Manufacturing Employment Slides as Tariffs and Automation Hit at the Same Time

Indiana is still the most manufacturing-intensive state in the country, the sector contributes roughly $129 billion and 25.9% of state GDP, employing more than 527,000 people. But the job count is no longer climbing. In Northeast Indiana, manufacturing employment is down 1.28% year-over-year, and manufacturing workers accounted for 44% of unemployment insurance claims in Q1 2026.

Overlay tariffs on top of that. Indiana's three largest export partners, Canada at roughly $14.7 billion, Mexico at about $7.1 billion, and China at around $4.8 billion, are all inside the 2025 tariff regime, raising input costs and complicating export pricing. Meanwhile, Indianapolis saw more than $400 million in advanced manufacturing capital investment between 2023 and 2025, but total advanced manufacturing employment held flat at around 87,400. The equipment arrived. The headcount didn't. Automation absorbed the capacity.