INDIANA UPDATE:

IU REPORT: STUDY OF INCOME GROWTH INDICATES MIXED PICTURE FOR INDIANA

BLOOMINGTON, Ind. -- Despite continuing growth in the state's economy, a new Indiana University School of Business report indicates that several sectors of the state's economy have still not returned to levels they enjoyed in the nation in the late 1960s.

The August issue of Indiana Business Review Update charts the state's share of total U.S. earnings from wages, salaries and proprietors' income. Morton J. Marcus, director of the Indiana Business Research Center, prepared the comparative data.

After peaking in 1978, Indiana's economy went into a deep slump during the early 1980s. Overall, the state has recovered, as evidenced by an upward trend in Indiana's share of total earnings since 1988. But the IU report shows that several sectors, including construction, transportation and public utilities, have not regained the share they had in 1969 and 1970.

In the agricultural sector, the state's earnings have been very erratic, peaking in 1976, when Indiana's share accounted for nearly 4.5 percent of the national total, and bottoming out in 1983, when Hoosier farmers actually lost income as a group. By contrast, Indiana's share of agricultural services, forestries and fisheries has remained constant, at just over 1 percent. Marcus said the erratic nature of agriculture is often related to weather conditions.

In construction, Indiana builders and others associated with the trade have seen their share of earnings climb consistently since 1984, when the state's percentage was at its lowest, to nearly 2.45 percent in 1995. This remains far below pre-1970 levels of close to 3.75 percent.

A similar story can be told about manufacturing earnings. While the state has regained its 1979 share ­ about 3.75 percent of the U.S. total ­ it has yet to rebound to levels it enjoyed in the mid-1970s, when it topped out at 4.0 percent.

"I assume that this is due to restructuring, reclassification of jobs, decreased demand for certain products -- such as steel in autos -- and not just downsizing," Marcus said.

Indiana's share of income from both transportation and public utilities, which have never accounted for a large share of the national total, have consistently fallen since 1974 to about 1.9 percent today.

Wholesale and retail trade income in the state declined through most of the 1980s. Since 1988, both have regained some, but not all, of that lost ground. Today, Indiana's share of U.S. wholesale trade income is about 2.1 percent, and for retail trade, it is about 1.9 percent.

Personal and business services have shown less of a rebound. Indiana's share of government earnings has remained fairly stable, at close to 1.7 percent. More details about the state's economic performance, Indiana Business Review Update and other state data are available on the Indiana Business Research Center's Web site