A new report on Illinois' economic outlook was released recently by the Illinois Commission on Government Forecasting and Accountability. The report was prepared by Moody's for the bipartisan economic forecasting service agency of the General Assembly.
According to the report, the state's manufacturing will continue to occupy a greater than average position in the Illinois economy but Illinois will have to fight to maintain its manufacturing base. Currently manufacturing is the single largest contributing sector to the state's economy at roughly 13 percent of state GDP. However, the report notes that since 1998, Illinois has lost more than 240,000, about 26 percent, of the sector's total employment and says the losses are expected to be permanent.
"Moody's report highlights what we've been saying," says Gregory W. Baise, president & CEO of the Illinois Manufacturers' Association. "There has to be a public and private sector resolve to make manufacturing in Illinois a priority. Otherwise it's likely we will continue this unacceptable trend for the foreseeable future."
Illinois' largest manufacturing sub-sectors include food processing, fabricated metals, chemicals, plastics and transportation equipment and Baise notes that almost 75 percent of the current 11,227 manufacturing companies in the state employ less than 50 workers. Experts say that for every manufacturing job in Illinois, an additional 3.7 jobs are created to support industry.
The report also suggests that exports hold some promise for the long term viability of manufacturing in the state due to growth in developing countries, particularly in Asia. Earlier this year the U.S. Commerce Department reported Illinois ranked sixth among the states for exports in 2007 and sent $48.7 billion in goods to countries around the world.
However, Baise notes that state government has seemingly turned a blind eye to manufacturing and that may be a risky gamble given global competition. Baise says there is a real danger that unless Illinois' business climate changes, it's likely, and Moody's agrees, that more companies will seek friendlier locations.
"Government leaders have to understand that tax incentives that can help create thousands of new jobs in Illinois is not corporate welfare," Baise said. "We can grow and strengthen our state economic base with jobs that pay $55,000 annually, on average, and provide family health care and retirement benefits. Or, we can turn our backs on these jobs and continue the exodus until we have no industry left.
"We've lost over a quarter of our industrial base in the last ten years. At this rate we stand to lose every manufacturing job before mid-century and that would be a travesty."
The Illinois Manufacturers' Association has proposed a number of initiatives to reverse the current trend. These initiatives include investing in skilled education programs to develop a manufacturing work force second to none; gaining control over runaway systemic costs associated with unemployment insurance and workers' compensation; and helping businesses cope with escalating energy costs by eliminating the public utility tax on energy used in the manufacturing process.
"Governor Blagojevich and others in his administration need to heed the wake up call contained in the Moody's report," said Baise. "His ongoing demonizing of employers in Illinois serves only to delay job creation and denies Illinois workers the chance at obtaining a good job. We hope the report will help the Governor get the message that job creation by our private sector is the single best course of action for Illinois."
More IMA News
