99 years of economic insights for Indiana

The IBR is a publication of the Indiana Business Research Center at IU's Kelley School of Business.

Executive Editor, Carol O. Rogers
Managing Editor, Brittany L. Hotchkiss

Indianapolis forecast 2024

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Executive Director, Indiana Business Research Center, Kelley School of Business, Indiana University

Economic activity

After the U.S. posts expected real GDP growth of 2.0% in 2023, growth is predicted to be slightly lower at 1.6% in 2024. The same numbers are 0.5% in 2023 and 0.3% in 2024 for Indiana and 0.6% in 2023 and 0.5% in 2024 for the Indianapolis metropolitan area. In a normal year, real GDP grows between 2.0% and 3.0%. National durable goods spending is expected to shrink between 2.5% and 3.0% at an annual rate during the first half of 2024. Because durable goods manufacturing represents a higher-than-average share of the state and metropolitan area economies, this shrinkage disproportionately impacts Indiana and Indianapolis and explains why they will grow more slowly than the nation in 2024.

On a per capita basis, real GDP in the Indianapolis metropolitan area is expected to fall by 0.2% in 2023 and 0.4% in 2024. This fall is mathematically explained by population growth that is slightly larger than real GDP growth. In economic terms, shrinkage in per capita real GDP confirms continued economic stagnation in Indianapolis. Between 2007 and 2021, per capita real GDP only grew 1.0% in the Indianapolis metropolitan area while it grew 6.6% in Indiana and 13.9% in the United States.1 Employment growth in Indianapolis is healthy, but disproportional expansion in low-wage jobs is the reason. A workforce with comparatively low educational and skill attainment does not deliver the productivity needed for high-paying jobs in the nation’s most competitive industries. Unless major regional investments in human capital are made, the Indianapolis metropolitan area faces a productivity crisis that will pull it into an irreversible geographic poverty trap.2

Workforce and wages

The October 2023 unemployment rate in the Indianapolis metropolitan area was 3.0%, a level only slightly higher than 2.7% in October 2022 and just over a point above the region’s historical low of 1.9% in October 2000. This beat the October 2023 state rate of 3.3% and national rate of 3.6% (not seasonally adjusted). Between October 2022 and October 2023, the Indianapolis labor force grew 0.8% compared to a 0.1% decrease for the state and a 1.8% increase for the nation.

Average hourly earnings for all private sector employees in the Indianapolis metropolitan area increased 2.6% between October 2022 and October 2023. This contrasts with a state increase of 2.2% and a national increase of 4.0%.3 The $30.68 earned by the average worker in metropolitan Indianapolis fell 10.2% short of the $34.17 earned by the average worker nationwide in October 2023.4 The Consumer Price Index increased 3.2% between October 2022 and October 2023.5 This means real wages in Indianapolis fell by 0.6% while they grew 0.8% nationwide.6 These contrasts emphasize a widening gap in hourly pay between workers in Indianapolis and workers in the rest of the United States.

Shrinkage in high-value occupations offers further evidence of deterioration in the competitiveness of the Indianapolis metropolitan area workforce. Between May 2021 and May 2022 (the most current available data), the number of individuals working in architecture and engineering occupations fell from 13,670 to 13,240 (a 3.1% decrease) and the number working in computer and mathematical occupations fell from 30,950 to 30,130 (a 2.6% decrease). As other metropolitan regions compete hard for these occupations, workers with technology and engineering talent may continue to leave Indianapolis and handicap the future economic potential of the region.7

Employment and wages

Between the second quarter of 2022 and the second quarter of 2023, the volume of jobs in the Indianapolis metropolitan area grew 2.6% (see Table 1). Work by health care providers to reverse critical staffing shortages accounted for almost one-third of this growth. Growth in two traditionally low-wage industries – “accommodation and food services” and “wholesale trade, transportation and warehousing” – accounted for one quarter of this growth. This was balanced by two traditionally high-wage industries – “manufacturing” and “professional, scientific and technical services” – that accounted for another quarter of this growth.

Table 1: Covered employment & wages for Indianapolis-Carmel-Anderson MSA

Industry 2022 Q2
2023 Q2
% growth % of
total jobs
Agriculture, natural resources, mining & utilities 7,204 7,514 4.3% 1.1%
Construction 57,693 60,331 4.6% 9.5%
Manufacturing 93,710 97,717 4.3% 14.4%
Retail trade 100,010 98,413 -1.6% -5.7%
Wholesale trade, transportation & warehousing 136,741 139,795 2.2% 11.0%
Information 12,203 12,304 0.8% 0.4%
Finance & insurance 48,599 48,540 -0.1% -0.2%
Real estate 16,694 17,090 2.4% 1.4%
Professional, scientific and technical services 69,234 71,844 3.8% 9.4%
Management of companies and enterprises 13,289 13,457 1.3% 0.6%
Administrative support & waste management 85,737 81,765 -4.6% -14.3%
Educational services 69,899 73,145 4.6% 11.7%
Health care and social services 160,295 169,159 5.5% 31.8%
Arts, entertainment and recreation 17,036 18,558 8.9% 5.5%
Accommodation and food services 90,655 94,470 4.2% 13.7%
Public administration 46,358 47,680 2.9% 4.7%
Other services 31,690 33,109 4.5% 5.1%
Total jobs in listed industries 1,057,047 1,084,891 2.6% 100.0%

Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages

Unemployment is expected to average 4.3% nationally, 3.9% in the state and 3.5% in the Indianapolis metropolitan area during 2024. Even with slower-than-normal real GDP growth, employment opportunities will remain abundant for residents of the Indianapolis metropolitan area. Accelerated transition of older workers into retirement, smaller annual cohorts of high school graduates and lower-than-expected labor force participation by working-aged men will make competition for talent intense among Indianapolis employers in 2024. The average worker, though, will earn measurably less per hour than workers in metropolitan areas with economies that are blossoming.

Residential real estate

Housing affordability will continue to be an economic challenge for individuals and families nationwide, statewide and locally in 2024. High mortgage rates make a homeowner reticent to place their current house on the market, move and finance the purchase of a new house. This limits supply and fuels further price increases for homes that are already expensive for the average-income earner. The median listing price for a house in the Indianapolis metropolitan area increased 5.2% from $297,000 in November 2022 to $312,500 in November 2023. This compares with a 4.1% increase from $269,000 to $280,000 in Indiana and a 1.0% increase from $416,000 to $420,000 nationwide over the same period.8


  1. Per capita real GDP for the United States, Indiana and the Indianapolis metropolitan area is calculated by dividing real GDP by the population for the given geographic area as reported by the Bureau of Economic Analysis through its interactive data portal at https://www.bea.gov/itable/. Indianapolis real GDP (measured in chained 2012 dollars) and population were $113,143,639,000 and 1,826,515 in 2007 and $133,188,041,000 and 2,128,664 in 2021. Indiana real GDP and population were $304,085,687,000 and 6,379,599 in 2007 and $346,240,868,000 and 6,813,532 in 2021. United States real GDP and population were $15,623,871,000,000 and 301,231,207 in 2007 and $19,609,812,000,000 and 332,031,554 in 2021.
  2. See “Making the Indianapolis workforce more competitive” recently published in the Indiana Business Review for a more comprehensive study on the long-term productivity crisis facing the Indianapolis metropolitan area.
  3. Bureau of Labor Statistics Current Employment Survey (CES) data available from Federal Reserve Economic Data (FRED) at https://fred.stlouisfed.org/. Average hourly earnings of all total private sector employees in Indianapolis were $29.90 in October 2022 and $30.68 in October 2023. Average hourly earnings in Indiana were $29.41 in October 2022 and $30.06 in October 2023. Average hourly earnings in the United States were $32.85 in October 2022 and $34.17 in October 2023.
  4. Bureau of Labor Statistics Current Employment Survey (CES) data available from STATS Indiana at https://www.stats.indiana.edu/ces/ces_naics/.
  5. See Table 1 of the November 14, 2023 Consumer Price Index Summary published by the Bureau of Labor Statistics. The Consumer Price Index for All Urban Consumers for all products was 298.012 in October 2022 and 307.671 in October 2023.
  6. Subtract the growth rate in the Consumer Price Index, which estimates the inflation rate, from the growth rate in average hourly earnings to calculate the growth rate in real wages.
  7. Compare the May 2021 Indianapolis employment count with the May 2022 Indianapolis employment count for categories 15-0000 Computer and Mathematical Operations and 17-0000 Architecture and Engineering Occupations from the Bureau of Labor Statistics Occupational Employment and Wage Statistics.
  8. Realtor.com data available from Federal Reserve Economic Data (FRED) at https://fred.stlouisfed.org/.