Still the Most Manufacturing State

By Mercer Hale. From MFGCalcs Magazine, Issue 1, November 2026, page 54.

In 2025, before inflation, chemical manufacturing alone grew more than all of Indiana’s factories did together: by $4.6 billion, against $3.1 billion for the factories as a whole. Everything else they make, taken together, shrank. Even with inflation taken out, the factories still made more than in any other year since 1997, when the Bureau of Economic Analysis’ present series of state figures begins.

The same year set the opposite record. Of every dollar of value Indiana produced, counted in current dollars, about 24 cents came from a factory, the least in the bureau’s series; since 1997 the rest of its economy has grown faster. Indiana is still the most manufacturing state. What is changing is the kind of factory state it is, and that is news for its workers and suppliers.

In 2025 chemical manufacturing produced nearly twice as much as motor vehicles and parts, its widest lead since 2009, the year motor vehicle output fell by more than half while chemical manufacturing barely moved. That lead came from a collapse. This one came from growth.

The bureau names no companies, but the public record points the same way. In the Fed’s April Beige Book, manufacturing contacts in the Federal Reserve Bank of Chicago’s district, which covers most of Indiana, reported chemicals, plastics and rubber production up modestly on demand from the pharmaceutical and semiconductor industries. In May, in an Indiana Economic Development Corporation release, Eli Lilly and Company’s chair and chief executive, David A. Ricks, said of the drugmaker’s active-ingredient plant in Lebanon: “When our Lebanon API site opens in 2027, it will be the largest API production site in U.S. history, a commitment we chose to build here, at home.”

For workers, the rising industry is the smaller employer. In 2023 chemical manufacturing outproduced transportation equipment, which includes motor vehicles, with about a fifth as many employees (output by the Bureau of Economic Analysis’ count, employees by the Census Bureau’s), and transportation equipment had more than a quarter of the state’s factory employees.

Since 2022 Indiana’s motor vehicle and parts industry has made less every year, in current dollars, and so has its primary metals industry. Over those three years durable goods, which include both, slipped a little, while nondurable goods, chemical manufacturing among them, grew by about a quarter, to nearly half of factory output. For the machine shops that sell to the state’s motor vehicle or primary metals industries, the growth has been somewhere else.

In Elkhart, Bob Martin, president and chief executive of the recreational vehicle maker THOR Industries, said in its September results: “As the fiscal year progressed, heightened affordability concerns and increasing material costs resulted in significant pressure on our gross margins. We responded with restructuring actions and began evolving our North American RV operating model.”

The bureau’s industry figures stop at 2025. This year, steel sounds sturdier. “During the third quarter, the domestic steel market remained strong, supported by steady demand, low customer inventories, and historically low import levels,” Mark D. Millett, chairman and chief executive of Steel Dynamics, said in the Fort Wayne steelmaker’s October results. Yet a manufacturer in Indiana told the Federal Reserve Bank of St. Louis, for the Beige Book published in June, that customers were postponing large equipment purchases, citing economic uncertainty.

In 1997 chemical manufacturing and motor vehicles and parts each made about 5 cents of every dollar Indiana produced. In 2025 chemical manufacturing made about 7. Motor vehicles and parts made less than 4.

Live data from this story

• What Indiana Makes: Indiana manufacturing

Read it in the magazine

• MFGCalcs Magazine, Issue 1, November 2026, page 54