Economy of Indiana

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Economy of Indiana
2002 IN Proof.png
Output and standard of living
Gross state product $275,676 million[1]
Income per capita $34,943[2]
Labor force
Labor force size 3,144,700 [3]
Unemployment rate 6.9%[4]
Inequality and poverty
Gini index 0.434[5]
Poverty rate 13.1%[6]
Public sector
State budget expenditures $13,036 million[7]
Tax revenue $13,796.427 million[8]

The total gross state product in 2005 was US$214 billion in 2000 chained dollars.[9] Indiana's per capita income, as of 2005, was US$31,150.[10] A high percentage of Indiana's income is from manufacturing.[11] The Calumet region of northwest Indiana is the largest steel producing area in the U.S. Steelmaking itself requires generating very large amounts of electric power. Indiana's other manufactures include pharmaceuticals and medical devices, automobiles, electrical equipment, transportation equipment, chemical products, rubber, petroleum and coal products, and factory machinery.

History[edit]

Indiana's earliest economy revolved around trade with the Native American tribes in the northern and central parts of the state, which were connected by rivers to the Great Lakes, and ultimately the Atlantic. The state government established a trading monopoly with the tribes who became the primary purchasers of Indiana settler's goods. Although the basis was established in the Northwest Ordinance[12] and well known, economic growth was slow to begin in the state, primarily due to the inability to ship goods to market affordably. After the Mississippi River was opened to American traffic following the Louisiana Purchase, agricultural grew rapidly in the state, but was still hampered by the lack of internal transportation in the state.[13]

The Indiana General Assembly attempted to remedy the transportation system in the late 1810s, but was thwarted by the Panic of 1819 which caused the state's only two banks to collapse. A second attempt was launched in the early 1830s leading to the passage of the Mammoth Internal Improvement Act. This state-funded development of canals, railroads and roads statewide resulted in a large rise in land and produce values, but it too was thwarted by the Panic of 1837; although this spending bankrupted the state, the foundation it provided allowed Indiana to grow into one of the leading farming states by the 1850s.

The 1860s and the American Civil War led to the rapid completion of the state's railroad system and the growth of small industry. Building railroad cars and glass manufacturing became the state early leading industries, established primarily in the central parts of the state. Southern Indiana, however was adversely affected by the war and never regained it economic dominance in the state. Prior to the war, the largest cites were along the Ohio River and had a thriving trade with the south and large ship building centers that languished in the war. In most of the state, the war led to a rise in the value of farm produce and significantly raised the state's standards of living.[14]

Economic Stimulus plan[edit]

Indiana got its share in the economic stimulus plan suggested by president Barack Obama, receiving about $4.3 billion:[15] divided:

  • $1.3 billion for education
  • $1.4 billion for Medicaid
  • $658 million for state and local transportation and/or infrastructure projects
  • $100 million for housing
  • $100 million for water quality
  • $400 million for nutrition
  • $70 million for energy
  • $70 million for employment services
  • $40 million for child care
  • $40 million for justice-related projects

Fiscal Policy[edit]

Sectors[edit]

Energy[edit]

Sources of energy (2009) See below Navbox for individual facilities.
Fuel Capacity Percent of Total Consumed Percent of Total Production Number of Plants/Units
Coal 22,190.5 MW 63% 88.5% 28 Plants
Natural Gas 2,100 MW 29% 10.5% 15 Facilities
*Often used in Peaking Stations
Wind
(Currently The fastest growing form of energy in Indiana)
1,036 MW
1,836.5 MW
when all current wind farms are complete
 ?  ? 4 Farms
appx 1,000–1,100 Towers total
Coal Gasification 600 MW  ?  ? 1 Facility under Construction
Petroleum 575 MW 7.5% 1.5% 10 Units
Hydroelectric 64 MW 0.0450% 0.0100% 1 Plant
Biomass 28 MW 0.0150% 0.0020% 1 Facility
Wood & Waste 18 MW 0.0013% 0.0015% 3 Units
Geothermal and/or Solar 0 MW 0.0% 0.0 No Facilities at this time
Nuclear 0 MW 0.0% 0.0 12 facilities just completed
Total 22,797.5 MW
* only includes top number of wind
100% 100% 46 Generating Facilities

Oil, natural gas, and coal[edit]

Renewable[edit]

Hydro[edit]

Indiana has six hydroelectric dams. The Norway and Oakdale Dams near Monticello provide electrical power, recreation, and other benefits to local citizens. The Norway Dam created Lake Shafer and the Oakdale Dam created Lake Freeman. The Markland Dam, on the Ohio River, near Vevay, Indiana also produces electricity. The city of Wabash was the first electrically lighted city in the country.

Biofuels[edit]

Indiana is becoming a leading state in the production of biofuels, such as ethanol and biodiesel. Indiana now has 12 ethanol and 4 biodiesel plants located in the state.[16] Reynolds, located north of Lafayette is now known as BioTown, USA. The town is experimenting with using biofuels and organic fuels, such as those made with manure, to power the town.[17]

Solar[edit]

Solar power is being investigated. As of early 2010, Indiana has no large-scale solar power facilities.

Wind[edit]
Further information: Wind power in Indiana

Commercial wind power in Indiana began in 2008 when the Benton County Wind Farm came online. New estimates of wind resources in 2006 raised the potential wind power capacity for Indiana from 30 MW at 50 m turbine hub height to 40,000 MW at 70 m, which could double at 100 m, the height of newer turbines.[18] At the end of June, 2008, Indiana had installed 130 MW of wind turbines and had under construction another 400 MW.[19] As of 31 December 2009, Indiana had a total of 1035.95 MW of wind power nameplate capacity installed,[20] with more under construction or in planning.[21]

Geothermal[edit]

As of March 2008 Indiana has no geothermal electrical power generation facility. The Indiana Geological Survey was conducting a study to catalogue all potentially exploitable sources of geothermal heat in the state.[22]

In 2010, the Indiana Heating and Air-Conditioning Incentive Program (IHIP) provides rebates of up to $1000 for the purchase and installation of Energy Star-rated geothermal heat pumps.[23]

One of the largest geothermal heat pump systems in the United States is a GeoExchange pond coupled loop system by Geothermal Design Associates at the St. Joseph Medical Center in Fort Wayne.[24]

Agriculture[edit]

Pharmaceuticals & Medical Devices[edit]

Indiana is home to the international headquarters of pharmaceutical manufacturer Eli Lilly in Indianapolis, the state's largest corporation. Evansville is home to Mead Johnson Nutritionals, a subsidiary of Bristol-Myers Squibb, another large producer. Elkhart has also had a strong economic base of pharmaceuticals, though it has decreased over with the closure of Whitehall Laboratories in the 1990s and of the large Bayer complex, announced in late 2005.[25] Overall, Indiana ranks fifth among all U.S. states in total sales and shipments of pharmaceutical products and second highest in the number of biopharmaceutical related jobs.[26] Warsaw is dubbed the "Orthopedic Capital of the World"; the Warsaw region is home to nearly one-third of the $38 billion global orthopaedic industry [1] including Zimmer, Biomet and DePuy. Other medical device companies include Roche Diagnostics in Indianapolis, and Cook in Bloomington.

Mining[edit]

In mining, Indiana is probably best known for its decorative limestone from the southern, hilly portion of the state, especially from Lawrence County. One of the many public buildings faced with this stone is The Pentagon, and after the September 11, 2001 attacks, a special effort was made by the mining industry of Indiana to replace those damaged walls with as nearly identical type and cut of material as the original facing.[27] There are also large coal mines in the southern portion of the state. Like most Great Lakes states, Indiana has small to medium operating petroleum fields; the principal location of these today is in Southwestern Indiana, though operational oil derricks can be seen on the outskirts of Terre Haute.

See also[edit]

Notes[edit]

  1. ^ http://research.stlouisfed.org/fred2/graph/?id=INNGSP
  2. ^ http://research.stlouisfed.org/fred2/graph/?id=INPCPI
  3. ^ http://research.stlouisfed.org/fred2/data/INLFN.txt
  4. ^ http://research.stlouisfed.org/fred2/data/INUR.txt
  5. ^ http://factfinder.census.gov/servlet/DTTable?_bm=y&-context=dt&-ds_name=ACS_2009_1YR_G00_&-_geoSkip=0&-CONTEXT=dt&-mt_name=ACS_2009_1YR_G2000_B19083&-tree_id=307&-_skip=0&-redoLog=false&-geo_id=04000US01&-geo_id=04000US02&-geo_id=04000US04&-geo_id=04000US05&-geo_id=04000US06&-geo_id=04000US08&-geo_id=04000US09&-geo_id=04000US10&-geo_id=04000US11&-geo_id=04000US12&-geo_id=04000US13&-geo_id=04000US15&-geo_id=04000US16&-geo_id=04000US17&-geo_id=04000US18&-geo_id=04000US19&-geo_id=04000US20&-geo_id=04000US21&-geo_id=04000US22&-geo_id=04000US23&-geo_id=04000US24&-geo_id=04000US25&-geo_id=04000US26&-geo_id=04000US27&-geo_id=04000US28&-geo_id=04000US29&-geo_id=04000US30&-geo_id=04000US31&-geo_id=04000US32&-geo_id=04000US33&-geo_id=04000US34&-geo_id=04000US35&-geo_id=04000US36&-geo_id=04000US37&-geo_id=04000US38&-geo_id=04000US39&-geo_id=04000US40&-geo_id=04000US41&-geo_id=04000US42&-geo_id=04000US44&-geo_id=04000US45&-geo_id=04000US46&-geo_id=04000US47&-geo_id=04000US48&-geo_id=04000US49&-geo_id=04000US50&-geo_id=04000US51&-geo_id=04000US53&-geo_id=04000US54&-geo_id=04000US55&-geo_id=04000US56&-geo_id=04000US72&-search_results=01000US&4-_showChild=Y&-format=&-_lang=en&-_toggle=
  6. ^ http://www.census.gov/compendia/statab/2011/ranks/rank34.html
  7. ^ http://nasbo.org/LinkClick.aspx?fileticket=w7RqO74llEw%3d&tabid=79
  8. ^ http://www.census.gov/govs/statetax/1015instax.html
  9. ^ Bureau of Economic Analysis: Gross State Product
  10. ^ Bureau of Economic Analysis: Annual State Personal Income
  11. ^ "Indiana Economy at a Glance". U.S. Bureau of Labor Statistics. Retrieved 2007-01-11. 
  12. ^ Northwest OrdinanceArt 4: "The navigable waters leading into the Mississippi and St. Lawrence, and the carrying places between the same, shall be common highways and forever free, as well to the inhabitants of the said territory as to the citizens of the United States, and those of any other States that may be admitted into the confederacy, without any tax, impost, or duty therefor."
  13. ^ Gray, p. 3–4
  14. ^ Gray, p. 202
  15. ^ Council of State Governments
  16. ^ Biofuels Indiana
  17. ^ About BioTown
  18. ^ Indiana's Renewable Energy Resources Retrieved 20 August 2008
  19. ^ U.S. Wind Energy Projects - Indiana Retrieved 20 August 2008
  20. ^ "U.S. Wind Energy Projects - Indiana". American Wind Energy Association. 2009-12-31. Retrieved 2010-03-12. 
  21. ^ "Indiana Office of Energy Development - Wind Power". IN.gov - Official Website of the State of Indiana. Retrieved 2010-03-23. 
  22. ^ "IGS to play key role in search for renewable geothermal energy". Indiana Geological Survey. Retrieved 2010-03-23. 
  23. ^ Coggeshall, Wade (2010-02-03). "State offers heating, cooling system rebates". Indiana Economic Digest. Retrieved 2010-03-23. 
  24. ^ "Du Pont Medical Center: Fort Wayne, Indiana, from Geothermal Heat Pump Consortium - Business White Papers, Webcasts and Case Studies". BNET. Retrieved 2010-03-23. 
  25. ^ WNDU-TV: News Story: Bayer is leaving Elkhart - November 16, 2005
  26. ^ "Economy & Demographics". Terre Haute Economic Development Co. Retrieved 2007-01-30. 
  27. ^ Pentagon Renovation Program

References[edit]

External links[edit]