modernization of its Whiting Refinery. Lakeshore Chamber of Commerce executive director Dave Ryan has credited that $3.8 billion project, the largest private investment in state history, with saving Northwest Indiana during the Great Recession.
Foreign-owned companies have become more and more crucial to the state's economy in an age of increasing globalization, Hall said.
Currently, about one of every 20 Hoosiers who work in the private sector is employed by a foreign-owned company. Luxembourg-based ArcelorMittal for instance is one of the biggest local employers, with more than 11,000 workers in Northwest Indiana.
"Foreign direct investment brings dollars and jobs into the economy," Hall said.
Foreign investment fell off from a high of $1.9 trillion in the United States in 2007 during the downturn, but has been picking back up.
"The financial crisis or 'Great Recession' in 2008 certainly hindered foreign investment, due to the financial resource constraints as well as the uncertainty created by the crisis," said Timothy Slaper, director of economic analysis at the Indiana Business Research Center at Indiana University's Kelley School of Business. "Fortunately, the majority of FDI activity rebounded nicely."
Nearly all Midwestern states suffered sharp declines in employment at foreign-owned companies when the recession was at its height between 2008 and 2010, but Indiana lost fewer jobs during that time, the study found. Indiana shed 4.8 percent of jobs supported by foreign investment, while Michigan and Kentucky both hemorrhaged 5.7 percent.
Indiana ranks 14th nationally in the number of jobs at foreign-owned companies, which employ an estimated 5.7 million Americans.
The state has been able to attract such investment because of its skilled workforce and business-friendly climate, Hall said.
Most commonly, the foreign-owned companies are investing in manufacturing operations in Indiana. More than 63 percent of Indiana residents who get a paycheck from foreign businesses work in manufacturing, compared to 37.7 percent nationally.
Nearly three out of four new jobs at foreign companies that have been announced in Indiana over the last two years are in the manufacturing sector.
"Indiana is known for manufacturing," Hall said. "It's a state where individuals have the skills to do that kind of work."