A publication of the Indiana Business Research Center at IU's Kelley School of Business
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Region Four: West Central Indiana

The Area

Region 4 borders Illinois, is slightly northwest of Indianapolis and is almost due south of the Chicago/Gary CMSA. It is comprised of eight counties: Benton, Carroll, Clinton, Fountain, Montgomery, Tippecanoe, Warren and White. The hub and driving influence of this region is the Lafayette Metropolitan Statistical Area (MSA), comprised of Clinton and Tippecanoe counties.

Population

By 2000, the population of Region 4 had grown to 301,676-a 10.3 percent increase from 1990. Growth during that time was centered in Tippecanoe County (14.1%). At the other end of the spectrum, Benton County declined in population by 0.2 percent (20 people) between 1990 and 2000.

The Lafayette MSA had a total of 182,821 people, accounting for 60.1 percent of the region's population in 2000 (see Figure 1). The MSA accounted for 75.4 percent of all the population growth in Region 4, increasing by 13.2 percent during the 1990s. As the arrows in Figure 1 indicate, commuting patterns show that Tippecanoe County is also a job hub.

Figure 1: Population Density and Commuting Patterns

Industrial Mix, Jobs and Wages

This region is closely associated with Purdue University, which exerts a positive influence on the area as one of the state's largest universities and part of the Big Ten. In the 1980s, the arrival of the Subaru-Isuzu Automotive plant strengthened this region's manufacturing base. Today, a large number of well-known manufacturing businesses are in the area, including: Aluminum Co. of America; Bioanalytical Systems; Caterpillar Inc.; Eli Lilly; Fairfield Manufacturing; Great Lakes Chemical Corp; Lafayette Venetian Blind; Perry Chemical; Rohn Industries, Inc.; Staley Manufacturing; and Wabash National.

Table 1 contains data from the third quarter of 2001, comparing employment and wages by industry for both the state and the region. The balance of industries in Region 4 closely mirrors the industrial mix of the entire state, resulting in a fairly stable regional economy.

Table 1: Average Employment and Earnings for Third Quarter 2001

Services employment accounted for 31.4 percent of all non-farm employment in this region, followed by manufacturing (25.5%) and retail trade (18.7%). These three industries accounted for 97,331 jobs or 75.5 percent of the total employment (see Figure 2).

Figure 2: Region 4's Industry Breakdown

The number of jobs in Region 4 grew throughout the 1990s. In fact, the Lafayette MSA has outperformed Indiana in the percent of employment growth since 1996.

From April 1996 to April 2002, Indiana's total industry employment increased 3.5 percent. In contrast, the Lafayette MSA experienced a 6.6 percent increase in employment-nearly twice the state's gain.

Throughout Indiana, the most significant job gains were in the services industry, where employment jumped 16.1 percent. But in the Lafayette MSA, the largest gain was an 18.1 percent increase in government employment (public administration). Employment growth also occurred in Service Producing (8.1%) and Finance, Insurance and Real Estate (5.4%). Opposite to most cited trends, manufacturing employment in the Lafayette MSA grew 0.5 percent while the state encountered an 8.3 percent decline overall.

Region 4 has consistently had unemployment rates below both the U.S. and the state (see Figure 3). During the last few years, employers in the region began actively recruiting workers from not only surrounding counties, but from other parts of the state because of the extremely low unemployment in the region.

Figure 3: Unemployment Comparisons

The substantial presence of manufacturing firms in Region 4, combined with a balanced industrial mix, is a primary factor causing this area to out-perform other areas of the state and consistently have low unemployment rates.

Rachel Justis
Research Associate, Indiana Business Research Center, Kelley School of Business, Indiana University