Economy of Illinois
Encyclopedia
The economy of Illinois
includes many industries. The Chicago
metropolitan area is home to many of the nation's largest companies, including Boeing
, McDonalds, Motorola
, and United Airlines
. The Chicago area economy headquarters a wide variety of financial institutions, and is home to the largest futures exchange
in the world, the Chicago Mercantile Exchange
.
The 2010 total gross state product
for Illinois was $630 billion, placing it fifth in the nation. The 2010 per capita income was $41,411. The state's industrial outputs include machinery, food processing, electrical equipment, chemical products, publishing, fabricated metal products, transportation equipment, petroleum and coal.
. Corn, soybeans, and other large-field crops are grown extensively. These crops and their products account for much of the state's economic output outside of Chicago. Much of the field crop is remanufactured into feed for hogs and cattle
. Dairy products and wheat are important secondary crops in specific segments of the state.
In addition, some Illinois farmers grow specialty crops such as popcorn
and pumpkin
s. The state is the largest producer of pumpkins among the U.S. states. There is a large watermelon
growing area centered on Lincoln, Illinois
. Illinois wine
is a growing industry. In December 2006, the Shawnee Hills were named Illinois's first American Viticultural Area
(AVA).
of Chicago, which from 1865 until 1971 penned and slaughtered millions of cattle and hogs into standardized cuts of beef
and pork
.
The centralized location of Illinois made it a key manufacturing hub, especially for farm machinery and specialty motor vehicle
s. Smaller Cities like Aurora, Peoria, Decatur, Rockford and other cities became major manufacturing centers in the 20th century. In downstate Illinois
, the John Deere
Company became one of the world's largest makers of farm machinery, and Caterpillar
achieved similar dominance in its diversified line of off-road vehicle
s.
The Chicago area, meanwhile, began to produce significant quantities of telecommunications gear, electronics, steel, automobiles, and industrial products.
As of 2004, the leading manufacturing industries in Illinois, based upon value-added, were chemical manufacturing ($16.6 billion), food manufacturing ($14.4 billion), machinery manufacturing ($13.6 billion), fabricated metal products ($10.5 billion), plastics and rubber products ($6.8 billion), transportation equipment ($6.7 billion), and computer and electronic products ($6.4 billion).
By the early 2000s, Illinois's economy had moved toward a dependence on high-value-added services such as financial trading, higher education
, logistics
, and medicine
. In some cases, these services clustered around institutions that hearkened back to Illinois's earlier economies. For example, the Chicago Mercantile Exchange, a trading exchange for global derivatives
, had begun its life as an agricultural futures market.
The Wall Street Journal summarized Illinois's economy in November 2006 with the comment that "Chicago has survived by repeatedly reinventing itself." Brat, Ilan, "Tale of a Warehouse", Wall Street Journal, Nov. 8, 2006, page A1.
publishes a "flash-index" that aims to measure expected economic growth in Illinois. The indicators used are corporate earnings, consumer spending
and personal income
. These indicators are measured through tax receipts, adjusted for inflation
. 100 is the base, so a number above 100 represents growth
in the Illinois economy, and a number below 100 represents a shrinking economy. Data from the index
, from 6/1981 to the present, can be found here.
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...
includes many industries. The Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
metropolitan area is home to many of the nation's largest companies, including Boeing
Boeing
The Boeing Company is an American multinational aerospace and defense corporation, founded in 1916 by William E. Boeing in Seattle, Washington. Boeing has expanded over the years, merging with McDonnell Douglas in 1997. Boeing Corporate headquarters has been in Chicago, Illinois since 2001...
, McDonalds, Motorola
Motorola
Motorola, Inc. was an American multinational telecommunications company based in Schaumburg, Illinois, which was eventually divided into two independent public companies, Motorola Mobility and Motorola Solutions on January 4, 2011, after losing $4.3 billion from 2007 to 2009...
, and United Airlines
United Airlines
United Air Lines, Inc., is the world's largest airline with 86,852 employees United Air Lines, Inc., is the world's largest airline with 86,852 employees United Air Lines, Inc., is the world's largest airline with 86,852 employees (which includes the entire holding company United Continental...
. The Chicago area economy headquarters a wide variety of financial institutions, and is home to the largest futures exchange
Futures exchange
A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts; that is, a contract to buy specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. These types of...
in the world, the Chicago Mercantile Exchange
Chicago Mercantile Exchange
The Chicago Mercantile Exchange is an American financial and commodity derivative exchange based in Chicago. The CME was founded in 1898 as the Chicago Butter and Egg Board. Originally, the exchange was a non-profit organization...
.
The 2010 total gross state product
Gross state product
Gross state product is a measurement of the economic output of a state or province...
for Illinois was $630 billion, placing it fifth in the nation. The 2010 per capita income was $41,411. The state's industrial outputs include machinery, food processing, electrical equipment, chemical products, publishing, fabricated metal products, transportation equipment, petroleum and coal.
Agriculture
Most of the state of Illinois lies outside of the Chicago urban,area and inside the North American Corn BeltCorn Belt
The Corn Belt is a region of the Midwestern United States where corn has, since the 1850s, been the predominant crop, replacing the native tall grasses. By 1950, 99% of the corn was grown from hybrids. Most corn is fed to livestock, especially hogs and poultry. In recent decades soybeans have...
. Corn, soybeans, and other large-field crops are grown extensively. These crops and their products account for much of the state's economic output outside of Chicago. Much of the field crop is remanufactured into feed for hogs and cattle
Cattle
Cattle are the most common type of large domesticated ungulates. They are a prominent modern member of the subfamily Bovinae, are the most widespread species of the genus Bos, and are most commonly classified collectively as Bos primigenius...
. Dairy products and wheat are important secondary crops in specific segments of the state.
In addition, some Illinois farmers grow specialty crops such as popcorn
Popcorn
Popcorn, or popping corn, is corn which expands from the kernel and puffs up when heated. Corn is able to pop because, like sorghum, quinoa and millet, its kernels have a hard moisture-sealed hull and a dense starchy interior. This allows pressure to build inside the kernel until an explosive...
and pumpkin
Pumpkin
A pumpkin is a gourd-like squash of the genus Cucurbita and the family Cucurbitaceae . It commonly refers to cultivars of any one of the species Cucurbita pepo, Cucurbita mixta, Cucurbita maxima, and Cucurbita moschata, and is native to North America...
s. The state is the largest producer of pumpkins among the U.S. states. There is a large watermelon
Watermelon
Watermelon is a vine-like flowering plant originally from southern Africa. Its fruit, which is also called watermelon, is a special kind referred to by botanists as a pepo, a berry which has a thick rind and fleshy center...
growing area centered on Lincoln, Illinois
Lincoln, Illinois
Lincoln is a city in Logan County, Illinois, United States. It is the only town in the United States that was named for Abraham Lincoln before he became president; he practiced law there from 1847 to 1859. First settled in the 1830s, Lincoln is home to three colleges and two prisons. The three...
. Illinois wine
Illinois wine
Illinois wine refers to any wine that is made from grapes grown in the U.S. state of Illinois. In 2006, Shawnee Hills, in southern Illinois, was named the state's first American Viticultural Area. As of 2008, there were 79 wineries in Illinois, utilizing approximately of vines.-History:Grapes...
is a growing industry. In December 2006, the Shawnee Hills were named Illinois's first American Viticultural Area
American Viticultural Area
An American Viticultural Area is a designated wine grape-growing region in the United States distinguishable by geographic features, with boundaries defined by the Alcohol and Tobacco Tax and Trade Bureau , United States Department of the Treasury....
(AVA).
Manufacturing
Illinois's manufacturing sector grew out of its agricultural production. A key piece of infrastructure for several generations was the Union Stock YardsUnion Stock Yards
The Union Stock Yard & Transit Co., or The Yards, was the meat packing district in Chicago for over a century starting in 1865. The district was operated by a group of railroad companies that acquired swampland, and turned it to a centralized processing area...
of Chicago, which from 1865 until 1971 penned and slaughtered millions of cattle and hogs into standardized cuts of beef
Beef
Beef is the culinary name for meat from bovines, especially domestic cattle. Beef can be harvested from cows, bulls, heifers or steers. It is one of the principal meats used in the cuisine of the Middle East , Australia, Argentina, Brazil, Europe and the United States, and is also important in...
and pork
Pork
Pork is the culinary name for meat from the domestic pig , which is eaten in many countries. It is one of the most commonly consumed meats worldwide, with evidence of pig husbandry dating back to 5000 BC....
.
The centralized location of Illinois made it a key manufacturing hub, especially for farm machinery and specialty motor vehicle
Motor vehicle
A motor vehicle or road vehicle is a self-propelled wheeled vehicle that does not operate on rails, such as trains or trolleys. The vehicle propulsion is provided by an engine or motor, usually by an internal combustion engine, or an electric motor, or some combination of the two, such as hybrid...
s. Smaller Cities like Aurora, Peoria, Decatur, Rockford and other cities became major manufacturing centers in the 20th century. In downstate Illinois
Downstate Illinois
Downstate Illinois refers to all of Illinois outside of the Chicago metropolitan area. This term is flexible, but because it is generally meant to refer to everything outside the Chicago-area, some cities in Northern Illinois, such as Rockford and DeKalb, , are considered to be "downstate".The term...
, the John Deere
John Deere
John Deere was an American blacksmith and manufacturer who founded Deere & Company, one of the largest and leading agricultural and construction equipment manufacturers in the world...
Company became one of the world's largest makers of farm machinery, and Caterpillar
Caterpillar Inc.
Caterpillar Inc. , also known as "CAT", designs, manufactures, markets and sells machinery and engines and sells financial products and insurance to customers via a worldwide dealer network. Caterpillar is the world's largest manufacturer of construction and mining equipment, diesel and natural gas...
achieved similar dominance in its diversified line of off-road vehicle
Off-road vehicle
An off-road vehicle is considered to be any type of vehicle which is capable of driving on and off paved or gravel surface. It is generally characterized by having large tires with deep, open treads, a flexible suspension, or even caterpillar tracks...
s.
The Chicago area, meanwhile, began to produce significant quantities of telecommunications gear, electronics, steel, automobiles, and industrial products.
As of 2004, the leading manufacturing industries in Illinois, based upon value-added, were chemical manufacturing ($16.6 billion), food manufacturing ($14.4 billion), machinery manufacturing ($13.6 billion), fabricated metal products ($10.5 billion), plastics and rubber products ($6.8 billion), transportation equipment ($6.7 billion), and computer and electronic products ($6.4 billion).
Services
By the early 2000s, Illinois's economy had moved toward a dependence on high-value-added services such as financial trading, higher education
Higher education
Higher, post-secondary, tertiary, or third level education refers to the stage of learning that occurs at universities, academies, colleges, seminaries, and institutes of technology...
, logistics
Logistics
Logistics is the management of the flow of goods between the point of origin and the point of destination in order to meet the requirements of customers or corporations. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and...
, and medicine
Medicine
Medicine is the science and art of healing. It encompasses a variety of health care practices evolved to maintain and restore health by the prevention and treatment of illness....
. In some cases, these services clustered around institutions that hearkened back to Illinois's earlier economies. For example, the Chicago Mercantile Exchange, a trading exchange for global derivatives
Derivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...
, had begun its life as an agricultural futures market.
The Wall Street Journal summarized Illinois's economy in November 2006 with the comment that "Chicago has survived by repeatedly reinventing itself." Brat, Ilan, "Tale of a Warehouse", Wall Street Journal, Nov. 8, 2006, page A1.
Flash index
The Institute of Government and Public Affairs at the University of IllinoisUniversity of Illinois at Urbana-Champaign
The University of Illinois at Urbana–Champaign is a large public research-intensive university in the state of Illinois, United States. It is the flagship campus of the University of Illinois system...
publishes a "flash-index" that aims to measure expected economic growth in Illinois. The indicators used are corporate earnings, consumer spending
Consumer spending
Consumer spending or consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level...
and personal income
Personal Income
In economics, personal income refers to an individual's total earnings from wages, investment enterprises, and other ventures....
. These indicators are measured through tax receipts, adjusted for inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
. 100 is the base, so a number above 100 represents growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
in the Illinois economy, and a number below 100 represents a shrinking economy. Data from the index
Index (economics)
In economics and finance, an index is a statistical measure of changes in a representative group of individual data points. These data may be derived from any number of sources, including company performance, prices, productivity, and employment. Economic indices track economic health from...
, from 6/1981 to the present, can be found here.