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Last modified: Wednesday, August 4, 2004

New report reveals what Hoosiers are driving

IN Context also goes inside the numbers on the life sciences

BLOOMINGTON, Ind. -- According to a new report published by Indiana University's Kelley School of Business, there were fewer automobiles registered by Hoosiers last year, when Indiana recorded its largest yearly decline in car registrations.

The article in IN Context also provides a Hoosier answer to a hotly debated question among barber shop customers, race fans and others -- Ford or Chevy? In 78 of Indiana's 92 counties, the most popular ride was a Chevrolet. Statewide, 17.9 percent of Hoosiers owned a Chevrolet and 14.9 percent owned a Ford.

IN Context is published by the Kelley School's Indiana Business Research Center in partnership with the Indiana Department of Commerce.

Given Indiana's long-standing ties to the auto industry, it shouldn't be a surprise that the most common Hoosier-owned cars statewide -- 66.7 percent -- are made by U.S. automakers. The highest concentration of Chevrolets was in east central Indiana. For example, in Madison County, 29 percent of residents owned a Chevy. Fords were notably prevalent in southeastern Indiana, in the Louisville metro area.

With regard to foreign auto companies, Toyota was the seventh-most-popular car brand, owned by just 4.6 percent of Hoosiers. It was followed closely by Honda at 4.5 percent.

Last year, there were 186,314 fewer vehicles registered, a decline of 3.2 percent. Nearly 90 percent of the decline can be attributed to the decline in passenger car registrations, according to author Amber Kostelac, IBRC data manager.

"Fewer registrations are likely due to an over-saturated market and the economic uncertainty that weighed on consumers throughout 2003," Kostelac wrote. "Excise taxes in Indiana may also have played a part as people registered only the cars they must use for their transportation needs and excluded vehicles used strictly for recreation."

Anecdotal evidence suggests that some Hoosiers register their cars out of state or keep another state's registration after moving to Indiana, to avoid excise taxes. For example, Utah reported in 2001 that $2.8 million in state revenue is lost annually for these reasons.

New registrations for 2003 and 2004 model-year cars dropped by 10.2 percent, or 25,501 cars, between 2002 and 2003. Car registrations exclude trucks and sport utility vehicles registered as trucks.

"The fact that Hoosiers bought or leased fewer new cars in 2003 may be due to a wait-and-see attitude as economic uncertainty remained high and consumer confidence remained low," Kostelac said.

On the other hand, registrations for 2000, 2001 and 2002 model-year cars rose by 11,108, the largest yearly increase since 2000. Hoosiers may have found cars just coming off leases to be good buys, and some of these cars could have been in dealers' inventories and newly purchased. They also could have been owned by some of the 12,166 people who migrated into Indiana between 2002 and 2003.

Longer-term financing also seemed to keep Hoosiers from switching vehicles. Seventy-two percent of registered cars had a vehicle year of 1999 or earlier.

Truck registrations accounted for nearly a quarter of all vehicle registrations in Indiana, and some included the popular SUVs. Kostelac analyzed U.S. Census Bureau data and reported that the numbers of SUVs in Indiana rose by 105 percent between 1997 and 2002. Of total 2002 truck registrations in Indiana, 25 percent were SUVs and 46 percent were pickup trucks.

An early report card on the life sciences

The role of the life sciences in Indiana's future has been well documented. A report in the new issue of IN Context offers an early report card about how well the state is doing with regard to job creation in this important industry.

In his article, "Life Sciences in Indiana: Current Trends by Sector," Ted Jockel, senior economist at the Indiana Department of Commerce, noted Indiana's strengths in life sciences manufacturing. The state employs nearly 5 percent of all Americans in life sciences manufacturing and has seen a 6.7 percent increase in job growth since 2001. At the same time, the nation experienced a 1.2 percent decline in this category.

Here are highlights from Jockel's report:

-- Indiana jobs in medical equipment and supplies have risen by 11.3 percent or 1,500 jobs since 2001, compared to a U.S. decline of 2.1 percent.

-- The Hoosier state accounted for one in eight net jobs added to national pharmaceutical and medicine employment since 2001. In 2002, Indiana ranked seventh in combined pharmaceutical medicine manufacturing and fifth when pharmaceuticals were ranked alone.

-- The state ranked seventh in agricultural chemical manufacturing -- fertilizers and pesticides -- with a 5.6 percent share of U.S. jobs, but had few jobs in other basic organic chemical manufacturing.

-- In the area of medical equipment and supplies manufacturing, Indiana did well, particularly with regard to surgical tools and orthopedic devices, ranking fifth in both categories.

"While many states saw job declines during the last recession, Indiana continued to experience job growth in both sectors," he wrote. "This growth has been steady over the past decade, and there is no reason that Indiana's rankings in these areas should not continue to climb."

-- Three areas for improvement included businesses in distribution; physical, engineering and biological research; and medical and diagnostic laboratories.

"Considering the fact that many wholesale operations locate near their customers, Indiana's jobs (in distribution) as a share of the United States is below the state's share of the national population. The fact that Indiana is a major producer of medical equipment only adds to the mystery," Jockel said.

"The importance of this sector is best illustrated by wages. The average annual U.S. wage for the wholesale sector in 2002 was $49,241, while it was $62,858 for medical equipment wholesalers and $70,083 for druggists' goods wholesalers."

IN Context is published every two months and is circulated in print to Indiana business leaders and state and local governmental officials. It is available free of charge on the Web at http://www.ibrc.indiana.edu/incontext/. In addition, the IN Context Web site offers access to articles in previous issues on the Indiana economy, county profiles and links to useful resources.