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* Let’s look at some regional analyses from the February 2024 State of Illinois Economic Forecast Report Prepared for CGFA by Moody’s/Economy.com, starting with Chicago…
Chicago’s economy is showing signs of fatigue. Payroll employment has flattened in the past several months, putting it up 0.8% year over year in the fourth quarter. Healthcare remains a strong source of job growth, but support from other private-service industries has been dwindling. Professional/business services are contracting, transportation/warehousing is trending lower, and leisure/hospitality employment has lost momentum. Manufacturing, construction and government have maintained modest but steady job growth during the course of the year. Employers have significantly reined in pay increases; the employment cost index shows that wage growth for private workers has slowed more in Chicago than in the U.S. during the past year. The rise in the unemployment rate has been similar to the nation’s, but the labor force is contracting after reaching a new high earlier in the year. The jobless rate averaged 4.3% in the fourth quarter.
Professional/business services have been weighed down as high interest rates and the sluggish global economy have chipped away at demand for consulting and technical services, and demand for temporary help has dropped sharply. While finance has fared a bit better lately, layoffs at Northern Trust and BMO Harris are reminders of the chal- lenges banks are facing. Rapid interest-rate increases have caused banks to offer higher deposit rates to customers, squeezing profit margins.
The return of top entertainment and social events is helping to strengthen tourism and leisure/hospitality. Further, the resumption of business meetings and conventions is giving a boost to the business-travel hub. Chicago led the top 25 U.S. markets for meetings and events volume for several months last year, according to hospitality industry tracker Knowland. Hotel occupancy is back to about 90% of its pre-pandemic average, on par with other major markets.
* And the rest…
Lake County’s economy is stuck in a rut. Employment has gone sideways in the past year, leaving it barely any higher than it was at the end of 2022. Manufacturing, retail and transportation/warehousing have declined, and most other major industries have increased modestly. The unemployment rate has drifted higher, and at 5% it is now in unfamiliar territory above the state rate. Some of the rise in joblessness stems from the fact that the labor force is increasing after trending lower for several years. House prices have bounced back from last winter’s declines, partly because new-home construction is weak.
The Urbana-Champaign economy has been one of Illinois’ best performers, though growth has come to a halt. Total employment has leveled off since midyear as employment has declined in several industries, most notably professional/business services and retail. Healthcare remains a stalwart of job growth—and anchored by the University of Illinois, state government employment is trending higher. Stalling in the job market combined with persistently strong labor force growth has pushed the jobless rate up into the mid-4% range, in line with the state.
Bloomington’s economy has cooled. Employment has come down in recent months and weakness is apparent in most major industries. The unemployment rate has risen during the past year and now matches the state rate. Though job losses are a factor, the growing labor force is also putting upward pressure on joblessness. Over the past year, high-wage jobs have contracted while low- and mid-wage employment expanded. As a result, average hourly earnings are down year over year.
Springfield’s economy is starting to regain momentum, though the rebound in nonfarm payrolls since the fall has come almost entirely from government, while private-sector employment has been flat. Professional/business services have been particularly weak. The unemployment rate has risen to 4.7% as of November, partly because of an increase in the labor force.
Peoria’s economy is limping along. Job losses have abated this fall with employment in most industries, including manufacturing and healthcare, leveling off. However, strong growth in professional/business services earlier this year has given way to declines in recent months. Weakening is also apparent in the household employment survey. The unemployment rate has been increasing while the size of the labor force has been stagnant.
Rockford’s economy is on the mend after employment declined in the first half of 2023. Services are carrying the day, particularly healthcare and leisure/hospitality, while goods producers are no longer hemorrhaging jobs. Last year was the Hard Rock Casino’s second year of operation in its temporary venue, where it welcomed more visitors than in 2022. The unemployment rate has risen into the mid-6% range. The labor force has stopped shrinking but remains extremely depressed.
The Quad Cities economy is inching forward. Nonfarm payrolls are below their pre-pandemic level and job additions are trailing the state and national averages. The key durable manufacturing industry is moving sideways, but services are the primary source of weakness. The two downstate communities of the Quad Cities and Decatur are heavily dependent on the manufacturing sector. Decatur’s economy remains weak for the state and the Midwest. Nonfarm payrolls have been decreasing since early 2023. Lackluster performance is evident across the board, including in crucial manufacturing. The weak job market and marginal increase in the labor force have pushed the unemployment rate up to 6.5% in the fall, the second highest in the region.
Danville’s economy picked up the pace a bit. Nonfarm payroll growth was more robust than the rest of the state recently. Government payrolls ticked higher, while the opening of the Golden Nugget Casino significantly boosted leisure/hospitality headcounts. On the downside, the manufacturing industry failed to find any hiring momentum. Despite net job gains, the unemployment rate has moved higher this year as the labor force has jumped. […]
Support from the farm sector has been waning. After trending lower in 2023, agricultural prices are now hovering near levels last seen in 2014. However, compared with their historical average, prices remain elevated. Although state farm income has stopped climbing, the slowdown has been much milder than at the national level, where it has pulled back sharply in recent quarters. […]
There are eight Illinois counties that are part of the St. Louis metro area: Bond, Calhoun, Clinton, Jersey, Macoupin, Madison, Monroe and St. Clair. Together, these counties account for about 24% of the St. Louis metro area population and about 5% of the Illinois population. Post-pandemic economic growth in this group of counties has been stronger than in Illinois, keeping more in line with the St. Louis metro area. That is largely because Madison County, the largest among them, has also been the strongest in job growth in recent years, a distinction it will retain. Smaller Monroe County also boasts an above-average employment performance, and it is the only one that is growing in population. Overall, the Illinois portion of the St. Louis metro area is losing population more quickly than the rest of the metro area, but less so than Illinois. Population loss will continue in this fashion over the forecast horizon.
Lots and lots more information on this and other topics, so take a look.
posted by Rich Miller
Friday, Mar 1, 24 @ 8:41 am
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Bloomington-Normal’s economy can basically be summed up with three entities: State Farm, Rivian, and Illinois State. Sure, there are loads of other big employers, like Country Financial, in healthcare, Illinois Wesleyan, and the likes, but those are the three heads of the hydra in town that represent most work.
And of them, there’s always concern about if State Farm is contracting or moving jobs elsewhere, like to Georgia, Arizona, or Texas. There’s always concern about proper state funding to ISU and if the university is going to grow like the U of I or contract like Eastern. And there’s especially concern with the health of Rivian, which appears to basically be floating along entirely on Amazon’s dime, and who knows if Bezos will keep making rounding errors in his financing or not.
B-N is a high ceiling and low floor market in future outlook as a result. If State Farm thrives and grows, if ISU has a great incoming class and Springfield doesn’t implode, and if Rivian turns a corner, this’ll be one of the hottest markets in the state. If State Farm contracts in-market, if ISU takes a step back, and if Rivian’s house of cards collapses, B-N is in a lot of trouble.
Comment by TJ Friday, Mar 1, 24 @ 9:20 am
State Farm has quietly contracted its Bloomington workforce from 15,000 to 13,000 over the past 5+ years. Rivian’s explosive growth allowed State Farm to remain under the radar in this regard. With another year of large underwriting losses don’t expect them to grow Bloomington employment. If anything they will reduce headcount.
I think ISU employment will be basically flat or increase slightly, so hope for continued growth from Rivian.
Comment by Independent Friday, Mar 1, 24 @ 10:21 am
Brandon Johnson finally woke up and a year in started a dialogue with the business community. Maybe the socialist wing will wake up and realize that there is no money fairy and taxes come from tax paying businesses and individuals. I miss Rahm. He actually understood this long-forgotten concept.
Comment by Always something Friday, Mar 1, 24 @ 10:23 am
It was the best of times; it was the worst of times …
Could have been better, but it also could have been a lot worse. So it’s generally good …
Hopefully, all the corporate recruiting that JB has been engaged in will continue to pay off. And hopefully in another year the medical sector will have stabilized from the lack of covid dollars, and be back in a hiring mode to correct from all the cuts the past year.
Comment by RNUG Friday, Mar 1, 24 @ 11:27 am
Interesting, as the Chicagoland region was just named the best spot for corporate investment for the 11th year in a row and Illinois is 2nd in total number of capital investment projects in the country only behind Texas but in front of California, NY, and others. This was from Site Selection Magazine.
Comment by Frida's boss Friday, Mar 1, 24 @ 11:41 am
And with a different take; Moodys uses some great modifiers for each of the regions.
Comment by Just a Citizen Friday, Mar 1, 24 @ 12:33 pm
They don’t even mention counties south of I-64. The economy must be booming in the deep south.
Comment by Good citizen Friday, Mar 1, 24 @ 12:34 pm
“Chicago’s economy is showing signs of fatigue.”
Chicago metro is still great for corporate investments, winning again, 11 years in a row. Presently there are added dynamics in attracting talent to Illinois: repressive laws in other states that are reportedly driving some to leave.
Comment by Grandson of Man Friday, Mar 1, 24 @ 1:04 pm