Illinois Economic Overview
Three distinct geographic areas characterize the midwestern state of Illinois. The northern sector, dominated by Chicago, the largest city in the Midwest, is primarily industrial. The middle plains, known as the "Heart of Illinois," are divided between manufacturing and agriculture. The southern division, near the juncture of the Mississippi and Ohio rivers, is characterized by rough topography, oil deposits, and coal mines.
Illinois has a strong $590 billion economy and is the sixth largest state for exports in the country. (Annual exports total more than $53.4 billion.) The Illinois educational system boasts excellent universities that turn out highly professional and skilled workers and serve as important research centers in the fields of technology and information systems. The 76,000 farms in Illinois produce corn, soybeans, and dairy products and raise hogs and cattle. Agricultural commodities generate $9 billion annually.
After the territory was admitted to the Union in 1818, efforts to promote economic development ended in failure. In the 1830s, when three state banks failed, an extensive program to build roads, canals, and railroads collapsed, and the state was left with huge debt. However, settlers attracted by the rich fertile soil and intricate water routes continued to pour into the state.
By the time slavery was abolished in 1856, a reform program that supported construction of schools and commercial and industrial expansion was implemented. Businesses took advantage of the railroads, and soon small towns, banks, grain elevators, and retail shops began spreading across the state.
After the great fire of 1871, which devastated downtown Chicago, wealthy citizens took it upon themselves to rebuild, constructing massive steel mills, meatpacking plants, and factories. By 1893 Chicago was the second largest American city, with rapid growth in retailing, banking, and transportation. After the Great Depression, in which many industries shut down, numerous military contracts during World War II returned the state to prosperous times. Today, the 19,000 plants in Illinois make it one of the nation’s leaders in manufacturing.
Farming income is vital to the state economy. Corn, the most important crop, is usually sold as grain and feed for livestock. Revenues generated by corn production amount to $3.3 billion. Processed corn is sold as corn syrup, cornstarch, and fuel alcohol, all of which are used for various manufactured products. Other important farm products are soybeans, wheat, hay, oats, rye, and sorghum.
Livestock, including hogs and beef cattle, milk, chickens, and eggs, are all important products. Major fruit crops include apples, melons, and peaches. Vegetables grown include asparagus, cabbage, and beans. The Illinois agriculture sector ranks sixth in the country with revenue of $9.7 billion and exports of more than $3.8 billion. About 200,000 people live on Illinois’s 76,000 farms and contribute more than $1 billion to the state economy through agricultural revenue.
BANKING AND FINANCIAL SERVICES
Illinois, the financial center of the Midwest, is a global leader in securities and brokerage as well as banking, employing more than 340,000 workers. There are some 51,000 employees working in financial investment and related activities. The 155,000 workers employed by credit intermediation firms earn $7.4 billion in annual salaries. Illinois is home to over 2,300 commercial banks, almost 1,000 savings institutions, and more than 500 credit unions. Chicago is home to the Chicago Board of Trade, Chicago Mercantile Exchange, Chicago Stock Exchange, and the Chicago Board Options Exchange. Prominent banks in Illinois include HSBC North America Holdings Inc., Northern Trust Corporation, and Discover Financial Services.
Illinois leads the market in digital switching, fiber optics, and cellular service. Using the extensive infrastructure available, including hundreds of thousands of miles of fiber optic cable, businesses in rural farm communities are able to access digital switching technology the same as those in the larger cities, making it easier for all geographical areas to grow and prosper. There are some 59,000 workers in the telecommunications sector, earning annual salaries of $3.1 billion. The 20,000 employees of Internet publishing and broadcasting, Internet service providers, Web search portals, and data processing earn $1.4 billion, and this sector adds revenues of $2.4 billion to the economy.
The construction industry adds some $72.2 billion to the state’s annual economy, and its 30,200 companies support more than 270,000 jobs. Annual payroll amounts to $14.5 billion. Each year about 22,500 building permits are issued. The average yearly pay for construction workers is around $57,000. The construction trade suffered a severe blow as a result of the 2008–2009 recession, and the number of construction jobs decreased by 19 percent. Building permits issued during the third quarter of 2009 decreased by 39 percent from the same period in 2008. Contracts for future construction also dropped 52.6 percent in the third quarter of 2009 compared to 2008 figures.
Residents of Illinois place a high value on their education system, which ranks in the top five among states in state and local expenditures for elementary and secondary students. The state spends an average of $9,000 per elementary school pupil and $11,000 per pupil in secondary schools. There are some 166,500 teachers and school administrators working in public preschools through secondary schools and 23,500 in private schools, and the average teacher’s salary is $60,000. Approximately half of Illinois' students continue their education past high school, with numerous colleges and universities to choose from in the state. In 2007, there were more than 807,000 students enrolled in Illinois universities. The state appropriates almost $3 billion for institutions of higher learning.
Fuels produced in the state, such as ethanol and biodiesel, decrease the need for dependence on foreign oil while creating jobs and supporting agriculture. Illinois produces more than 800 million gallons of biofuels each year, amounting to more than $1.2 billion in revenue. Illinois is also the nation's leader in generating nuclear power and provides nearly one-eighth of the total U.S. coal reserves. There are 19 coal mines in the state, which produce 33 million tons of coal annually, employ some 3,400 workers, and generate close to $1 billion in gross revenues. Coal miners earn salaries of about $45,450 per year.
The diverse entertainment industry in Illinois enjoys a reputation for excellence. The performing arts industry adds some $2 billion to the annual economy. Chicago’s nonprofit arts industry generates $1.1 billion in revenue as well as more than 30,000 full-time jobs, $58.1 million in local government tax revenues, and $45 million in state tax revenues. The film industry generated $155 million in revenue and created more than 4,000 jobs in Illinois in 2007. The Illinois entertainment sector includes the world-famous Joffrey Ballet Company, the Midwest Ballet Theater, the famous Second City comedy troupe, and numerous symphony orchestras and choral groups.
Insurance is one of the largest industries in Illinois, contributing more than $18 billion in revenue. Total annual salaries top $10 billion for 142,500 direct employees, but the industry is also responsible for close to 327,000 insurance-related jobs and generates $370 million in annual tax revenue. Some prominent insurance carriers doing business in Illinois are Zurich American Insurance Company, Liberty Insurance Corporation, New Hampshire Insurance Company, and Illinois National Insurance Company.
Illinois is ranked as one of the country’s leaders in manufacturing, with annual value-added productivity reaching more than $107 billion. Chemical production (cleaning solutions, pharmaceuticals, industrial chemicals, paint, and resins) leads the manufacturing industry, with an added value of $18.3 billion. The production of machinery (farm machinery, machine tools, and construction equipment) follows with an added value of $13.4 billion. Next in line are processed foods, mainly bakery goods, breakfast cereal, sausages, spices, candy, dairy products, and soft drinks, which bring in another $12.9 billion. Other important manufacturing industries are fabricated metal products, transportation equipment, plastics and rubber products, and computer and electronic products. The total gross output of the state’s 18,900 manufacturers represents 33.7 percent of the Illinois gross state product, amounting to $76.6 billion.
MINING AND EXTRACTION
Hidden below 37,000 square miles of the Illinois surface lies enough coal to provide thousands of jobs for local residents and provide annual revenues of $1 billion. As a rich source of energy, coal production involves not only the mining sector, but transportation and utilization of the coal as well. Illinois now stands in ninth place among other coal-producing states, mining more than 35 million tons annually.
The coal reserves of Illinois contain more potential BTUs than even the rich oil reserves of Saudi Arabia and Kuwait. More than 90 percent of the coal mined in Illinois is used to produce electricity. Other products mined in the state include petroleum, crushed stone, sand, gravel clays, and an abrasive silica called tripoli.
Illinois nonprofits account for $60 billion in annual gross revenue. More than 30 percent of registered nonprofits in the state deal with human services followed by education, health care, public and societal benefit, and the arts and humanities. There are close to 7,450 nonprofits that report gross revenue of over $25,000 annually. Illinois ResourceNet coordinates nonprofits and government units with information and resources available through federal funding opportunities. Donors Forum, with over 1,200 members, provides educational programs, technical assistance, research and information, advocacy, and networking opportunities to the state’s nonprofits. The nonprofit sector employs more than 425,000 workers and supports an annual payroll in excess of $16.5 billion.
The Illinois sales tax system is exceptionally complicated. Chicago's tax system, which has the highest sales tax of any major U.S. city, is one of the most complex, with different taxes for different goods. The state collects some $8 billion in taxes on $132 billion in annual retail sales. Illinois employs about 640,000 workers in retailing and is home to nearly 100,000 firms. Salaries amount to $12.6 billion per year.
The technology industry is vital to Illinois' economy. Chicago is referred to as the "consulting capital" of America, and in 2007, there were more than 200,000 high-tech workers in Illinois earning annual salaries totaling $16.6 billion. The hundreds of federal research labs in the state focus on advanced materials, chemicals, energy technologies, transportation technology, and biotechnology. About 49,000 workers are employed in the biotechnology field and 73,000 in information technology.
Illinois is also home to many of the world’s leaders in the life sciences sector, with total sales of around $47.5 billion. These companies include Abbott Laboratories, Baxter International, TAP Pharmaceuticals, Hospira, Akzo Nobel, Medline Industries, and Abraxis BioScience. The National Center for Supercomputing Applications, the Center for the Application of Information Technologies, and University of Illinois Biotechnology Center are a few of the organizations researching information and communications technology in the state.
The state’s central location is a great asset in terms of air travel. Serving as a hub for domestic and international airlines, Chicago’s O’Hare International Airport is the second busiest airport in the world. Aircraft landing fees and passenger terminal charges that the city collects from the airlines serving O’Hare were $391 million in 2007. Of the 76.3 million passengers passing through the airport each year, more than 64 million are domestic travelers and 11.7 million are international travelers. In addition, 14 tons of cargo pass through the airport annually.
Three interstates and 35,500 miles of state highways serve local transportation and tourism. Illinois is also situated in the center of the country’s national rail network, making Chicago the largest U.S. rail gateway. More than 270 companies dealing in rail freight have estimated annual sales of $38 million and employ more than 9,000 workers. As another boon to business, the 1,118 miles of waterways bordering or passing through Illinois provide access to the Atlantic Ocean and the Gulf of Mexico. Around 123 million tons of goods and materials are shipped via water each year. The 112 shipping businesses have annual sales of around $9.7 billion and employ more than 4,300 workers. Chicago’s privately owned marina is a $3.6 million business.
The Illinois Department of Transportation has embarked on a multi-billion-dollar highway infrastructure development program aimed at jump-starting the state’s future development. The comprehensive $11.3 billion plan will start in 2010 to renovate roads and bridges and upgrade mass transit systems. The six-year project is expected to generate some 420,000 jobs, in part funded by the American Recovery and Reinvestment Act.
TRAVEL AND TOURISM
Illinois ranks sixth in the U.S. for foreign travelers and is the ninth most popular tourist site in the country. Tourism accounts for revenues of $30.8 billion annually. Domestic travelers spend some $25 billion a year generating around 300,000 jobs. International visitors to the state spend around $2.4 billion. Lodging results in revenues of $4.6 billion, while the 60,000 employees working in the tourism industry earn $1.1 billion per year.
Among many of Illinois' attractions are its numerous lakes and rivers, the Shawnee National Forest, the Caholia Mounds, state parks, historical sites, art museums, and the Illinois State Fair. Additional popular sites are the John Hancock Observatory, the Superman Museum, The Chicago Public Library (the world's largest public library), and the Willis Tower (formerly the Sears Tower), which is the tallest building in North America.
-World Trade Press