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Factories remain key to Illinois' economy—especially downstate

Crain's Chicago Business

Wednesday, May 15, 2019  |  Article  |  Greg Hinz

Economic Development (35) , Economy (34)

A study commissioned by the Illinois Manufacturers' Association finds that despite recent losses, 592,000 people work in Illinois factories, producing 12 percent of the state's gross product.

 

Illinois may not be the manufacturing power it once was, but factories in the state still provide $52 billion a year in wages and benefits and employ more than 592,000 people in direct industrial jobs.

 

That's the bottom line of a new report prepared for the Illinois Manufacturers Association by a University of Maryland research group that suggests that while some things have changed in the state’s economy, others very much have remained the same.

 

"Despite the fact that people think manufacturing is going away," it’s not, says IMA President Mark Denzler, who commissioned the study by the Inter-Industry Forecasting unit, or Inforum. But, he adds, the industry could use some help.

 

Meanwhile, the top line of the study is pretty interesting.

 

Along with those 592,000 people who work for factories, another 434,000 work for suppliers. Their combined income and spending has created another 525,000 jobs, the report asserts. Combined, that’s 1.5 million people with a gross output of $468 billion a year. Direct employment alone represents one job in eight in the state and 12 percent of its gross state product.

 

More interesting, though, are the breakdowns of which industries are the biggest, and where they’re located.

 

The biggest industry is food products, with about 93,000 of the statewide total of 592,000 people who work for manufacturers. Immediately after that are fabricated metal producers at 92,000, machinery makers (think Caterpillar and Deere) at 71,000, and chemical manufacturing and plastics and rubber producers at about 43,000 each. But if the value of suppliers is added in, the pharmaceutical and medical equipment industry, focused in Lake County, moves into second place.

That’s significant, because according to the study, a whopping 27.5 percent of Lake County’s gross product comes from manufacturing. That’s larger than any other county in the Chicago metropolitan area and a sign of how important those businesses are in that county.

 

In most of the rest of the metropolitan area, white-collar business rule. In DuPage County, for instance, just 9.3 percent of gross product comes from manufacturers. And while Cook has way more people working in industrial jobs than any other county—193,000—just 7.1 of its product comes from that, barely half of the statewide figure.

 

That may explain why, when manufacturing biz crashes, or rises, it disproportionately affects downstate areas, including counties such as Tazewell (30.9 percent), Winnebago (23.4 percent), Peoria (22 percent), Madison (20.6 percent), Macon (40 percent) and Vermilion (27.2 percent). And though lots of other factors are involved, that explains to some degree how people vote the way they do, with Donald Trump far more popular in downstate areas than he is in Cook County.

 

Denzler said Gov. J.B. Pritzker seemed to acknowledge the importance of manufacturing when he recently endorsed making permanent the state’s research and development credit. "That’s the lifeblood of our industry," Denzler said. Legislation that would accomplish that is pending.

 

Denzler ducked a question on whether Trump’s tariffs have helped or hurt. A whopping 93 percent of Illinois’ exports are manufactured products, including processed foods, he noted. But some firms, such as jetmaker Boeing, have been hurt by the trade battle with China.