Economy of Indiana facts for kids
Indiana State Quarter
|
|
| Statistics | |
|---|---|
| GDP | $352,272.7 million |
|
GDP per capita
|
$43,492 |
|
Population below poverty line
|
13.1% |
| 0.434 | |
|
Labor force
|
3,144,700 |
| Unemployment | 3.9% |
| Public finances | |
| Revenues | $13,796.427 million |
| Expenses | $13,036 million |
The economy of Indiana is all about how people in the state make and spend money. In 2017, Indiana's total economic output, called its gross state product, was about $359 billion. This means the state produced goods and services worth that much. The average income per person was around $44,165. A big part of Indiana's economy comes from making things, especially in factories.
Indiana has been the top state for making steel in the U.S. since 1975. The Calumet Region in northwest Indiana is a huge steel-making area. It produces 27% of all U.S. steel! Indiana is also the second-largest state for making cars. Other important things made in Indiana include medicines, medical tools, electrical gear, and chemical products.
Contents
History of Indiana's Economy
Indiana's first economy involved trading with Native American tribes. Rivers connected these tribes to the Great Lakes and the Atlantic Ocean. This made trade easier. The state government even had a special trading system with the tribes.
At first, Indiana's economy grew slowly. It was hard to send goods to markets cheaply. After the Louisiana Purchase, the Mississippi River opened for American trade. This helped farming grow fast in Indiana. But it was still tough to move goods within the state.
In the 1810s, Indiana tried to improve its transportation. But a money crisis in 1819 caused the state's banks to fail. Another try happened in the 1830s with the Indiana Mammoth Internal Improvement Act. This plan used state money to build canals, railroads, and roads. Land and farm product values went up a lot. However, another money crisis in 1837 stopped this growth. Even though it left the state in debt, it helped Indiana become a top farming state by the 1850s.
The Civil War in the 1860s quickly finished Indiana's railroad system. It also sped up the growth of factories. Making railroad cars and glass became early leading industries. These were mostly in central Indiana. Southern Indiana, however, struggled after the war. Before the war, its biggest cities were along the Ohio River. They had strong trade with the south and big shipbuilding centers. The war hurt these areas. For most of the state, the war made farm goods more valuable. This improved people's lives.
The Indiana Gas Boom started in the 1880s and lasted until 1910. During this time, a lot of natural gas was found and used in east-central Indiana. The Ball Corporation moved to Muncie, Indiana to use this cheap gas. They built a glass factory there and became very famous in Muncie.
In the early 1900s, Indiana quickly became a manufacturing leader. Steel, oil refining, and car companies set up shop. They used Indiana's central location, cheap land, and lower costs. Huge steel mills were built in cities like East Chicago and Gary. Smaller mills appeared in Muncie and Indianapolis. Railroads, like the famous Monon Line, crossed the state.
Indiana was a big manufacturing and farming state. So, it was hit very hard by the Great Depression in the 1930s. More than 25% of people were out of work in 1933. Some southern counties had over 50% unemployment. The state government changed a lot during this time. New leaders started public projects to help people find jobs.
During World War II (1939-1945), Indiana's factories worked extra hard. They made supplies for the war effort. Everyone found jobs, and the state became rich again. Indiana made 4.5% of all U.S. military weapons during the war. This ranked it eighth among all states.
After World War II, from 1945 to 1973, Indiana's economy did very well. Indiana was ranked 20th in personal income in the late 1960s. But after 1969, the manufacturing sector started to slow down. Competition from other countries, company mergers, and new machines led to job losses. Cities like Muncie, Gary, and Indianapolis saw fewer people and more unemployment. Northwest Indiana was especially affected by the steel crisis from 1974 to 1983.
Since the early 1990s, Indiana has changed its economy. It now focuses less on heavy industry. Instead, it has grown in services like banking, healthcare, and technology. In 2016, about 516,000 people worked in manufacturing. This was down from 750,000 in 1969. But it was up from 424,000 during the Great Recession in 2009. Heavy industries like oil and steel are still important. But other areas like medical equipment and medicines have also grown.
Key Economic Sectors
Energy Production
Indiana uses many different sources to create electricity.
Coal, Natural Gas, and Petroleum
Coal is a very important energy source in Indiana. Many power plants use coal to make electricity. Natural gas is also used, often in plants that can quickly start up when more power is needed. Petroleum is used for energy too, but less than coal or natural gas.
Renewable Energy
Indiana is also developing cleaner energy sources.
Hydroelectric Power
Indiana has six dams that use water to make electricity. The Norway and Oakdale Dams near Monticello are good examples. They create lakes and provide power for local people. The Markland Dam on the Ohio River also makes electricity.
Biofuels
Indiana is becoming a leader in making biofuels. These are fuels made from plants, like ethanol and biodiesel. Indiana has many plants that produce these fuels. For example, the town of Reynolds is known as BioTown, USA. It is trying to power itself using biofuels and organic fuels, even those made from manure.
Solar Power
Indiana is using more solar energy. In 2013, a 17.5-megawatt solar plant was built at the Indianapolis airport. This was the biggest airport solar farm in the U.S. at the time.
Wind Power
Commercial wind power started in Indiana in 2008. The Benton County Wind Farm was one of the first. Experts now think Indiana could produce a lot of wind power. By the end of 2009, Indiana had over 1,000 megawatts of wind power installed. More wind farms are being built or planned.
Geothermal Energy
Geothermal energy uses heat from deep inside the Earth. As of 2008, Indiana did not have any geothermal power plants. However, studies are looking into possible sources of geothermal heat. There are programs that offer rebates for people who install geothermal heat pumps in their homes. One of the largest geothermal systems in the U.S. is at the St. Joseph Medical Center in Fort Wayne.
Agriculture
Indiana is a major farming state. It is the eighth largest agricultural exporter in the country. In 2017, it exported over $4.6 billion in farm products. Indiana is the tenth largest farming state overall.
The top five farm products by value are:
- Corn: $3.28 billion
- Soybeans: $3.08 billion
- Meat animals: $1.62 billion
- Poultry and eggs: $1.18 billion
- Dairy: $750 million
Pharmaceuticals & Medical Devices
Indiana is a big center for medicines and medical tools. Eli Lilly, a huge medicine maker, has its main office in Indianapolis. Evansville is home to Mead Johnson Nutritionals, which makes nutritional products. Elkhart also used to have many medicine companies.
Overall, Indiana is fifth in the U.S. for selling pharmaceutical products. It is second in the number of jobs related to biopharmaceuticals. Warsaw, Indiana, is even called the "Orthopedic Capital of the World." This area makes almost one-third of the world's orthopedic products. Companies like Zimmer, Biomet, and DePuy are located there. Other medical device companies include Roche Diagnostics in Indianapolis and Cook in Bloomington.
Automotive Industry
Indiana's car industry is very strong. In 2013, it became the second-largest in the country for automotive economic output. Only Michigan was bigger. Many car parts and vehicles are made in Indiana.
Mining
Indiana is famous for its decorative limestone. This stone comes from the hilly southern part of the state, especially Lawrence County. Many famous buildings, like The Pentagon, are made with this stone. After the September 11, 2001, attacks, Indiana's mining industry worked hard to replace damaged walls with the same type of stone.
There are also large coal mines in southern Indiana. Like many states around the Great Lakes, Indiana has small to medium petroleum fields. Today, most of these are in Southwestern Indiana. You can even see oil derricks on the edges of Terre Haute.
See also
- List of U.S. states by GDP (nominal)
- Great Lakes Megalopolis
