More People are Choosing to Live in Northwest Indiana and that's a Very Good Sign

After more than a decade of decline, Northwest Indiana's population has started growing, and growing faster than the national average.

For more than a decade, Northwest Indiana¹ has been losing population. Starting in 2018, this trend has reversed and in the last few years, population in the Region has grown faster than the national average.

• Between 2010 and 2017, population in Northwest Indiana fell by 1.0% (-0.15%/year), well below the national rate of +5.1% (+0.7% per year).²

• Between 2017 and 2022, population grew by 2.9% (+0.6% per year), above the national rate of +2.5% (+0.5% per year).

One of causes behind this shift is a change in net domestic migration, or the difference between the number of people who move out of a region each year and the number who move in. Negative net domestic migration is when people move out faster than into a region. Positive net domestic migration is when people move into a region faster than out (or, equivalently, out of a region slower than into it). The figure below shows net domestic migration for Northwest Indiana by year going back to 2009 (the earliest for which data are readily available).

Figure: Net Domestic Migration for Northwest Indiana by year from 2009 to 2022.

For the years 2009 through 2017, Northwest Indiana consistently lost people each year at the average rate of a new -2,536 per year through domestic migration. Despite the perception that Illinois residents were flowing into Northwest Indiana, people were leaving the region at a much greater rate.

In the last few years, this trend has reversed. Since 2018, Northwest Indiana has consistently gained people each year at the average rate of a net +1,100 people per year through domestic migration. This gain has been driven in part by a greater inflow of residents, but also by a lessened outflow of existing residents. More people are living in Northwest Indiana, both in due to choosing to move here and, more importantly, choosing to remain here, and that is a very, very big deal.

Ultimately, the best single sign of strong economic health and future prosperity for a region is when more people choose to live there.

Why Northwest Indiana?

This positive net domestic migration is, in my opinion, a direct result of the culmination of years of economic development efforts focused of the area of quality of place improvements. For decades, Indiana in general and Northwest Indiana in particular, pursued a strategy of emphasizing tax incentives and business-friendly practices to attract firms. This strategy often overlooked worker and human capital considerations. On the CBER’s annual Manufacturing Scorecard for Indiana, Indiana has consistently been graded “A” on “Tax Climate,” while the lowest scoring category has as consistently been “Human Capital,” with a grade of “C” on the most recent report.

Business-friendly policies are important for attracting firms, but without an appropriately skilled and educated workforce from which to draw workers, it’s not enough. In recent years we have seen an organized push by economic development and local government organizations in Northwest Indiana to change this approach and focus on also meeting the needs of workers and their families, particularly through improvements in quality of place.

There have been monumental efforts by regional organizations including the Northwest Indiana Forum (particularly for their leading role in the Ignite the Region initiative, READI 1.0, and READI 2.0), the Indiana Regional Development Authority, Northwest Indiana Regional Planning Commission (NIRPC) and many, many others on improving quality of place. These efforts have been coupled with infrastructure improvements such as the South Shore Line Double Track and West Lake Corridor projects as well as the Indiana Dunes National Park. These efforts have resulted in better green spaces and more convenient transportation options. I believe these positive migration numbers are the tip of the iceberg when it comes to the return on investment in quality of place.

Beyond improvements in quality of place, the labor market in Northwest Indiana has been the strongest we’ve experienced in decades. Earnings for Northwest Indiana workers, after adjusting for inflation, rose 5.8% between 2019 and 2022.³ While in the in the key service sectors of Retail Trade and Accommodation and Food Services earnings for workers rose 12.4% and 20.6%, respectively, after adjusting for inflation over the same period. These are impressive increases in pay for traditionally lower-paying industries and are likely to have a large multiplier effect on our economy.

Finally, in addition to the positive net migration, there is other evidence that Northwest Indiana is becoming a more desirable destination for firms and workers. I will leave you with a few of my favorite statistics from recent years:

• During the previous five years (2018-2022) there have been 23% more residential building permits issued in Northwest Indiana than the five years before that, despite the rise in interest rates.⁴

• In 2022, Northwest Indiana added a net of 805 new business establishments (+5.1%). For contrast, Cook County in Illinois, which reflects an economy more than 7 times the size of Northwest Indiana, lost a net of 89 business establishments (-0.1%) during the same year.⁵

• Steel production in Indiana (primarily Northwest Indiana) has risen 6.0% since 1996 and Indiana now produces more than a quarter (26%) of all steel in the United States.⁶

Read more

• “Futurecast panelists optimistic about Region’s economic outlook,” Northwest Indiana Business Magazine (November 22, 2023).

• “Economist: Northwest Indiana doing better than Indiana and nation as a whole,” The Times of Northwest Indiana (November 18, 2023)

• “Northwest Indiana Population Migration Patterns,” The Region Economist (December 3, 2022)

1. Unless otherwise specified, “Northwest Indiana” here refers to the four counties of Lake, Porter, Newton and Jasper. This is consistent with the U.S. Census definition of the Gary Metropolitan Division.

2. Source: U.S. Census Bureau, American Community Survey (ACS).

3. Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW) and Consumer Price Index (CPI). Due to data limitations, these earnings data reflect the three counties of Lake, Porter and LaPorte.

4. Source: U.S. Census Bureau, Building Permits Survey (BPS).

5. Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW).

6. Source: U.S. Geological Survey, Iron and Steel Statistics.