Radius Indiana Develops Manufacturing Index to Track Regional Economic Trends
11/1/2016 12:00:00 AM
Bedford, Ind. (Nov. 1, 2016) — Radius Indiana today announced its new tool, the Radius Manufacturing Index,
to measure the strength of the manufacturing industry in the region, and reports the RMI shows that the traditionally strong region for manufacturing continues to outpace the state and nation in terms of manufacturing strength.
The RMI was developed in collaboration with Thomas P. Miller & Associates and is an instrument that provides cumulative information about 12 facets of the manufacturing cluster — a hallmark of the Radius region that has never been detailed and tracked at this level for the region. Data was examined for 2013-2015 to create a baseline for subsequent indices, which Radius plans to monitor quarterly.
Among the best news that the RMI provided was that manufacturing jobs in the Radius region have increased by 2,734 in the past five years.
Manufacturing’s strength in the area is reflected in the potency of the Radius region’s Location Quotient for manufacturing, which is a widely used measurement of the comparative strength of the region compared to the national average. The Radius region’s LQ for manufacturing is 2.82, meaning that the industry cluster is 2.8 times more prevalent in the area than the national average.
“Indiana remains the top manufacturing state in the country. The reasons for the success are multifaceted; however a leading factor is because of the strength of the manufacturing sector in Southern Indiana. It helps drive Indiana's economy through innovation and productivity. The new Radius Manufacturing Index will serve as a valuable economic dashboard to help guide future investment and growth,” said Brian Burton, president and CEO, Indiana Manufacturers Association.
The RMI also shows how the region is performing in comparison to the state of Indiana. Radius is nearly 1.6 percent times as manufacturing intensive as Indiana overall, and productivity rose 4.4 percent in the region compared to the state’s 1.5 percent increase from 2013 to 2015.
“Our company has a long history of manufacturing in the Radius Indiana region. We appreciate seeing this tool validate our belief in the manufacturing skills and capability that continue to define the regional workforce. It calls attention to what our customers tell us; the people in Dubois County and nearby communities are talented in designing, producing and delivering high quality and complicated products,” Lonnie Nicholson, vice president and chief administrative officer of Kimball International in Jasper said. “We are interested in seeing how this tool can help us track and forecast trends in the manufacturing sector, drive continuous improvement, and position our company as the employer of choice, the manufacturing industry as the career of choice, and the Radius region as the location of choice.”
Some components of the RMI did show a decline; the number of manufacturing establishments declined by one in the last quarter of 2015, falling from 350 to 349, and the five-year-average manufacturing wage grew at a slower rate than the previous year.
The raw number of the RMI is 57.5 for the end of 2015, which represents the total scores of the 12 factors included in the index. By comparison, the RMI score at the end of 2013 was 45.7 and 58.7 for 2014. The index figures for the state of Indiana followed the same pattern, growing from 43.6 in 2013 to 57.6 in 2014, and 56.6 in 2015.
“We developed this index to allow us to look at trends in manufacturing in the Radius region,” said Radius President Jeff Quyle. “We now have this new tool that will allow us to monitor changes in the manufacturing environment that have never been studied at this level. We will have the ability to adjust our economic development strategies to address market place dynamics.”
Radius will monitor the components of the RMI to watch for changes in the manufacturing industry, and to inform industry leaders and policy makers about the changes that occur. The RMI is the first of three indices being developed by Radius to help inform the region about its economic strengths.
ABOUT RADIUS INDIANA: Radius Indiana is a regional economic development partnership representing eight counties in Southern Indiana: Crawford, Daviess, Dubois, Greene, Lawrence, Martin, Orange, and Washington. Formed in 2009, Radius Indiana also serves as a point of contact in Indiana for Naval Support Activity Crane and leads regional collaboration by leveraging the diverse assets of the region to drive attraction, retention and expansion of business, thereby increasing employment and investment opportunities and quality of life within the region.