The Illinois economy remains sluggish as the new year dawns, but it does continue to show signs of steady improvement, according to a monthly barometer of activity in the state.

The University of Illinois Flash Index increased to 91.2 in December, up from 91.0 in November. December’s reading was the third consecutive month of improvement for the index, which fell to 90 in September, its lowest point since 1983.

“This improvement reflects the continuing sluggish economy in the state despite the belief by most observers that the recession is technically over,” said economist J. Fred Giertz of the U of I Institute of Government and Public Affairs.

“The index ended the year well below the January 2009 reading of 97, but prospects are much brighter for 2010 than they were a year ago,” said Giertz, who has compiled the Flash Index for IGPA since 1995.

At 91.2, the December Flash Index is still well below 100, the dividing line between growth and contraction. The index had fallen for 26 consecutive months, until showing an uptick from 90 to 90.1 in October.

In real terms, all three components of the index were down in December from the same month last year. Even sales tax collections were lower in real terms compared to December 2008, despite reports that Christmas sales were up nationally.

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 December 31, 2009.