Newton

JasperKankakee

Grundy

PorterLake

Kendall

Will

La Porte

DuPageKaneDeKalb

Cook

LakeMcHenry

Kenosha

Metropolitan ChicagoEconomic Trends and Potential

Presented by

Brian Harger, M.S., EDFP

Center for Governmental StudiesNorthern Illinois University

DeKalb, Illinois

September, 2013

Population DistributionChicago‐Naperville‐Michigan City, IL‐IN‐WI Combined Statistical Area, 2012

• In addition to having the biggest share of the region’s population, the “Collar Counties” also account of much of its growth.

• Between 2000 and 2012, the population in “Collar Counties” increased by 18%, while the Chicago declined 6.3%.

• The “Collar Counties” are projected to grow by 6.4% from 2012 to 2016 while the City of Chicago and the rest of Cook County declines (1.9%).

• The balance of the region will see a modest increase (3.0%).

Chicago-Naperville-Michigan City, IL-IN-WI Combined Statistical Area

2012 Population9,899,902

Collar Counties*3,416,347

35%

Balance of Cook County

2,516,49525%

City of Chicago2,714,856

27%

Balance of CSA**1,252,204

13%

2

Source: U.S. Census Bureau, Population Division. Release date: May, 2013.* Collar Counties include DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties in Illinois.** Balance of Combined Statistical Area includes Kankakee county in Illinois, Jasper, Lake, LaPorte, Newton and Porter counties in Indiana and Kenosha county in Wisconsin.

Population Trends1970 ‐ 2030

3

7,108,8488,597,437

9,863,639

11,125,82812,841,980

14,243,612

36,719,021

42,643,309

46,756,151

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

1970 1980 1990 2000 2010 2020 2030

Chicago Region

Illinois

Midwest Region*

Source: Woods & Poole Economics, Inc., 2013.* Rest of Midwest: Indiana, Iowa, Michigan, Missouri, Ohio, Wisconsin.

Projected

Population TrendsPercent Change by Age Group (1970 – 2020)

• Although the population in the region will continue to grow, especially in the “Collar Counties”, the aging of the population will present several challenges.

• The most important will be the growing demand for replacement workers as the “Baby Boomers” retire.

• While many older workers may continue working longer due to good health and financial necessity, a smaller number of young people entering the labor force will create shortages in many industries. 

4

34.8

%

28.8

%

26.0

%

26.8

%

25.1

%

24.0

%

23.4

%

56.5

% 61.3

%

62.6

%

62.2

%

63.4

%

61.8

%

59.2

%

8.7%

10.0

%

11.4

%

10.9

%

11.5

% 14.2

% 17.4

%

0%

10%

20%

30%

40%

50%

60%

70%

1970 1980 1990 2000 2010 2020 2030

Perc

ent o

f Tot

al P

opul

atio

n

Chicago-Naperville-Michigan City, IL-IN-WI CSA

Under 18 Years 18 to 64 Years 65 Years and Older

Source: Woods and Poole Economics, Inc., 2013.

Projected

Gross Regional ProductChicago‐Naperville‐Michigan City, IL‐IN‐WI CBSA*

• After three decades of rapid growth, the region’s economic expansion slowed significantly in the past decade.

• Between 2000 and 2010, GRP increased by 5. 1%, much less than the U.S. average of 15.1%.

• In 2010, the “collar counties” accounted for 32.2% of the region’s GRP.

• The region’s economic growth rate is projected to increase 18.6% through 2020, but lower than the projected U.S. growth (22.8%). 

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

1970 1980 1990 2000 2010 2020

Mill

ions

of D

olla

rs

Source: Woods & Poole Economics, Inc., 2013.Note: Figures are in constant (2005) dollars.

5

Percent Change

1970-1980 16.91980-1990 27.71990-2000 41.22000-2010 5.12010-2020 18.6

Gross Regional Product by Industry SectorShare of Total Gross Regional Product

6

Agriculture0.1%

Mining0.2%

Construction3.3%

Manufacturing11.0%

Transportation and Warehousing

3.4%

Information3.8% Utilities

1.3%

Wholesale Trade7.1%

Retail Trade4.2%

Finance and Insurance10.6%Real Estate and Rental and

Leasing14.7%

Professional and Business Services

11.4%

Administrative, Management and Waste Services

5.8%

Education1.1%

Health Care6.1%

Social Assistance0.6%

Leisure and Hospitality Services3.3%

Other Services2.7%

Government9.3%

Chicago 9‐County Region*, 2010

* Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties in Illinois.

Source: IMPLAN, 2010.

Income Trends(1970 – 2030)

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

1970 1980 1990 2000 2010 2020 2030

Per C

apita

Inco

me

Cook County Collar Counties* Balance of CSA** State of Illinois

• After several decades of rapid income growth, the “Collar Counties” experienced a decline in per capita income, unlike Cook County or the State of Illinois.

• Although many factors contributed to the decline, including the past recession, an increase in poverty and a decline in proprietor (i.e. small business) income are of particular concern.

• A return to growth is projected, but per capita income will still lag behind the State, as well as rest of the region.

7

Source: Woods & Poole Economics, Inc., 2013.* Collar Counties include: DeKalb, DuPage, Grundy, Kane Kendall, Lake, McHenry and Will.** The balance of the Combined Statistical Area includes: Kankakee County, Illinois; Kenosha County, Wisconsin; and Jasper, Lake, LaPorte, Newton and Porter counties in Indiana.Note: Figures are in constant (2005) dollars.

6.3% drop

Projected

Unemployment Trends2000‐2013

2.0

4.0

6.0

8.0

10.0

12.0

Une

mpl

oym

ent R

ate

City of Chicago Balance of Cook County Collar Counties* Illinois

Recession

• The region is enduring the longest period of high unemployment since the 1980’s.

• Although unemployment rates have fallen since the recession, they remain at historically high levels and are still above the national average.

• The “collar counties” have generally experienced lower unemployment levels.

8

Source: U.S. Bureau of Labor Statistics, 2013.Note: Data is not seasonally adjusted.* The Collar Counties includes DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.** Average for January through June, 2013.

Employment Changes in RegionComparison of Chicago and Selected Suburban Communities

• Although most suburban communities have seen significant job growth since the end of the recession, some are continuing to struggle.

• The City of Chicago lost over 75,000 jobs in the past recession and is still experiencing net job losses.

• This is a cause for concern for the “Collar Counties” because Chicago is the primary employment center of the region and many suburban residents are employed in the City.

9

-6.0%

-5.4%

-6.1%

-3.4%

-1.5%

-8.4%

-4.7%

-6.2%

-7.9%

-7.6%

-5.3%

-6.9%

-5.8%

-2.5%

21.2%

1.9%

3.3%

4.6%

7.3%

-3.3%

1.2%

5.8%

6.0%

6.7%

0.5%

-2.0%

-20.0% -10.0% 0.0% 10.0% 20.0% 30.0%

Chicago

Aurora

Naperville

Joliet

Elgin

Schaumburg

Waukegan

Evanston

Arlington Heights

Palatine

Bolingbrook

Skokie

Tinley Park

Percent Employment Change

June 2009 - June 2013

Dec. 2007 - June 2009

Newton

JasperKankakee2,436

Grundy2,102

Porter3,004Lake

16,946

Kendall5,809

Will39,180

La Porte622

DuPage67,429

Kane19,866

DeKalb1,837

Cook911,914

Lake33,054

McHenry12,490

Kenosha1,549

Chicago

All Other  Locations57,328

Commuting PatternsWhere Workers LiveWho are Employed in the City of Chicago by County

• Approximately 182,000 workers who live in the “collar counties” commute to jobs in Chicago.

• The majority of commuting workers (71%)are employed in service related jobs.

• Trade, transportation and utilities account for about 20% of commuting workers.

10

Source: U.S. Census Bureau, Center for Economic Studies, Local Employment Dynamics program, 2013.

Cook County

Collar Counties

Balance of CSA

Newton

JasperKankakee2,436

Grundy2,102

Porter480Lake

4,573

Kendall627

Will11,615

La Porte199

DuPage58,877

Kane8,334

DeKalb720

Lake24,016

McHenry2,099

Kenosha245

Cook847,019

Chicago

All Other  Locations29,421

Commuting PatternsWhere Workers are EmployedWho Live in the City of Chicago by County

• Approximately 108,000 workers who live in Chicago commute to jobs in the “collar counties”.

• The majority (57%) of commuting workers are employed in service related jobs.

• Chicago commuters also tend to earn less at their suburban jobs (44% earn $40K or more per year vs. 63% for commuting workers from the “collar counties”.

11

Cook County

Collar Counties

Balance of CSA

Source: U.S. Census Bureau, Center for Economic Studies, Local Employment Dynamics program, 2013.

Employment Changes in the RegionComparison of Industry Sectors

• The professional and business services sector has made a significant recovery, but growth in other sectors has been weak or continues to decline. 

• Education and health services and leisure and hospitality were the only sectors that increased employment during the recession and have continued to do so. 

• Nearly three‐fourths of the jobs lost during the recession were in the manufacturing, business and professional services, and retail trade sectors. 

12

-6.0%

-16.7%

-19.0%

-14.0%

-7.7%

-11.5%

-9.0%

-8.0%

-7.4%

-10.1%

2.6%

3.1%

-0.5%

1.3%

3.3%

-28.6%

-11.1%

0.5%

3.2%

-0.4%

5.3%

-1.3%

-1.4%

14.2%

8.5%

6.2%

-1.3%

-3.9%

-30% -20% -10% 0% 10% 20%

Total Non-Farm Employment

Mining and Logging

Construction

Manufacturing

Wholesale Trade

Retail Trade

Transportation and Utilities

Information

Financial Activities

Professional and Business Services

Educational and Health Services

Leisure and Hospitality

Other Services

Government

Percent Change

Chicago-Naperville-Michigan City, IL-IN-WI CSA

June 2009 - June 2013 Dec. 2007 - June 2009

Source: U.S. Bureau of Labor Statistics, 2013.

Employment Concentration by SectorChicago‐Naperville‐Michigan City, IL‐IN‐WI CSA*, 2011

13

*The Chicago-Naperville-Michigan City IL-IN-WI Combined Statistical Area (CSA) consists of Cook, DeKalb, DuPage, Grundy, Kane Kankakee, Kendall, Lake, McHenry and Will counties in Illinois; Jasper, Lake, LaPorte, Newton, and Porter counties in Indiana; and Kenosha county in Wisconsin.

Source: StatsAmerica.org; the Purdue Center for Regional Development and the Indiana Business Research Center, 2013.

AdvancedMaterials

Agribusiness,Food ProcessingAnd Technology

Appareland Textiles

Arts, Entertainment,Recreation andVisitor Services

Bio-MedicalBio-Technical

Business andFinancial Services

Chemical andChemical-Based

ProductsDefense

And Security

Education andKnowledge Creation

Energy

Forest andWood Products Glass and

Ceramics

InformationTechnology and

Telecommunications

TransportationAnd Logistics

PrimaryMetal Mfg.

Fabricated MetalProducts Mfg.

MachineryMfg.Computer and

Electronics Mfg. Electrical Equipment,Appliance and

Component Mfg.

TransportationEquipment Mfg.

Mining

Printing andPublishing

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7

Cha

nge

in E

mpl

oym

ent C

once

ntra

tion

2007

-20

11

Employment Concentration(Location Quotient)

Growing EmploymentLow Concentration

Low ConcentrationDeclining Employment

Growing EmploymentHigh Concentration

High Concentration Declining Employment

Opportunities for Job GrowthProfessional and Business Services

• Despite significant job losses during the recession, this sector has rebounded strongly adding 96,000 jobs since June 2009.

• Professional and business services currently represents 17.3% of non‐farm employment in the region.

• Professional, technical and managerial occupations account for about 50% to 65% of the jobs in this industry with most requiring at least a four‐year degree.

• The areas of the greatest projected job growth through 2020 include employment services (20,200 jobs), computer systems design (19,900 jobs), management, scientific and technical services (17,300 jobs) and services to buildings and dwellings (14,300 jobs). 

14

Opportunities for Job GrowthEducation and Health Services

• This was one of the few sectors that experienced employment growth through the recession, adding 12,400 jobs (a 3.1% increase). 

• The industry continued its strong performance, growing by 8.5% or 52,800 jobs since June, 2009 and it is projected to add 116,000 jobs between 2013 and 2020.

• The region’s population is aging quickly and life expectancy of seniors is increasing. This will fuel demand for healthcare services and creating jobs opportunities.

• Demographic changes in the workforce and the pace of technological changes will drive innovation in education and worker training at all levels.

15

Opportunities for Job GrowthManufacturing

• The recent trend toward “re‐shoring” of some manufacturing activities holds significant job creation potential.

• The looming demand for workers to replace retiring “Baby Boomers” will be the primary source of job openings in manufacturing over the next decade. 

• Over 8,500 new production workers per year will be needed to replace retiring workers through 2020. The replacement demand will also be strong for managerial, professional and technical positions.

• However, a higher level of training and skills will be needed to work with more complex production technologies (e.g., robotics, 3D printing and nanomanufacturing). 

16

Opportunities for Job GrowthTransportation and Warehousing

• Chicago is a principal hub of the North American road, rail, inland waterway and air transportation networks, giving it a significant competitive advantage in transportation and distribution activities.

• Transportation and warehousing accounts for a relatively small share of total employment, but has grown steadily in the past two decades and provides critical support the region’s manufacturing, wholesale, retail and agricultural sectors. 

• Despite slowing economic growth and unstable fuel prices, employment has rebounded since the recession, has added 10,000 jobs since June, 2009 and is projected to add 13,700 jobs between 2013 and 2020.

17

Keys to Future Employment Growth

• Restore state and local government finances.• Re‐shoring higher value‐added manufacturing activities.• Demand for replacement workers as “Baby Boomers” retire 

will be the primary source of job openings.• Demand for healthcare and services to seniors (especially 

housing, travel and recreation) will continue to grow as the population ages.

• Continued growth in domestic energy production (especially natural gas).

• Investments in transportation and logistics infrastructure.• Innovations in education and worker training.

18

For More Information

Brian Harger, M.S., EDFPResearch Associate

E‐mail: bharger@niu.edu

Center for Governmental StudiesNorthern Illinois University

DeKalb, IllinoisWebsite: www.cgsniu.org

19