Analyst: State economy lags national growth
The economist who assembles the Illinois Flash Index, an ongoing measure of economic activity, said the state continues to lag the nation in several economic categories.
J. Fred Geirtz, a University of Illinois professor emeritus and a member of the university’s Institute of Government and Public Affairs, said Illinois’ anemic growth since the end of the 2009 recession continues to be lower than the country’s rate of growth – which also is anemic by traditional measurements.
“There’s a story within a story here,” Geirtz said. “Illinois continues to suffer from the weak national recovery, but we are growing even slower.”
On July 29, the Los Angeles Times said the U.S. Commerce Department published a report showing the rate of national economic growth stalling at 1.2 percent. A report in the St. Louis Post Dispatch on July 27 said the department’s figures showed Illinois growing at just 0.09 percent in the second quarter, which follows an almost zero growth rate in the first quarter.
“We are going in the right direction, just not as fast as the rest of the country,” Geirtz said of the rate of Illinois economic growth. “We are growing this year, but not as fast as we were even a year ago.”
Beyond the general economic problems facing the country, which Giertz said have affected the strength of the U.S. dollar and its effect on imports, he said Illinois faces several special challenges, including a struggling agricultural sector that has seen a drop in commodities prices.
Illinois’ well-publicized fiscal problems include billions in backlogged bills, an alarmingly underfunded pension system, and the inability of the Democrat-controlled state legislature to pass a budget for the past two years.
“How much of the state’s fiscal problems has contributed to the slowdown is difficult to figure,” Geirtz said, “but it’s very likely a contributing factor.”
The U of I Flash Index uses tax receipts to measure monthly economic output in the state. Any measure below 100 on the index indicates a retraction; measures over 100 are considered growth.
The Illinois rate has remained steady at around 105 for the past year after reaching a high of 107.1 last April. In the months between 2009 and 2011, the rate did not go above 100 and reached a low of 90.
–Illinois News Network