Whitley Yates: What are capital expenditures and why do they matter?

I was going to write an article discussing Indiana’s capital expenditures and the macro level implications of state politics on market trends. Then I realized most people find CapEx complicated and cumbersome to grasp. I decided to reduce the confusion and break down CapEx to make it easier to understand.

Indiana’s economy has been on a roll lately, and there’s this interesting term people use to describe one of the factors driving our success called CapEx. It stands for capital expenditures, which is just a fancy way of saying that businesses are spending a ton of money on new projects and making our state bigger and better.

Let’s dig into the numbers: In 2022, Indiana’s CapEx skyrocketed by 155%, hitting a massive $22 billion. Fast forward to 2023, and it went even higher, reaching an impressive $28.7 billion. Big bucks, right? The best part is that people in Indiana got paid more, with record-high hourly wages from these new projects.

Now, here’s the backstory. Back in 2005, Gov. Mitch Daniels set up this quasi-government agency called the Indiana Economic Development Corp. (IEDC). Working with the governor and General Assembly, the IEDC focuses every day on bringing in businesses, investments, and creating new and higher paying jobs for Hoosiers. While surrounding states are struggling to pay their bills, the IEDC continues to break records. The $28.7 billion CapEx in 2023 marks the seventh consecutive record-breaking year for economic development in Indiana thanks to effective Republican leadership and policies.

Beyond the numbers, CapEx means more jobs—22,000 new ones committed in 2023—with an average wage of $36 an hour. That’s more than the national average. Plus, the IEDC helped out thousands of existing Indiana small businesses, getting them almost $97 million in funding and helping launch 451 new businesses.

Now, why should we care? Well, more investment means more job opportunities, better-paying gigs, and our communities get a boost. Our cities and towns get a facelift, businesses want to set up shop here, and small businesses get a leg up. It’s a cycle that helps balance Indiana’s budget, making sure things keep running smoothly.

So, here’s the bottom line—Republican leadership in Indiana has created an environment that is attractive for investment, and as our federal government and neighboring states continue to struggle on almost every front, the Indiana model continues to succeed.•

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Yates is director of diversity for the Indiana Republican Party, a political commentator
and a law degree candidate. Send comments to ibjedit@ibj.com.

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