A monthly indicator of the Illinois economy has taken its first substantially positive steps in months, but it may be too soon to tell whether it is a sign that recovery is at hand.

The University of Illinois Flash Index rose to 90.7 in October, an increase of six-tenths of a point from the previous month and the first substantial increase since the current recession began in November 2007. The index, compiled for the university’s Institute of Government and Public Affairs (IGPA), is the first barometer of economic activity in Illinois each month.

“There has been some encouraging news about the economy recently, including a return to growth for Gross Domestic Product during the third quarter,” said economist J. Fred Giertz (right), who has compiled the Flash Index for IGPA since 1995. “But considerable concern remains about the strength of the recovery, as evidenced by weak consumer spending.

“One increase in the index, while positive news, is not decisive,” Giertz said.

The Flash Index has been on steady decline since July 2007, when it stood at 106.8. Any reading above 100 indicates economic expansion in the state, while indices below 100 reflect a contracting economy. The index has been below 100 since December 2008, and the October index is still the second-lowest level for the index since November 1983.

Signs of encouragement come from corporate income tax receipts in Illinois, which were up in real terms in October over the same month in 2008. However, individual income tax receipts and sales tax receipts, the other two components of the index, both were down.

The Flash Index is a weighted average of Illinois growth rates in corporate earnings, consumer spending and personal income. Tax receipts from corporate income, personal income and retail sales are adjusted for inflation before growth rates are calculated. The growth rate for each component is then calculated for the 12-month period using data through October 31, 2009.