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Northwest Illinois Economic Trends and Growth Opportunities
The document presents an analysis of economic trends and growth opportunities in the TCEDA region of northwest Illinois, highlighting population changes, GDP, employment sectors, and business startups. Key points include a decline in manufacturing jobs alongside the rise of lower-paying service sector roles, and potential growth opportunities in business startups and agricultural sectors. Recommendations emphasize promoting skilled job opportunities and addressing the needs of an aging population while leveraging regional assets for economic development.
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Northwest Illinois Economic Trends and Growth Opportunities
- 1. JoDaviess Carroll Whiteside Green Rock Stephenson Ogle Lee Jones Cedar Jackson Clinton DubuqueDelaware Winnebago Boone Henry Bureau Scott Rock Island Lafayette Grant Iowa Northwest Illinois Economic Trends and Growth Opportunities (Determining the Size of the Pie) Norman Walzerand Brian Harger Presented to TCEDA Annual Conference Chestnut Mountain Resort Galena, IL March 20, 2014
- 2. Presentation Overview • Population and Economic Trends • Composition of TCEDA Economy •Business Starts and Entrepreneurship Opportunities • Possible Areas for Growth • Where Can We Go Next? 2
- 3. ‐0.5% ‐0.4% ‐4.3% ‐0.3% ‐7.3% ‐4.0%‐4.5% 7.0% ‐4.7% ‐15.2% ‐21.8% ‐22.2% 0.5% 22.3% 38.3% 50.0% 24.8% 6.0% ‐35% ‐20% ‐5% 10% 25% 40% 55% 70% Percent Change 2013‐2025 Population Age Cohort Source: Woods & Poole Economics, Inc., 2013 Decrease less than 100 Decrease by 600 Decrease less than 100 Decrease by 2,800 Increase by 1,500 Increase by 2,600 Generation Alpha Generation Z Millennial Baby Bust (Generation X) Baby Boom Silent Generation Population and Work Force Trends TCEDA Region 2013‐2025 3
- 4. Economic Trends Per Capita Gross Domestic Product Being mostly rural, the TCEDA region has a lower GDP than Illinois as a whole. Per capita GDP and the rate of growth are average for non‐ metro counties in Illinois. In the past four decades increasing urbanization resulted in a widening disparity in economic growth between cities, suburbs and rural areas. 4 *The TCEDA Regionconsists of Carroll, JoDaviess and Whiteside counties in Illinois. Source: Woods and Poole Economics, Inc., 2013. $18,640 $29,855 $16,992 $30,397 $23,874 $50,320 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 1970 1980 1990 2000 2010 2013 2020 PerCapita GDP Constant (2005) Dollars Per Capita GDP (1970-2020) TCEDA Region* TCEDA Region Non-Metro Counties State of Illinois
- 5. Income Trends Earning Per Worker by Industry Manufacturing jobs pay more than other sectors. Despite a steep decline in employment, earnings per job in manufacturing are still more than 1.5 times the regional average for all sectors. Although the service sector employs more people, earnings per job are 29% below the regional average and the rate of earnings growth has been relatively weak. $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 1970 19801990 2000 2010 2013 2020 EarningsperEmployee Earnings per Worker by Industry Sector TCEDA Region Manufacturing Services Government Government $52,738 Services $25,786 Manufacturing $61,401 Source: Woods & Poole Economics, Inc., 2013. Note: Figures are in constant (2005) dollars. 5
- 6. Employment Trends Employment by Industry Manufacturing, a major contributor to GDP, has continued to decline as a major employer. This decline reflects global competition, corporate mergers and acquisitions, and labor saving technologies (e.g. robotics). Local factors, such as business costs, aging infrastructure, and labor supply also play a role. Service sector jobs have replaced many jobs lost in manufacturing, but pay less. 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 1970 1980 19902000 2010 2013 2020 PercentofTotalEmployment Employment by Major Industry Sector TCEDA Region Manufacturing Services Government Source: Woods & Poole Economics, Inc., 2013. Services 37.1% Manufacturing 10.9% Government 13.7% 6
- 7. 7.6% JoDaviess 8.7% 8.9% Carroll 4.8% 9.5% Whiteside 2.6% 6.0% Green 0.2% 8.1% Rock 0.2% 10.1% Stephenson 9.6% 10.7% Ogle 7.0% 9.2% Lee 5.2% 5.5% Jones 0.3% 4.1% Cedar 0.6% 5.4% Jackson 1.7% 5.4% Clinton 4.5% 4.5% Dubuque 7.9% 4.0% Delaware 3.1% 11.6% Winnebago 1.3% 11.5% Boone 1.1% 7.8% Henry 3.0% 9.6% Bureau 7.7% 6.0% Scott 3.0% 7.9% Rock Island 4.2% 5.6% Lafayette 1.0% 5.8% Grant 2.2% 6.2% Iowa 0.1% Employment Trends Tri‐State Region LEGEND Illinois =9.2% 0.4% Iowa = 4.8% 0.6% Wisconsin = 6.7% 0.2% U.S. = 7.4% 6.1% Source: U.S. Bureau of Labor Statistics. Data are not seasonally adjusted. Top Figure: 2013 Unemployment Rate Bottom Figure: Percent Change in Non-Farm Employment July, 2009 – January, 2014 Lower unemployment rates in the past 3 years mostly reflect declining labor force participation. Non‐farm employment has continued to fall in most of the region since the end of the recession. 7
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- 9. Economic Composition Gross Domestic Product by Industry (2012)* Industry Sector CarrollCounty JoDaviess County Whiteside County TCEDA Region Agriculture and Related Activities 13.8% 6.7% 4.7% 6.4% Mining 0.1% 0.1% 0.2% 0.1% Utilities 1.2% 2.7% 0.2% 0.8% Construction 3.6% 4.7% 2.4% 3.1% Manufacturing 15.0% 12.2% 26.9% 22.0% Wholesale Trade 7.4% 2.9% 4.7% 4.7% Retail Trade 7.3% 7.3% 5.7% 6.3% Transportation and Warehousing 3.3% 4.6% 11.9% 9.1% Information 0.7% 0.9% 1.1% 1.0% Finance, Insurance and Real Estate 21.9% 23.1% 15.2% 17.9% Professional and Technical Services 3.0% 3.4% 3.5% 3.4% Management of Companies and Enterprises 0.2% 0.9% 0.0% 0.3% Administrative and Waste Services 1.7% 3.9% 2.2% 2.7% Education 0.0% 0.2% 0.3% 0.3% Health Care and Social Assistance 3.2% 2.5% 3.7% 3.3% Arts, Entertainment, and Recreation 0.3% 1.9% 0.3% 0.7% Accommodation and Food Services 2.1% 8.2% 2.1% 3.5% Other Services 5.1% 5.0% 2.9% 3.6% Government 9.9% 8.6% 12.0% 11.0% Total Gross Domestic Product $507,041,832 $863,260,322 $2,471,948,536 $3,842,250,690 . *Percent of Total GDP, 2012. Source: Purdue Center for Regional Development & Bureau of Labor Statistics, Quarterly Census of Employment and Wages 9
- 10. Area Name Business Starts Business Start Rate (% 2004 Firms) Business Starts per 1,000 Population Carroll, Jo Daviess, and Whiteside Counties 1773.5% 0.45 Illinois Non‐metro Counties 2,947 4.0 1.74 Iowa Non‐metro Counties 3,783 4.6 2.81 Wisconsin Non‐metro Counties 1,605 6.1 3.12 Comparison of Business Starts 2004‐2007 Source: The Brandow Company, BizMiner, 2010. 10
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- 12. Entrepreneurial Groups Population Cohorts Related to Business Starts (850 Counties in 9 Midwestern States, 2004‐2007) • Unemployed • Pre‐retirees (Persons between 56 and 64 years of age) •Small Farmers (250 acres or less) • Hispanic Population • Women between 25 and 34 years of age R2 adj. = .49 Source: Norman Walzer and Andy Blanke. 2013. “Business Starts in the Midwest: Potential Entrepreneurial Groups.” Community Development, 44:3, 336‐349. 12
- 13. Opportunities for Growth TCEDA Region • Proximity To Urban Growth Centers (E.G. Dubuque, Quad‐cities & Chicago) • Former Savanna Army Depot With Additional Investments in Infrastructure •Federal Prison Facility In Thomson Offers Business Opportunities for Suppliers plus Increased Housing and Retail Markets • “Re‐shoring” of Manufacturing Activities has Job Creation Potential • Local Food Movement Increases Markets for Agri‐business Firms • Proximity to Iowa And Wisconsin Provides Access to Broad Markets • Looming Demand for Workers to Replace Retiring “Baby Boomers” will be the Main Job Openings in the Next Decade • Higher Level of Training and Skills will be Required to Work with Complex Technologies (Robotics, 3D Printing And Nano‐manufacturing). 13
- 14. Where Can We Go From Here? • Promote and Support Business Startups and Expand 2nd Stage Companies. •Focus on More Skilled and High‐paying Job Opportunities. • Expand Training Opportunities to Replace Retiring Workers (“Boomers”). • Meet The Demands for Healthcare and Other Services for the Elderly (Especially Housing, Travel And Recreation). • Promote And Market High Quality Of Life And Regional Assets. • Use Quality Jobs To Attract And Retain Residents (Especially Youth). • Leverage Growth Opportunities In Tri‐state Area (e.g. I.T. in Dubuque; Farm Machinery Mfg. and Food Processing in Clinton and Quad Cities; Aerospace, Construction Machinery Mfg. and Auto Mfg. in Rockford & Peoria). 14
- 15. Additional Resources • B. Harger, M. Henriksen, N. Walzer, and A. Blanke. 2013. Promoting Prosperity in Northwest Illinois. DeKalb, IL: Center for Governmental Studies. •B. Harger, M. Henriksen, and N. Walzer. 2011. West Whiteside County, IL: Assessing Economic Opportunities. DeKalb, IL: Center for Governmental Studies. • N. Walzer and B. Harger. 2011. “Tri‐State Alliance Economy: Past Trends and Implications for the Future”. Presentation to Annual Meeting of Tri‐ State Alliance, Rockford, IL. • G.F. Hamm and N. Walzer. 2009. Stimulating Entrepreneurship in Carroll County. Macomb, IL: Illinois Institute for Rural Affairs. 15
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