Report: Indy tops Midwestern cities in three-year GDP growth
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The Indianapolis metropolitan area surpassed its Midwestern peers in gross domestic product growth from 2019 to 2022, according to a report from a Washington, D.C.-based economist.
In a graphic posted on X, economist Joseph Politano showed Indianapolis outperforming peer cities including St. Louis and Cincinnati, as well as larger metropolitan areas like Minneapolis-St. Paul and Chicago. Using data from the U.S. Bureau of Economic Analysis, Politano found that the Indianapolis metro’s GDP grew by $12.1 billion, or 8.4%, during that period.
The calculation was made using chained 2017 dollars, a measure which calculates “as if everything is at 2017 prices” in order to adjust for inflation, Politano told IBJ.
The post garnered attention from local officials and celebrities, from Indianapolis Mayor Joe Hogsett to Indianapolis-based author John Green. By midday Thursday, it had been viewed by nearly 370,000 users.
Where other Midwestern metros had modest GDP increases, Indianapolis was an outlier.
“[Indianapolis] was like a bright spot in what is otherwise like a pretty gloomy recovery for the Midwest as a whole,” said Politano, who was a financial management analyst at the Bureau of Labor Statistics before starting his Apricitas Economics newsletter.
The GDP increase in Indianapolis was mostly stirred by white collar jobs, followed by construction. These industries have increased hiring over the past few years, Politano said, but both have slowed down.
The Indianapolis metropolitan area includes suburbs. But, Politano said the bulk of the area’s GDP growth came from its core, with roughly two-thirds from Marion County.
Local business leaders told IBJ the data is a credit to Indianapolis’ competitiveness among its peers.
Indy Chamber CEO Matt Mindrum said he was surprised by the magnitude of the metro’s growth, calling it a “tremendous validation of the work that’s been happening, and I think a tremendous indicator of what’s possible in the future.”
The growth wasn’t reliant on corporate giants such as pharmaceutical company Eli Lilly and Co., which Mindrum said was a credit to the breadth of local industries.
“It is pharmaceutical manufacturing, but it is more so professional services, finance, white collar jobs,” Mindrum said. “This is [spurred by] jobs, which I think is tremendous news, because if it’s jobs, it’s talent, and that is the kind of growth that’s going to be the most sustainable.”
The data also showed that Marion County was responsible for 25% of the state’s GDP growth, which Mindrum said is proof the state should “double-down” on the “economic driver,” or downtown Indianapolis. The economic enhancement district the state created for downtown Indianapolis is part of continuing that momentum, he said. The Indianapolis City-County Council approved the creation of the tax district last month.
It’s also proof to Mindrum that the metro’s fundamentals are solid.
“I don’t think we attracted that level of growth because Indianapolis across the country is perceived as the coolest and hippest place to be—I hope we’re going to get there over time—but I think this investment is business growth, this is talent growth.”
Gordon Hendry, managing director of real estate firm HRE, said the ranking “is really demonstrative of how Indianapolis is competing against our peer cities in the Midwest.” Outside of the Midwest, Seattle had a similar rate of GDP increase. Hendry said Indianapolis’ ability to compete with the base for tech giants including Amazon, Zillow and Microsoft shows Indy is excelling in the competitive landscape.
The graphic reflects “the Indianapolis story” of success despite the turbulence of the global pandemic, he added.
“We held our own, and rebounded strongly,” Hendry told IBJ.