Illinois is not a homogenous economic unit, but is comprised of many regional economies. Understanding these economies individually is vital for understanding Illinois as a whole. Toward this end, the Regional Economics Applications Laboratory, a unit within IGPA, has developed metropolitan statistical area (MSA) indices to capture economic activity data for Illinois’ regional economies, forecasting their performance in 2010. These indices show that trends in the aggregate Illinois economy can hide significant variation in regional economic performance.

The data show that the historical economic well-being of an MSA is not necessarily the key indicator of its future trajectory. Bloomington-Normal and Springfield outperformed their peers in 2007 but Springfield’s index declined more rapidly than the others in 2008, and is forecast to recover more slowly than its peers in 2010. In contrast, Bloomington-Normal has mirrored its peers in 2008-2009 and is forecast to grow a little more rapidly in 2010. Rockford outperformed other MSAs throughout 2008 but is expected to underperform them in 2010. Champaign-Urbana’s performance has been variable, sometimes vastly outperforming peers, sometimes underperforming them. This trend is expected to continue. Chicago, the largest regional economy in Illinois, underperformed the composite index for all but the first few months of 2006 and is expected to continue to do so in 2010. There appears to be a slight upward trend in Chicago’s index. Davenport-Rock Island-Moline has slightly underperformed its peers in the last two years but the data suggest that this gap will slowly close throughout 2010. Also, Decatur and Peoria are expected to grow more rapidly than others this year.

The data show that MSAs with strong manufacturing activity will likely experience more difficulties in affecting recovery in 2010. Throughout these MSAs, there is a significant dependence on the rest of the Midwest. This region, especially Ohio and Michigan, has experienced downturns that are even greater than Illinois. Recovery for Illinois and its MSAs will be heavily dependent on the success that other Midwestern states have in re-growing their economies. Illinois has not yet invested enough effort into gaining an understanding of the challenges the economy faces. Illinois shares a similar economic structure to the nation, yet job growth has lagged the rest of the country across all major sectors since 1990. Understanding why this has happened will require some intensive research into the make-up and functioning of Illinois’ regional economies. Without this understanding, economic development progress could be limited.