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Manufacturing remains king in Northwest Indiana as far as economic impact, but health care and other sectors are catching up when it comes to the number of people working in those fields.

Manufacturing accounted for 30 percent of the gross regional product in Northwest Indiana in 2015, according to an Economy Overview presented last year by Anthony Sindone, clinical assistant professor of finance and economic development at Purdue University Northwest. That compares to just an 8 percent contribution for health care.

The gross regional product share is so much lower for health care and other sectors, notably retail, because they cannot come close to producing goods and services with the monetary value of those produced by industry behemoths such as BP, U.S. Steel, ArcelorMittal and others.

In addition, wages remain more robust in manufacturing, with annual wages for manufacturing jobs in the Region averaging $68,195 in 2015. There are 46,117 people employed in manufacturing in the seven counties of Lake, Porter, LaPorte, Starke, Jasper, Newton and Pulaski, according to U.S. Bureau of Labor Statistics data.

"It's a huge advantage for us to be a manufacturing powerhouse," said Heather Ennis, CEO at the Northwest Indiana Forum, a regional economic development organization.

A labor force steeped in manufacturing skills continues to attract business to Northwest Indiana, including Edsal Manufacturing Co. Inc., a manufacturer of commercial-grade shelving and storage systems that moved to Gary in 2015 and employs about 150 people.

Northwest Indiana "has a population that is interested in doing that kind of work," said Mitch Liss, the company's co-owner and executive vice president. "That may go back to the roots of there having been a lot of steel mills in the area."

But manufacturing's share of gross regional product has fallen, with the current 30 percent figure down from 34 percent just two years ago. Sindone's figures on gross regional product are developed from data from the Bureau of Economic Analysis, U.S. Bureau of Labor statistics, and other sources.

In 1990 there were about 70,000 manufacturing jobs in the Region and it accounted for about 25 percent of the total jobs here, according to Micah Pollak, an assistant professor of economics with Indiana University Northwest. Today, it accounts for 15 percent of the workforce here. That still compares favorably with 9 percent nationwide.

Pollak notes that the downward trend in manufacturing jobs can be seen across the country. Northwest Indiana is doing better, he said, and has “slowed the decline to a certain extent, but the trend is definitely toward less manufacturing jobs.”

Finding growth

Other sectors, notably health care and retailing, are growing in the Region, offsetting some of the job losses in manufacturing.

Health care and social assistance ranks as one of the top industrial sectors by employment, with 44,612 people employed in the industrial sector of health care and social assistance jobs in 2015 in the seven-county area. That represents an almost 80 percent increase since 1990 when about 26,000 people worked in the field.

That trend should soon see health care passing manufacturing as the Region's largest employer.

Sindone said health care and social assistance also now rank only behind manufacturing in providing economic clout, accounting for 8 percent of the Region's gross regional product.

Pollak said the health care industry is "probably one of the biggest brightest spots in Northwest Indiana. That's also relatively fast growing and it's also a service sector."

Annual pay for health care jobs in the Region averaged $45,875 in 2015. And there are many jobs in the field, such as doctors, nurse practitioners, administrators and some technician jobs that pay far above that average.

Indiana University Northwest's drive to establish up to 165 medical residencies at Region hospitals is a huge step forward for the entire health care industry, Ennis said.

"That helps raise the bar for Northwest Indiana, with an opportunity to bring in even more health care jobs," she said.

Two things that most major cities have to drive economic development forward are "eds and meds," short-hand for educational institutions and medical facilities, said Bo Kemp, director of the Gary Economic Development Corp.

Jobs in those fields also provide some high-paying employment, although the higher-paying positions require advanced degrees.

Kemp noted the city of Gary is fortunate in having Methodist Hospitals Northlake Campus, Ivy Tech Community College and  Indiana University Northwest, which has a medical school.

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More recently, the two sectors of retail sales and accommodations/food service have seen the most rapid growth. Those two sectors account for 40,083 jobs in the seven-county area and 29,876 jobs respectively. But average pay is much lower at $23,430 for retail and $13,318 for accommodations/food service. 

Turning it around

Technical and professional services accounted for about 8,104 jobs in Northwest Indiana in 2015. That figure actually represents a decrease of 1,100 jobs since 2007, or 12 percent. Sindone said the jobs in technical, scientific and professional services only account for about 2 percent of the Region's gross regional product.

Nationally, technical and professional services is one of the fastest growing sectors. Pollak said more than a million jobs have been added nationwide between 2007 and 2015 in that field.

These jobs include legal services, accounting, engineering, advertising, public relations and computer technology.

Growing the number of such jobs will be one key to a more prosperous tomorrow for Northwest Indiana.

Pollak said there needs to be an effort made to encourage these professionals to live in Northwest Indiana so we don't lose the training we actually invested in them.

“Getting those type of high-skilled workers to stay here is kind of the first part of the battle,” he said.

Amenities like upscale grocery stores, coffee shops and bike paths are seen as key to attracting and retaining young professionals needed to shift the economy to one that relies more on professional and technical services.

Pollak and Bill Hanna, president and chief executive officer of the Northwest Indiana Regional Development Authority, see transportation-oriented development as a way to bridge the gap between workers and jobs.

Hanna said the 18th Street Brewpub near the South Shore commuter train station in the Miller area of Gary is one example of the types of amenities young professionals like to see. The RDA pitches it as an example of the type of transit oriented development that can take place if the South Shore is improved and expanded.

Pollak said it is amazing how one small business like 18th Street created just a short time ago has “just had such a tremendous impact and it just goes to show how much of an opportunity there is here to just change the perception of the Region and ultimately what it's about.”

Manufacturing counts

But it may take more than just a brewpub and commuter rail extension to turn the Region around.

To that end, Northwest Indiana is doing its best to slow the decline in manufacturing jobs.

Sindone, of Purdue University Northwest, believes manufacturing will continue to be a strong component in the area's economic future.

Primary metal manufacturing, mainly steel, was the top segment with 18,875 people employed at an average annual wage of $89,439, according to the Bureau of Labor Statistics.

Pollak agrees that manufacturing remains an economic base for the Region, but said “the big caveat is it's definitely on the decline." Pollak said automation, more than foreign competition, has been the main reason for the decline in manufacturing jobs.

Sindone said manufacturing being such a large part of the economy is a good thing, but that the Region is seeing greater diversification when it comes to employment.

No economy can survive without making things, he said, and as long as the Region continues to make things that can be exported to other areas it will be OK. Even with the decline in the number of jobs, Sindone said some manufacturers can still have a difficult time finding people to work at their companies. He said workers willing to learn new skills is the key to filling those jobs.

Career and technical education and training in both secondary and post-secondary school would also go a long way toward solving the skills gap problem, Sindone said.

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