Indianapolis forecast 2026
Executive Director, Indiana Business Research Center, Kelley School of Business, Indiana University
Since the pandemic and during the past year, the metropolitan Indianapolis economy has advanced at impressive speed when compared to the rest of the nation. Real GDP grew 12.5% between 2019 and 2023 while it only grew 9.7% nationwide.1,2 Total wages paid to Indianapolis workers expanded 7.6% between 2024 Q1 and 2025 Q1 compared to 4.8% nationally.3,4 The Indianapolis labor force increased 7.8% between August 2019 and August 2025 compared to 4.3% nationwide.5,6 Between August 2024 and August 2025, national unemployment rose from 4.2% to 4.3% while it fell in Indianapolis from 4.1% to 3.6%.7,8 Impressive expansion in employment, wages and economic activity made Indianapolis a positive outlier among Midwestern cities in 2025.
Several projects strengthen the region’s momentum going into 2026. Conversion of the Circle Center Mall to Traction Yards ($600 million investment),9expansion of convention facilities that includes the addition of the new 38-story Signia by Hilton hotel ($780 million investment),10 completion of the new IU Health campus ($4.3 billion investment)11 and redevelopment of City Market ($227 million investment)12 and the Old Indianapolis City Hall ($249 million investment)13 elevate downtown as an attractive venue for business, commerce and entertainment. Investment by Indiana University and Purdue University in new facilities (such as the $138 million IU Launch Accelerator for Biosciences14 and Purdue’s $187 million Academic Success Building15), completion of the Elanco headquarters and its One Health District ($200 million investment)16and evolution of 16 Tech as an entrepreneurial hub (such as hosting IU LAB and a new $24 million headquarters for Heartland BioWorks17) accelerate scientific discovery and economic innovation which make Indianapolis globally competitive. Construction of the LEAP district and Lilly’s manufacturing footprint in Boone County ($4.5 billion investment)18, advancement of Hamilton County quality-of-place initiatives such as a new downtown in Westfield (beginning with the $123 million Park and Poplar project)19 and an economic vision for the Interstate 69 corridor that includes a Bargersville agricultural and life sciences park20 fuel opportunities in suburban counties.
Employment trends in the Indianapolis metropolitan area suggest a life science takeoff that matches new capital projects in the region. Between August 2024 and August 2025 (the most current date for which data on employment was available for this article), employment grew 4.8% in professional, scientific and technical services and 6.0% in chemical manufacturing (which is dominated by production of pharmaceuticals).21 For reference, growth in total employment over the same period was 1.2% nationally,22 0.4% in Indiana23 and 1.1% in metropolitan Indianapolis.24 Between May 2023 and May 2024 (the most current date for which data on occupations was available for this article), jobs grew 17.1% in the life, physical and social science occupations and 9.3% in architecture and engineering occupations. Increase of biomedical engineers from 220 to 500 (+127%), microbiologists from 100 to 150 (+50%), biological technicians from 120 to 170 (+42%) and medical scientists excluding epidemiologists from 900 to 1,010 (+12%) during this period emphasize the life sciences surge currently enjoyed in the region.25
Table 1: Indianapolis metropolitan area employment by industry
| Industry | Employment August 2024 |
Employment August 2025 |
Employment share August 2025 |
Growth 2024-2025 |
|---|---|---|---|---|
| Natural resources and mining | 700 | 700 | 0.1% | 0.0% |
| Construction | 69,100 | 70,000 | 5.8% | 1.3% |
| Durable goods manufacturing | 51,700 | 51,100 | 4.3% | -1.2% |
| Nondurable goods manufacturing | 45,300 | 47,300 | 3.9% | 4.4% |
| Wholesale trade | 55,900 | 56,600 | 4.7% | 1.3% |
| Retail trade | 99,700 | 100,100 | 8.4% | 0.4% |
| Transportation and warehousing | 87,100 | 89,600 | 7.5% | 2.9% |
| Utilities | 3,300 | 3,100 | 0.3% | -6.1% |
| Information | 11,600 | 11,000 | 0.9% | -5.2% |
| Financial activities | 75,300 | 75,000 | 6.3% | -0.4% |
| Professional and business services | 187,800 | 190,300 | 15.9% | 1.3% |
| Private educational services | 19,900 | 20,400 | 1.7% | 2.5% |
| Health care and social assistance | 165,300 | 172,400 | 14.4% | 4.3% |
| Leisure and hospitality | 115,200 | 113,100 | 9.4% | -1.8% |
| Other services | 50,900 | 49,200 | 4.1% | -3.3% |
| Government | 146,500 | 147,900 | 12.3% | 1.0% |
| Total nonfarm employment | 1,185,300 | 1,197,800 | 100.0% | 1.1% |
Source: U.S. Bureau of Labor Statistics
Information and technology are in retreat. Employment in information industries fell 5.2% between August 2024 and August 2025 as revealed in Table 1 and jobs in the computer and mathematical occupations fell 2.5% between May 2023 and May 2024 as revealed in Table 2. This is consistent with national retrenchment and layoffs by Salesforce – one of the region’s largest software employers – and other technology companies.26
Despite continued healthy events and convention business in downtown Indianapolis, overall metropolitan area employment in leisure and hospitality fell 1.8% between August 2024 and August 2025. Restaurants, bars and hotels all have fewer workers than a year ago. This reflects a national pullback in discretionary spending by households who fear a challenging economic future.
Indianapolis manufacturing – which is 8.2% of regional employment – shifted in a way that mimicked the rest of the state. Employment rose 4.4% in nondurable goods output but fell 1.2% in durable goods production. Expansion in pharmaceutical output drove the high growth in nondurables. The number of workers fell 2.1% in both transportation equipment and motor vehicle parts manufacturing – two industries that are a historical backbone of the Hoosier economy.27 Tariffs and the business uncertainties they create have slowed growth in traditional manufacturing.
Sustained dynamism will help Indianapolis fare better than the state and on par with the nation in 2026. Compared to expected growth of 1.8% nationally and 1.0% in the state, the Indianapolis metropolitan area should enjoy between 1.5% and 2.0% real GDP growth next year. Unemployment is expected to slightly increase from 3.6% to just over 4.0%. While previously mentioned capital projects will fuel economic expansion, slowdowns in logistics and durable goods manufacturing – two important contributors to the Indianapolis economy – will keep the economy from growing at its full potential. The triple threat of tariff-induced export reductions, government-mandated price discounts and drug approval delays induced by a smaller-staffed Food and Drug Administration could slow pharmaceutical growth and offer additional headwinds for Indianapolis in 2026.28
Table 2: Indianapolis metropolitan area jobs by occupation
| Major occupations group | Jobs May 2023 | Jobs May 2024 | Jobs share May 2024 | Growth 2023-2024 |
|---|---|---|---|---|
| Management | 63,770 | 65,100 | 5.9% | 2.1% |
| Business and financial operations | 65,600 | 66,400 | 6.1% | 1.2% |
| Computer and mathematical | 32,950 | 32,110 | 2.9% | -2.5% |
| Architecture and engineering | 14,440 | 15,790 | 1.4% | 9.3% |
| Life, physical and social science | 8,940 | 10,470 | 1.0% | 17.1% |
| Community and social service | 17,190 | 17,420 | 1.6% | 1.3% |
| Legal | 8,580 | 8,480 | 0.8% | -1.2% |
| Educational instruction and library | 48,200 | 49,210 | 4.5% | 2.1% |
| Arts, design, entertainment, sports and media | 14,540 | 14,620 | 1.3% | 0.6% |
| Health care practitioners and technical | 78,050 | 77,320 | 7.0% | -0.9% |
| Health care support | 41,090 | 47,570 | 4.3% | 15.8% |
| Protective service | 24,380 | 25,360 | 2.3% | 4.0% |
| Food preparation and serving related | 92,210 | 92,810 | 8.5% | 0.7% |
| Building and grounds cleaning and maintenance | 29,740 | 31,690 | 2.9% | 6.6% |
| Personal care and service | 18,930 | 20,390 | 1.9% | 7.7% |
| Sales and related | 93,770 | 97,140 | 8.9% | 3.6% |
| Office and administrative support | 131,470 | 127,980 | 11.7% | -2.7% |
| Farming, fishing and forestry | 630 | 590 | 0.1% | -6.3% |
| Construction and extraction | 43,520 | 46,750 | 4.3% | 7.4% |
| Installation, maintenance and repair | 42,920 | 41,680 | 3.8% | -2.9% |
| Production | 67,320 | 68,230 | 6.2% | 1.4% |
| Transportation and material moving | 145,510 | 139,660 | 12.7% | -4.0% |
| Total jobs classified by occupation | 1,083,750 | 1,096,770 | 100.0% | 1.2% |
Source: U.S. Bureau of Labor Statistics
Continued investment in life sciences manufacturing, research and product development is key to advancing the Indianapolis economy in 2026. Indiana University and Purdue University and the innovation districts they anchor are central to the evolution of Central Indiana as a global life sciences hub. Both are especially important in seeding a broad and diverse high-energy ecosystem for pharmaceutical, medical device and biotechnology startup ventures. Initiatives that enhance quality of life in the central city and suburban communities are needed to attract and retain the educated talent required to grow the life sciences economy. A diverse economy insulates Indianapolis from severe downturns, and a global reputation for sports brings national events to the city which lift its visibility. Long-term prosperity, though, requires Indianapolis to seriously compete with other dynamic metropolitan areas through contribution to new knowledge, technologies and industries in ways other regions cannot easily emulate. This requires intentional coordination of strategy, public investment and marketing that is broader than any one city, town or county.
Notes
- U.S. Bureau of Economic Analysis. 2025. CAGDP real GDP by county and metropolitan area. Indianapolis-Carmel-Anderson MSA real GDP (in 2017 chained dollars) grew from $143,849,528,000 in 2019 to $161,812,303,000 in 2023, or 12.5%.
- U.S. Bureau of Economic Analysis. 2025. Table 1.1.6 Real gross domestic product, chained dollars. U.S. real GDP (in 2017 chained dollars) grew from $20,715.7 billion in 2019 to $22,723.7 billion in 2023, or 9.7%.
- Federal Reserve Bank of St. Louis. 2025. Total quarterly wages in Indianapolis-Carmel-Anderson, IN.
- U.S. Bureau of Labor Statistics. 2025. Total wages (in thousands) in total covered total, all Industries for all establishment sizes in U.S. total, NSA. Series ENUUS00030010. U.S. total wages grew from $3,037,790,325,000 in 2024 Q1 to $3,182,535,733,000 in 2025 Q1, or 4.8%.
- Federal Reserve Bank of St. Louis. 2025. Civilian labor force in Indianapolis-Carmel-Anderson, IN (MSA). The civilian labor force in the Indianapolis MSA grew from 1,081,931 in August 2019 to 1,166,752 in August 2025, or 7.8%.
- Federal Reserve Bank of St. Louis. 2025. Civilian labor force level. The civilian labor force in the U.S. grew from 163,774,000 in August 2019 to 170,778,000 in August 2025, or 4.3%.
- Federal Reserve Bank of St. Louis. 2025. Unemployment rate.
- Federal Reserve Bank of St. Louis. 2025. Unemployment rate in Indianapolis-Carmel-Anderson, IN (MSA).
- Shuey, Mickey. 2025. Hendricks unveils new name for Circle Centre ahead of $600M overhaul. Indianapolis Business Journal. December 12.
- Shuey, Mickey. 2025. Projected cost of Signia hotel rises by $70M, with CIB set to foot bill. Indianapolis Business Journal. February 14.
- Lee, Daniel. 2025. IU Health prepares for huge increase in energy use with $4.3B hospital complex. Indianapolis Business Journal. November 28.
- Indianapolis City Market. 2025. City of Indianapolis unveils redevelopment plans for western portion of City Market Block. January 9.
- Wooten, Taylor. Council committee recommends $66M in bonds for Old City Hall redevelopment. Indianapolis Business Journal. March 11.
- Indiana University. 2025. Launch Accelerator for Biosciences: IU LAB.
- Shuey, Mickey. 2025. Purdue unveils first plans for $187M Academic Success Building in Indianapolis. Indianapolis Business Journal. January 15.
- Miller, C. J. 2025. Elanco opens new $200 million global headquarters in downtown Indianapolis. Hoosier Ag Today. October 1.
- Brown, Alex. 2025. Heartland BioWorks headquarters planned for 16 Tech. Indianapolis Business Journal. October 27.
- Lee, Daniel. May 6. Lilly breaks ground on $4.5B foundry campus in Lebanon’s LEAP District. Indianapolis Business Journal. May 6.
- Shuey, Mickey. 2025. Westfield set to unveil master plan for downtown next month. Indianapolis Business Journal. August 27.
- Bradley, Daniel. 2025. Bargersville seeks balance as it builds a downtown. Indianapolis Business Journal. July 4.
- Hoosiers by the Numbers. 2025. Current Employment Statistics (CES) – Not Seasonally Adjusted. Professional, scientific and technical services employment in the Indianapolis-Carmel-Greenwood MSA grew from 83,400 in August 2024 to 87,400 in August 2025, or 4.8%. Similarly, chemical manufacturing employment grew from 20,000 to 21,200, or 6.0%.
- Federal Reserve Bank of St. Louis. 2025. Employment level.
- Federal Reserve Bank of St. Louis. 2025. All employees: Total nonfarm in Indiana.
- Federal Reserve Bank of St. Louis. 2025. All employees: Total nonfarm in Indianapolis-Carmel-Greenwood, IN (MSA).
- U.S. Bureau of Labor Statistics. 2025. Occupational Employment and Wage Statistics (OEWS) Tables. Occupational counts compare the May 2023 and May 2024 metropolitan and nonmetropolitan area tables for the Indianapolis-Carmel-Greenwood MSA.
- Bloomberg News and Indianapolis Business Journal Staff. 2025. Salesforce’s struggling stock needs strong earnings to show AI progress, analysts warn. Indianapolis Business Journal. September 3.
- Hoosiers by the Numbers. 2025. Current Employment Statistics (CES) – Not Seasonally Adjusted. Transportation equipment manufacturing employment in the Indianapolis-Carmel-Greenwood MSA fell from 14,400 in August 2024 to 14,100 in August 2025, a change of -2.1%. Similarly, motor vehicle parts manufacturing employment fell from 9,600 to 9,400, also a change of -2.1%.
- acques, Allen. 2025. Biopharma’s triple threat in 2025: tariffs, price pressure, and FDA cuts. OMP. July 11.
