Media Coverage
June 15, 2011
Indiana Regaining Mojo in a Ho-Hum Economy
The 2011 edition of State of Our Business: Perspective From Indiana Executives provides still more proof that the Indiana economy is in the midst of a recovery that is leading the Midwest and could be among the most impressive in the nation.
Given the sputtering national recovery that may not be saying much, but efforts to grow and diversify the Hoosier economy are paying off. And people are noticing.
Our 5th annual CEO report, a partnership with Ice Miller LLP and Butler University, surveyed the attitudes of more than 700 CEO's and senior leaders from throughout Indiana. And even with the constant flow of news detailing the weak national recovery, soaring oil prices and the possibility of a "double dip" recession, it is clear that corporate confidence is on the rise in Indiana. In fact, this year's report shows a level of confidence that has not been seen since we launched the survey in 2007.
Improving business confidence is one of several findings in the year's survey which point to an improving state economy:
- Fewer business leaders intend to outsource work, but rather plan to add jobs in 2011, with large companies being the most likely to lead the way;
- Perceptions of Indiana's infrastructure and overall business environment have risen significantly since 2010;
- Executives also believe the state is better positioned to encourage business growth than a year ago.
The positive tone of this year's survey comes as Indiana continues to make headlines for economic progress and a business climate that has helped land some big deals as other states spin their wheels.
Chief Executive magazine ranked the business climate in Indiana the best in the Midwest and sixth best in the nation.
The U.S. Bureau of Economic Analysis reported Indiana's 4.6% increase in Gross Domestic Product in 2010 was third best in the nation, easily outperforming the national rate of 2.6%.
The state's fiscal health and economic diversity were among areas noted in Standard and Poor's decision to affirm Indiana's AAA credit rating. And unemployment, while still higher than any of us would like, continues to be a full point below the national average.
As Indiana Governor Mitch Daniels said in an interview with Inside INdiana Business, "technical definitions don't mean much with so many Hoosiers still looking for work." But he added, "by any measure, Indiana is leading the nation on the way back."
The Hoosier comeback is being fueled by gains in manufacturing. We have seen news of Cummins, Inc. adding 600 jobs in Columbus, Honda Manufacturing of Indiana, LLC doubling its workforce in Greensburg to 2,000 and Chrysler Group LLC committing more than $1 billion to its Kokomo operations, the company's largest single investment in any North American community.
Indiana also continues to make major strides in establishing itself as a leader in life sciences and biotechnology, distribution and logistics and medical devices, thanks to the efforts of organizations like BioCrossroads, Conexus Indiana and OrthoWorx.
In a column I wrote for InsideINdianaBusines.com late last year, I predicted that in 2011 leadership, courage and vision would determine whether the Indiana economy would move forward or fall behind.
Indeed, in a legislative session that was frustrating and, at times, down right embarrassing, leadership did emerge and lawmakers took steps to help Indiana standout as a place to grow business.
While neighboring Illinois made national headlines for substantially raising taxes on businesses and individuals, the Indiana Legislature passed a reduction in the state's corporate income tax rate, from 8.5% to 6.5% (a 25% cut). It's worth noting that the Indiana Economic Development Corporation reports that about one-third of the deals it has closed this year have a connection to our neighbors to the west.
Governor Daniels also signed into law bills representing the most aggressive education reform agenda in nearly 25 years.
To be sure, Hoosier executives have concerns. Health care costs and how health care will be funded were identified in the survey as areas that could negatively impact business and the economy. CEOs also continue to be worried about the quality of public K-12 education. And there are growing concerns about the availability of trained workers, which is linked directly to education.
But right now, Indiana appears to have momentum that others don't. And in a state that has long had an inferiority complex, there actually appears to be some confidence for a change.
I would submit our greatest challenge is to continue to pursue the initiatives and changes in our culture that have yielded success in recent years. To support innovation and entrepreneurs, life long learning and a culture that is less resistant to change (remember Daylight Saving Time?).
And, most importantly, to believe in ourselves.
