Things are looking up
Tuesday, Jan 6, 2015 - Posted by Rich Miller
* Crain’s takes a look at the Chicago region’s immediate economic future and pronounces it bright…
The Chicago Purchasing Managers Index, a closely watched indicator of industrial demand, averaged 62.5 over the three months ended in November. Anything above 50 signals a growing manufacturing base. “That’s really strong,” Kavcic says. […]
In 2014, Commonwealth Edison expected to see a 1.5 percent increase in household electricity consumption, not including the effects of its energy-efficiency programs, according to the utility’s projections late in the year. That’s the highest growth in usage since the recession. In 2013, the rate was just 0.7 percent. […]
Estimates of the region’s gross metropolitan product growth range between 2.3 percent and 3.4 percent. The same figure for 2014 is expected to come in at anywhere from 1.7 to 2.6 percent, depending on the source. […]
One reason [for why the region has lagged in the recent past] is that business and professional services—accountants, lawyers, consultants, advertisers, etc.—are such an important component of the local economy now. And those sectors tend to rebound later than others in a recovery. “This is where the professional services businesses really kind of kick in for Chicago,” he says. “Because we service so much of the surrounding Midwest area, it’s become the economic engine. That’s sort of the bellwether.”
Indeed, professional services jobs increased 2.6 percent in September over the same time in 2013, according to the U.S. Bureau of Labor Statistics. That was the highest year-to-year jump of any category other than construction. Meanwhile, unemployment in the Chicago area fell sharply during the same period, to 6.1 percent from 8.4 percent. […]
Even commercial bankers—a group that, to date, has been pretty sour on the region’s economic performance—are coming around. “All of our customers are projecting very good years,” says Edward Wehmer, CEO of Wintrust Financial in Rosemont, the second-largest locally based bank holding company, with $19 billion in assets. “Wage inflation is going to start to kick in. Consumers are starting to feel better.”
* Also, the U of I’s “Flash Index” was at 106.5 in December. It’s been above 100 - the dividing line between growth and decline - for the past two years, and hasn’t been this consistently high since 2007.
- Norseman - Tuesday, Jan 6, 15 @ 10:56 am:
Crain, you’re screwing up the narrative!
- anon - Tuesday, Jan 6, 15 @ 10:59 am:
When Crains endorsed Rauner they said the economy was in the toilet. Now that the election is over, the economy is strong. A remarkable transformation in a few weeks!
- 47th Ward - Tuesday, Jan 6, 15 @ 11:05 am:
All we needed was a Republican Governor to turn things around. Woo-hoo! Should have done this years ago.
Makes. Me. Sick.
- VanillaMan - Tuesday, Jan 6, 15 @ 11:08 am:
AHHHhhhh - not so fast.
This is Illinois.
I’ll believe it when I feel it.
- anon - Tuesday, Jan 6, 15 @ 11:12 am:
Is Crains intellectually honest enough to give Quinn any belated credit for the remarkable turnaround on his watch?
- PublicServant - Tuesday, Jan 6, 15 @ 11:13 am:
And the turn around occurred during Pat Quinn’s governorship. Sorry Bruce, you’re a day late and a dollar short…well a day late anyway.
- walker - Tuesday, Jan 6, 15 @ 11:22 am:
Good news on many fronts. It has been obvious for months now, that we would have a strong 2015 economically in Illinois, regardless of who won the election.
The only question was who would take credit for it as Governor.
- Wordslinger - Tuesday, Jan 6, 15 @ 11:29 am:
That’s all well and good, but it’s a snapshot in time. The bigger challenges are fundamental and way complicated.
Consumers drive about 80 percent of the economy and incomes have largely been stagnant for all but the .01 for about 40 years.
How then, do you grow an economy when most incomes are flat? The bull run in housing, with people taking money out of their homes to spend, was a sweet ride, but it couldn’t last.
It’s not just here. China is forcibly relocating 250 million rural residents to make them urban consumers in order to boost economic growth that is on a steady decline.
Exponential growth in productivity is changing the need for labor and the definition of work. That’s been talked about for decades but it’s really coming home and in a hurry right now.
What to do with excess labor, especially when you need them to be working to keep the pie growing, and with that, ensure domestic tranquility?
That’s a job a lot bigger than any governor, or any president, for that matter.
- Soccermom - Tuesday, Jan 6, 15 @ 11:35 am:
http://www.youtube.com/watch?v=FXrjIrmek88
- Arizona Bob - Tuesday, Jan 6, 15 @ 11:45 am:
Government cannot truly grow an economy. It can only inhibit it or get out of the way. Illinois has some of the worst situations for growing a business, as identified by virtually any independently prepared study. Entrepreneurship is as difficult in Illinois as just about anywhere else in the nation.
I personally don’t believe that the 5% income tax in itself is such a big deal to businesses. They just want stable and predictable costs, and not be sucked dry from a litigation and union centric, fraud, corruption, and irresponsible government environment. Illinois hasn’t taken even the first step in addressing those issues.
How ironic that the area that’s making a comeback, professional services, is the area where the many human assets are leaving for places like Texas and Arizona. Illinois is a very hard sell for professional relocation. Ask any recruiter.
A lot of the gross state product grwoth is due to AG. Thanks to “global warming” Illinois had a bumper crop last year, and it appears that will continue for the near future.
Anyone know from where the manufacturing growth is coming? I don’t believe that Caterpillar, Deere, Ford, and Daimler Chrysler have been growing here, and Boeing’s doing it’s growing down in South Carolina.
- Bogey Golfer - Tuesday, Jan 6, 15 @ 11:59 am:
Just saw State Farm is nearing completion on their Richardson, Texas Regional Headquarters. Is Bloomington losing any employees as a result?
Also does this factor the number of jobs in Chicago due to suburban offices relocating, vs. true job creation?
- Anonymous - Tuesday, Jan 6, 15 @ 12:16 pm:
A temporary uptick or real growth. Hard to say, but at least encouraging.
- Del Clinkton - Tuesday, Jan 6, 15 @ 12:19 pm:
Now that Magic Bruce is in charge, businesses will flock from Arizona to Illinois.
- HGW XX/7 - Tuesday, Jan 6, 15 @ 12:51 pm:
“Government cannot truly grow an economy”, Arizona Bob you are obviously clueless about infrastructure maintenance and improvement which is the public sector domain (read that government) that without the private sector could not even minimally function or even survive.
- VanillaMan - Tuesday, Jan 6, 15 @ 1:01 pm:
Arizona Bob you are obviously clueless…
LOL! Nah, he just saw a trillion dollars go down our stimulus toilets in 2009 without much beyond a swirl. Even our President chuckled over it in embarrassment.
- Arizona Bob - Tuesday, Jan 6, 15 @ 1:24 pm:
@bogey Golfer
=Just saw State Farm is nearing completion on their Richardson, Texas Regional Headquarters.=
Not only that, State Farm is in the midst of a massive expansion in the Southwest. My kids go to business school at Arizona State in Tempe, and just adjacent to the campus there’s a massive State Farm high rise being built. They’re going to be hiring from ASU, not ISU!
- anon - Tuesday, Jan 6, 15 @ 1:25 pm:
== I personally don’t believe that the 5% income tax in itself is such a big deal to businesses. ==
Obviously true, since the remarkable turnaround in the Chicago area happened with the 5% rate was in effect, not after it dropped. I commend AZ Bob for his insight.
- Arizona Bob - Tuesday, Jan 6, 15 @ 1:30 pm:
@HWW
“Government cannot truly grow an economy”, =Arizona Bob you are obviously clueless about infrastructure maintenance and improvement which is the public sector domain (read that government) that without the private sector could not even minimally function or even survive.=
Things like transportation infrastructure and maintenance for growth are indeed government functions. Lack of government meeting this core function for which it was created cetainly would be a “hindrance” to growth, but if the private sector needed to develop infrasturcture for a site, they’d do it, if it makes sense.
The problem is that when government dollars get involved, those “bridge to nowhere” projects get built that would never have had the merit to be built outside gov.
BTW, for years I designed that “infrastructure” of which you speak, and I know the pork from the staples. Illinois is leading pork producer in more than one sense……
- Arizona Bob - Tuesday, Jan 6, 15 @ 1:34 pm:
@Del
=Now that Magic Bruce is in charge, businesses will flock from Arizona to Illinois.=
Not as long as its -30F in Illinois while its 75F in Phoenix!
- Anonymous - Tuesday, Jan 6, 15 @ 1:42 pm:
If this is what Crain’s reports, kudos to Governor Quinn!! He’s done a great job. Now there are no police powers necessary, no armored tanks roaming the streets taking money from retirees to save this floundering state, sinking into oblivion!
- PublicServant - Tuesday, Jan 6, 15 @ 1:56 pm:
===Not as long as its -30F in Illinois while its 75F in Phoenix===
Yeah, but we have water here…just sayin.
- 47th Ward - Tuesday, Jan 6, 15 @ 1:58 pm:
===Yeah, but we have water here…===
And our water (and electricity for air conditioning) wasn’t paid for by the federal government. So in actuality, Illinois taxpayers have helped make it possible for Arizona to exist as a home to anything other than cactus and rattlesnakes.
You’re welcome Bob.
- A guy - Tuesday, Jan 6, 15 @ 2:26 pm:
Zona Bob,
Send 47 some turquoise. I’m sure it will be worn fashionably. lol.
- Arizona Bob - Tuesday, Jan 6, 15 @ 3:21 pm:
@47th
I forgot, 47th. Thanks for having the people you elected in the Dem party sending all those tax dollars to Arizona, since they were so wrapped up in LGBT and redistribution of wealth FROM Illinois to the rest of the nation that they dropped the ball!
- 47th Ward - Tuesday, Jan 6, 15 @ 3:43 pm:
Bob, don’t be a moron. U.S. taxpayers were spending billions making Arizona habitable long before either of us were born. Talk about redistributing wealth, between the dams, the air force bases, the highways and water diversion projects, that whole state should be paying a surcharge back to the rest of America.
And A Guy, maybe I could get a turquoise bolo tie or a belt buckle so I could blend in with the locals next time Sheriff Arpaio leads an anti-immigration march in Phoenix.
- Demoralized - Tuesday, Jan 6, 15 @ 3:43 pm:
==since they were so wrapped up in LGBT and redistribution of wealth ==
Come on Bob. You can do better than dopey talking points.
You’ve already demonstrated through previous comments that you are anti-gay. Fair enough. I wouldn’t expect you’d be excited by the gay marriage thing.
And that whole redistribution of wealth “argument” is cute but asinine.
- ZC - Tuesday, Jan 6, 15 @ 4:37 pm:
My favorite sentence in the Crain’s story is the commercial banker who warns that “the economy is still vulnerable to a shock—in the case of, say, a terrorist attack.”
Um, OK. Fearless prediction there.
- Rayne of Terror - Wednesday, Jan 7, 15 @ 9:53 am:
State Farm has hubs in all 50 states. The public plan is to consolidate those 50 hubs into three, in suburban Atlanta, Dallas, and Phoenix. Who knows what the future holds, but Ed Rust has represented to BloNo that headcount will not go down at Corporate HQ in the next several years. It’s all in the Pantagraph if you search “state farm hub” or “state farm arizona” etc.