Conexus Indiana Manufacturing Outlook Friday October 30, 2015 Presentation to Northwest Indiana Business Roundtable

Our Mission

To serve as the catalyst to position Indiana as the recognized global leader in the advanced manufacturing

and logistics sectors

Conexus Strategic Priorities

Attract and train a 21st century AML workforce

Workforce development identified as the top priority – employers need a new breed of skilled workers to grow/succeed

Industry also wanted an organization which could focus on broad issues of mutual concern – research, public policy, infrastructure

Support the sector via research, policy +

infrastructure programs

Advanced Manufacturing Jobs

• A NAM survey shows 600,000 jobs are unfilled today

• Indiana ranks 8th in manufacturing employment—522,220 people

• Manufacturing pays 40% more than the state’s average

Logistics Jobs

• Logistics employs approximately 300,000 Hoosiers.

• An estimated 75,000 more Hoosiers are employed in logistics positions by the state’s manufacturers.

• Logistics jobs, on average, pay 15% more than a private sector job.

State of Manufacturing and Logistics

• 2015 Conexus Indiana Manufacturing and Logistics Report Card – Ball State University Center for Business and Economic Research (CBER)

• Manufacturing Industry Health was rated an A

– Surrounding states: Illinois received an C; Kentucky received an B+; Michigan received an A; Ohio received an B; and Wisconsin received an B+

• Logistics Industry Health was rated an A

– Surrounding states: Illinois received an A; Kentucky received an B; Michigan received an C; Ohio received an A; and Wisconsin received an B

State of Manufacturing and Logistics

• According to an article in the Indianapolis Star, more than 30% of Indiana’s gross product is manufacturing, placing Indiana ahead of all other states.

• Indiana’s roots in manufacturing and state climate for business makes it “one of the most viable states for production”.

• According to the Indianapolis Business Journal, “U.S. manufacturing production fell for the second straight month in September”

• According to the same article, this decline suggests that “a strong dollar, weak overseas economies, and cautious U.S. consumers are holding back factory outputs”.

Manufacturing Survey• According to Katz Sapper & Miller’s 2015 Indiana Manufacturing

Survey:

– Indiana’s manufacturers believed that their business has returned to a financial state similar to that of 2010-11

– 35% of Indiana manufacturers have reported their businesses as “stable”

– 27% of Indiana manufacturers reported their businesses as “challenged”, the highest level since the KSM 2009-2010 Indiana Manufacturing Survey

– In 2014, more onshoring due to high fuel prices

– In 2015, less onshoring due to lower fuel prices

– However, according to an article in the Indianapolis Star, the chief economist at the National Association of Manufacturers said that, “Indiana has thrived since the great recession. Indiana was slow to recover but is doing well today”

– Indiana leads the nation in manufacturing employment—almost 17% of the state’s workforce is employed by manufacturers

– Conflicting data between survey and data

Manufacturing Survey v. Data

Challenges Identified by Manufacturing Survey

• Federal Regulatory and Tax Concerns

• 88% of respondents believe that the federal government is not supportive of U.S. manufacturing as a whole

• However, 81% of respondents do believe that Indiana’s state government is doing a good job of supporting Hoosier manufacturing

• Corporate tax policy is the main concern amongst those in today’s manufacturing industry

• This priority is followed by labor laws, infrastructure and logistics and property taxes

• Indiana manufacturers continue to make smart, strategic investments

• Indiana manufacturers continue to adopt advanced methods, such as process improvement programs like Lean and Six Sigma.

• Concerns with energy costs and skilled workers

• Facilitating internship programs is the best way to educate students about career opportunities in manufacturing

• A call to action for policy makers:

– Positive policies that support Indiana’s manufacturers

– Keeping taxes competitive

– Elimination of the workforce shortage and skills gap

Outlook Identified by Manufacturing Survey

For more information, please contact David Holt, at (317) 638-2104, Dholt@conexusindiana.com,

or visit ConexusIndiana.com

Questions & Answers?