As 2013 drew to a close, a number of key indicators painted a brighter picture of Illinois’ economic performance, even as underlying risks continued to undermine potential growth in 2014.
The University of Illinois Flash Index, a measure designed to provide a quick reading of how the state’s economy is doing, finished 2013 at one of its highest points since 2007. The Index hit 107 in December, up from 106.5 in November and tied September for the highest reading of 2013.
All three components of the index, including income tax receipts, corporate tax receipts and sales tax receipts, were up from December 2012, when adjusted for inflation. Both individual and corporate income tax receipts were up by more than 10 percent, while sales tax receipts rose 4 percent.
Illinois’ economic performance mirrors some larger trends nationally. Real gross domestic product grew nationally by 4.1 percent in the third quarter of 2013, the most recent period figures are available. Unemployment across the country has also been trending downward, hitting 7.0 percent in November.
As well, stocks for companies based in Illinois enjoyed a positive year in 2013. The majority of the 140 stocks listed in the Crain's Chicago Index, ended the year with positive gains, with some increases in the triple digits.
The index, comprised of 140 Illinois-based stocks with a market capitalization of at least $100 million, closed the last full week of 2013 up 35 percent for the year.
Still, risks for Illinois remain. Unemployment in the state remains stubbornly high, sticking at 8.7 percent in November, more than the national average. A failure by Congress to extend the federal jobless benefits for 1.3 million long-term unemployed nationwide is expected to hit Illinois particularly hard.
The state has an estimated 80,000 residents who will lose federal benefits without a renewal of the program in January.
Illinois also has a wide range of other, structural issues that could potentially weigh down growth. The state now has the second-highest property taxes in the nation, lagging only New Jersey.
Illinois also continues to lose manufacturing jobs at a fast clip, dropping 9,000 such jobs last year.
As well, changes to payouts to retirees as a result of a deal to reform the state’s pension system could have a multiplier effect on economic performance. By some estimates, retirees’ spending supported over $12 billion in economic impacts on state goods and services, with every dollar in pension benefits paid out representing $1.77 in total economic output.
Economic performance in the state is expected to be one of the biggest issues in the 2014 governor’s race. Governor Pat Quinn has said he supports an increase in the state’s minimum wage, a move opposed by all four of the Republican primary candidates.