Chesterton Tribune

Study: Steel still king in Northwest Indiana

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By DOUG ELISH

More than 200 business leaders and government officials from Northwest Indiana gathered at Valparaiso University Wednesday to hear the results of the most comprehensive evaluation of the region’s economy to date.

The results of the study conducted through the NWI Forum with the help of the national company Dun & Bradstreet were not great.

There were some economic indicators that showed Northwest Indiana keeping up with the rest of the nation and showing strong growth, but in many areas the region is behind and not gaining ground quickly.

The massive study should help though, said NWI Forum board chairman Don Babcock.

He said these figures and trends give economic leaders in the area a clearer picture of the state of business and education in Northwest Indiana, something they’ve never had before.

“It was like driving a car without a speedometer,” he said. “In fact, sometimes I think the windshield was blocked. It’s like it was covered in snow.

“What we want to do is create a foundation here. And then ask, what are the things we want to do to drive our economy forward?”

In one of the most important factors of growth, household revenues in NWI grew only 22 percent from 2001 to 2009. The national average during that time was 29 percent, while Indianapolis was 26 percent. Chicago’s percentage growth was also 22.

Another concerning figure the study revealed was that of the 49,000 businesses in NWI, more than 19,000 are in significant financial stress. Of Porter County’s 9,570 businesses, 3,459 are under stress and 220 are under serious stress.

“The story of most of the Midwest is that the national economy is outperforming us,” Babcock said. “The Midwest has been struggling to keep up with the rest of the country because of the manufacturing decline.”

The study showed that the story of NWI is still the steel industry. Despite having only a third of the overall number of workers from past decades, the steel industry still produces $1.8 billion in earnings for region workers at an average salary of $77,299. The mills also produce jobs for other industries through their construction and engineering activity.

“Steel is still king,” Purdue Calumet economics professor Paul McGrath said.

A factor that seems to be hurting the area’s economic growth is the lack of education, according to Martine Duchatelet, dean of the School of Management at Purdue University Calumet.

Only 17 percent of the region’s residents hold a bachelors’ degree or a higher degree. That is lower than the Indiana average (21 percent), the Indianapolis average (29 percent) and the national average (27 percent).

“It is a curse for this region,” Duchatelet said. “It is shocking. We are really far behind.”

The study showed that education does play a large role in unemployment. The unemployment rate for people without a high school diploma is 19.8 percent, while the rate falls to 12 percent for high school graduates and down to 5.6 percent for college graduates.

The results of the study weren’t all negative, however. It did show that while unemployment in the region is up, the people who are working saw their wages rise along with the national average.

The per capital person income average grew from $27,280 to $34,139 from 2001 to 2009. The 25 percent growth is right in line with the national average and higher than the state average of 19 percent.

The study also revealed that the five areas that have shown the most growth in the past 10 years (in order of total overall dollars of growth) are ambulatory health care services (76 percent), which is basically all medical except hospitals, primary metal manufacturing (34 percent), local government (19 percent), hospitals (40 percent) and professional, scientific and technical services (36 percent).

The five areas that suffered the largest decline during the same period (in order of most overall dollars lost) were building construction (14 percent), real estate (22 percent), gasoline stations (21 percent), accommodations (35 percent) and car dealerships (9 percent).

 

 

Posted 11/4/2011