The State of Illinois Economic Profile April, 2017 This study was prepared under contract with the University of Illinois, with financial support from the Office of Economic Adjustment, Department of Defense. The content reflects the views of the University of Illinois and does not necessarily reflect the views of the Office of Economic Adjustment. State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile State Economic Profile The Office of Economic Adjustment (OEA), an arm of the U.S. Department of Defense, initiated the Defense Industry Adjustment (DIA) Program to assist communities in planning for adjustments and resiliency in the face of defense industry changes. As of the beginning of 2016, a project team made up of the University of Illinois Office of Vice President for Research (OVPR), the University of Illinois at Chicago (UIC) Voorhees Center, and the Quad Cities Chamber of Commerce, has begun work on the State of Illinois Defense Industry Adjustment Project to assess the impact of changes in defense industry spending in Illinois, and to assist impacted sectors in their efforts to develop plans and options to mitigate detrimental impacts. The State of Illinois was ranked number 48 of the 50 states for defense spending as a percentage of total state GDP in 2014 with only 0.8% of the state GDP attributable to it. Based on a recently released report, spending increased from $5.6 billion in 2014 to $7.0 billion in 2015, moving the state in ranking from 48th to 43rd of the 50 states between 2014 and 2015. In terms of absolute defense spending, the state’s position jumped from 23rd to 19th, i.e., from $5.6 Billion to $7 billion between 2014 and 2015. Measured both as a proportion of state GDP and total spending, there is 1 a significant increase in Illinois in 2015 ($7 billion) compared to 2014 ($5.6 billion). Illinois’ increased share is notable given that during the same period, total national defense spending declined from $418 to $408 billion. In Fiscal Year 2015, while $4.8 billion of total defense spending was in the form of defense contracts, $2.2 billion consisted of spending on defense personnel. Defense contracts were largely for manufacturing of Supplies & Equipment (a category with 64% of annual defense contracts). The top direct defense spending locations in the state include: Lake, Cook, St. Clair, DuPage, Rock Island, Winnebago, Peoria, and Madison counties. These eight counties currently account for nearly $6 billion of annual defense spending in the state. As part of the project team, the UIC Voorhees Center for Neighborhood and Community Improvement analyzes data, conducts studies, and engages with stakeholders to inform and assist impacted sectors in their efforts to develop plans and strategies. The first series of these efforts involved compiling community and economic profiles, which were shared with community stakeholders in five regions of the state (Quad Cities, Rockford, Chicago Metro, Metro East, and Peoria) in order to inform the direction of the state DIA Project (these regional economic profiles can be accessed at http://www.illinoisdia.org/). Second, a summary analysis was conducted to establish a relative understanding of the economies of the five sub-state regions in terms of their current composition, changes in employment, and occupations. More recently, these initial efforts were followed by a detailed 1Defense Spending by State reports (for FY 2014 and FY 2015) are available at http://oea.gov/defense- spending-state-fiscal-year-2015?utm_medium=email&utm_source=govdelivery. Note that Fiscal Year 2014 defense spending figures from this same source were used for the Regional Economic Profiles that have been completed for the five Illinois DIA regions. economic composition and change analysis with the purpose of providing a deeper understanding of the regions’ economies in terms of their current industrial composition and to identify drivers of changes in employment. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 2 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Similar to the regional profiles, the primary purpose of this state economic profile is to provide baseline economic and industry information for state-wide and regional defense adjustment and industrial diversification strategies. For example, identification of regionally concentrated industries and those that perform substantial amounts of DoD contracts would aid efforts in identifying industrial clusters and potentially making connections across manufacturers in related industries. Different from regional level analyses, this profile focuses on additional measures of economic growth and competitiveness such as establishment births and deaths, gross state 2 Each economic and industry-level indicator is analyzed in comparison with the national average to provide a better understanding of local conditions and trends. A comparative understanding of a state’s economy in terms of compositional change and performance informs policy makers and analysts to better position the state in the national economy. To the extent that data is available, product, state per capita income, wages by occupation groups, and international trade statistics. the profile analyzes changes over a period of 10 years—long enough to reveal important dynamics, but short enough to focus on the kinds of local changes that may be malleable through state-level policy and planning activities. Drawing on local and national data sources, this profile considers both the fundamental economic conditions and sectoral drivers of the state economy. The economic indicators/industrial data items analyzed are divided into five main groups: Basic economic indicators: Indicators that measure economic conditions and help evaluate economic performance: (1) Employment and its sectoral distribution, (2) Unemployment rate, (3) Unemployment insurance claims, (4) Annual wages, and (5) Occupations. Descriptive analysis of these indicators help determine how the state economy is faring relative to its position in the past, or its current position as measured against the national economy. Defense related industrial activities: The profile identifies specific manufacturing and professional/technical services industries in which businesses may be performing defense contract work or are part of the defense industry supply chain. By analyzing employment trends in these industries in comparison with the nation, the profile explores the “defense activity-industrial performance” nexus. Finally, the state’s share of national defense contracts is analyzed, and local industries that perform substantial work originating from the Department of Defense are identified. Industrial Specialization: This analysis identifies industry sectors in which the state economy is specialized relative to the national economy. For this purpose, we calculate employment-based location quotients (LQs). In addition to indicating how specialized a local economy is relative to the larger economy, location quotients are essential in determining the economic base of a local economy. In the analysis of LQs, particular attention is given to specific manufacturing and professional/technical services industries in which businesses may be performing defense contract 2 These extra measures were not included in regional economic profiles because either data was not available at sub-state level (e.g., international trade) or that most regions are too small for their fluctuations to be meaningful. work or are part of the defense industry supply chain. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 3 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Drivers of State Employment Change: We analyze all industry sectors at the 2- and 3-digit NAICS level for employment change from 2005 to 2015. A shift-share analysis is conducted to better understand how the local area economy is changing, and in which industries it is most competitive. By disaggregating the portions of change that result from local factors versus broader changes in the national economy or in the particular industry, the shift-share analysis sheds light on the sources of growth and decline in the state economy. Export Performance of State Industries: Foreign trade statistics provide an trade situation – and market development and penetration studies. They also constitute a measure of the impact of competition faced by state exporting firms/industries. Analysis of foreign trade data might also inform the state transportation and logistics industry in the critical area of appraisal of the general anticipating the need for – future facilities and equipment. Notes on definitions and data sources may be found at the end of this document. If there are any questions, please contact Yittayih Zelalem, Co-director of the Nathalie P. Voorhees Center for Neighborhood & Community Improvement at the University of Illinois at Chicago at 312-996-6674 or e-mail at: yittazel@uic.edu. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 4 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile State Economic Highlights  The state population grew approximately 2.0% from 2005 to 2015, a much slower rate than the nation as a whole, which grew nearly 9% during the same period. Relatively slow population growth rate in the state is reflected in employment and economic output trends.  The state economy is not performing as well as the national economy. Current state employment is still below the pre-recession level. Although the state economy continues to expand after the recession ended in 2010, unlike the trend in the country, current state employment has not reached the pre-recession level yet. Shift-share analysis shows that if the state economy’s growth rate were identical to that of the national economy, then the number of jobs in the state should have grown by 346,028 between 2005 and 2015; instead, the state gained only 100,096 jobs during the same period.  Health care, retail trade, and manufacturing accounted for the largest shares of any sector in 2015, representing 13.3 percent, 10.5 percent, and 10.0 percent of employment in the state, respectively. The sectors that created the most jobs from 2005 to 2015 were health care, accommodation and food services, and professional and technical services. These sectors respectively added 119,040; 60,858; and 56,870 jobs to the state economy. Manufacturing and construction experienced the largest job losses during the same period. From 2005 to 2015, manufacturing lost more than 110,000 jobs while the construction sector lost nearly 55,000 jobs. The manufacturing sector is declining faster in Illinois than nationally.  In 2015, Illinois had a per capita personal income (PCPI) of $50,295. This PCPI ranked 15th in the United States and was 105 percent of the national average ($48,112). The 2015 PCPI reflected an increase of 10 percent from 2005 (nearly the same as the change at the national level). In 2005, the PCPI of Illinois was $45,689 and ranked 16th in the United States.  The state Gross Domestic Product (GDP) grew 6.8 percent from 2005 to 2015 in real terms, lagging the national growth metric of 13.3 percent. The largest sectoral contributor to real GDP growth in Illinois was finance, insurance, and real estate. This sector accounted for approximately 3 percentage points of the total growth in real GDP. The second largest contributor was professional and business services, which accounted for 2 percentage points of the total growth in real GDP.  The current (2015) unemployment rate in the state (5.9%) is slightly higher than the national unemployment rate (5.3%). After rising sharply during the recession years of 2009 and 2010, the unemployment rate has fallen in recent years.  The current average wage for all industries in the state is $55,889 (2015). This figure is above the national figure. (According to Bureau of Labor Statistics 2015 estimates, the average annual wage across all industries was $52,942 in the U.S.). There has not been a significant change in the gap between state and national wages during the last ten years.  The state is specialized in various manufacturing, financial, and business service industries. Among those, machinery manufacturing (NAICS 333), fabricated metal product manufacturing University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 5 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile (NAICS 332) and professional and technical services (NAICS 541) are closely related to defense. State employment in fabricated metal product manufacturing declined substantially during the recession and has not completely recovered yet. While national employment increased in the last five years, local employment remained the same. State employment in professional and technical services closely follows the national trend and surpassed the pre-recession levels.  More than $60 billion worth of goods were exported from Illinois in 2015. These exports supported 333,674 jobs (nearly 6% of total state employment) and helped sustain a total of 23,252 companies. Eighty-six percent (86%) of these jobs are attributable to manufactured goods exports. Major export categories are machinery, chemicals, transportation equipment, electronic products, and electrical equipment.  Illinois’s share of U.S. exports is shrinking in recent years (Table 10). This is explained in part by the state’s contracting manufacturing sector and the fact that Illinois’s share of the U.S. population has been declining during the same period.  In 2015, $5.3 billion worth of DoD contracts were performed in Illinois. Businesses operating in manufacturing, wholesale trade, construction, and professional and technical services received the most contract dollars obligated in FY 2015; the top industries include: Medical equipment merchant wholesalers ($472 million); Construction ($387 million); Search, detection, and navigation instruments ($384 million); Heavy duty truck manufacturing ($379); Engineering services ($229 million); Aircraft manufacturing ($223 million).  Department of Defense (DoD) contracts in the state of Illinois are concentrated in two regions: Northeast Illinois and Southwest Illinois. In 2015, nearly 80 percent of Illinois DoD contracts (or 4.3 out of 5.3 billion dollars’ worth of DoD contracts) were performed in these two regions. As a share of regional gross regional product (GRP), – DoD contracts are most important to the Southwest Illinois Region, where they constituted around 4 percent of GRP in 2015. In the same year, defense contracts accounted for less than 1 percent of GRP in the Northeast Illinois Region.  Defense contracts in the Rockford and Greater Peoria regions are concentrated in a few industries. While contracts in the Rockford region are concentrated in electrical apparatus- equipment wholesale (55%) and aircraft manufacturing (20%), in the Greater Peoria region, they are heavily concentrated in machinery manufacturing (73%). Heavy concentration in a few industries may make these regions more vulnerable to reductions in defense spending as a result of either cuts in defense programs related to these industries or the regions losing their competitive advantage in those industries over time. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 6 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Population Illinois currently has an estimated 12,859,995 residents, making it the fifth largest state in the U.S. The state population grew approximately 2.0% from 2005 to 2015, a much slower rate than the nation as a whole, which grew nearly 9% during the same period (Table 1 and Figure 1). As discussed in the following pages, the relatively slow population growth rate in the state is reflected in employment and gross domestic product trends. Table 1: Population, 2005-2015 Year 2005 2007 2009 2011 2013 2015 Change (2005-2015) Illinois 12,610,000 12,696000 12,797,000 12,862,000 12,890,000 12,860,000 2.0% United States 295,517,000 301,231,000 306,772,000 311,719,000 316,427,000 321,419,000 8.8% 2006 12,644,000 298,380,000 2008 12,747,000 304,094,000 2010 12,841,000 309,347,000 2012 12,875,000 314,103,000 2014 12,882,000 318,907,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 350,000,000 300,000,000 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 Figure 1: Population, 2005-2015 — 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Illinois U.S. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 7 Illinois U.S. State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Employment and Gross Domestic Product by Sectors Health care and social assistance is the largest industry by employment in Illinois. The health care sector employed more than 778,000 workers in 2015, approximately 13.3 percent of total employment in the state (Figure 2). After health care, retail trade and manufacturing are the two largest sectors. These three sectors together constituted more than one third of total state employment in 2015. These sectors are also dominant sectors at the national level. However, manufacturing accounts for a slightly larger share of employment in Illinois than in the U.S. (Table 2). The share of manufacturing in state employment is 10.0% while it is 8.8% of national employment. Similar to the pattern observed for the national economy, industries display different growth rates (Figure 3). Sectors that created the most jobs in the state from 2005 to 2015 were health care, accommodation and food services, and professional and technical services. These sectors respectively added 119,040; 60,858; and 56,870 jobs to the state economy. Manufacturing and construction experienced the largest job losses during the same period. From 2005 to 2015, manufacturing lost more than 110,000 jobs while the construction sector lost nearly 55,000 jobs in Illinois. Overall, state industries with relatively large employment shrank at a faster rate than the industries in the national economy or they did not grow as fast as the national industrial average. Educational services, 9.1% Manufacturing, 10.0% Retail trade, 10.5% Health care and social assistance, 13.3% Mining, 0.2% Agriculture, 0.3% Utilities, 0.4% Professional and technical services, 6.9% Wholesale trade, 5.2% Finance and insurance, 4.9% Transportation and warehousing, 4.8% Public administration, 4.4% Construction, 3.7% Other services, 3.5% Information, 1.9% Management of companies, 1.6% Arts, entertainment, and recreation, 1.4% Figure 2: Sectoral Distribution of Employment, 2015 Accommodation and food services, 8.4% Administrative and waste services, 7.3% Real estate, 1.3% University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 8 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Table 2: Top Industries by Employment, 2015 Industry Health care and social assistance Manufacturing Illinois Rank Employment Share 1 778,941 13.3% 3 582,196 10.0% 492,878 8.4% 403,699 6.9% 287,488 4.9% 260,142 4.4% 13 202,022 3.5% 15 94,566 1.6% 17 77,544 1.3% 19 17,830 0.3% 21 8,133 0.1% 5,811,911 99.4% 5,848,451 100.0% United States Rank Employment Share 1 20,282,539 14.5% 4 12,339,633 8.8% 3 13,030,233 9.3% Retail trade 2 615,216 10.5% 2 15,704,487 11.3% Educational services 4 534,856 9.1% 5 12,313,741 8.8% Accommodation and food services 5 Professional and technical services 7 Finance and insurance 9 Public administration 11 7 11 8 13 16 17 18 21 8,725,796 6.3% 5,770,137 4.1% 7,242,529 5.2% 4,348,055 3.1% 2,197,652 1.6% 2,136,255 1.5% 1,255,846 0.9% 240,460 0.2% 139,486,998 100.0% 139,491,699 100.0% Administrative and waste services 6 426,882 7.3% 6 8,874,589 6.4% Wholesale trade 8 301,313 5.2% 10 5,874,599 4.2% Transportation and warehousing 10 283,508 4.8% 12 5,542,106 4.0% Construction 12 215,002 3.7% 9 6,603,670 4.7% Other services, except public administration Management of companies and enterprises Real estate and rental and leasing Agriculture, forestry, fishing and hunting Unclassified Total with data suppression Total without data suppression Information 14 111,601 1.9% 14 2,897,488 2.1% Arts, entertainment, and recreation 16 84,672 1.4% 15 2,546,157 1.8% Utilities 18 24,134 0.4% 19 808,885 0.6% Mining, quarrying, and oil and gas extraction 20 9,288 0.2% 20 752,141 0.5% *Industries for which employment data is suppressed. Shares are calculated using total without data suppression. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 9 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Figure 3: Industry Employment Growth Rates, 2005-2015 University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber Illinois U.S. In terms of contribution to the gross domestic product (GDP), the largest industry in Illinois was finance, insurance, and real estate in 2015. This industry accounted for nearly 23 percent of Illinois GDP in 2015. The second largest industry was professional and business services, which accounted for 14 percent of Illinois GDP. The third largest industry was manufacturing, which accounted for 13 percent of Illinois GDP. This pattern is slightly different from the national economy in that the shares of these three industries in the U.S. GDP are smaller than in the state. This suggests that trends in these sectors largely determine the health and growth of the state economy. The real state GDP grew 6.8 percent from 2005 to 2015, lagging the national growth rate of 13.3 percent. The largest contributor to real GDP growth in Illinois was finance, insurance, real estate. This industry accounted for approximately 3 percentage points of the total growth in real GDP. The second largest contributor was professional and business services, which accounted for 2 percentage points of the total growth in real GDP. In 2015, Illinois had a per capita personal income (PCPI) of $50,295. This PCPI ranked 15th in the United States and was 105 percent of the national average ($48,112). The 2015 PCPI reflected an increase of 10 percent from 2005 (nearly the same as the change at the national level). In 2005, the PCPI of Illinois was $45,689 and ranked 16th in the United States. 10 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Table 3: Top Industries by Gross Domestic Product, 2015 (2009 million dollars) Industry Finance, insurance, and real estate Manufacturing Educational services and health care Retail trade Illinois Rank Employment 1 156,638 3 88,284 5 57,605 7 36,584 9 25,090 Share Rank 22.7 1 12.8 4 8.4 5 5.3 7 3.6 8 3.5 9 United States Employment Share 3,189,329 19.82 1,912,044 11.9 1,354,416 8.4 969,407 6.0 854,581 5.3 623,855 3.9 Professional and business services 2 97,517 14.1 3 2,039,290 12.7 Government and other services 4 82,183 11.9 2 2,289,596 14.2 Wholesale trade 6 53,394 7.7 6 983,610 6.1 Arts and entertainment 8 25,637 3.7 10 623,427 3.9 Information Construction Agriculture Total 690,187 Transportation and warehousing 10 24,047 3.5 11 445,820 2.8 11 23,978 13 4,700 0.7 14 146,405 0.9 100.0 16,088,249 100.0 Utilities 12 11,840 1.7 13 264,359 1.6 Mining and oil extraction 14 2,690 0.4 12 392,110 2.4 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 Figure 4: Gross Domestic Product, 2005-2015 — 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Illinois U.S. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 11 Illinois, in million dollars (2009) U.S., in million dollars (2009) State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile 60,000 50,000 40,000 30,000 20,000 10,000 – Figure 5: Per capita Personal Income, 2005-2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Illinois U.S. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 12 2015 Constant dollars Year 2005 2007 2009 2011 2013 2015 Change (2005-2015) Illinois 5,748,355 5,869,157 5,551,930 5,566,648 5,687,541 5,848,451 1.7% United States 131,571,623 135,366,106 128,607,842 129,411,095 133,968,434 139,491,699 6.0% State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Trends in Employment, Unemployment, and Initial Unemployment Insurance Claims For both the state and the country, 2010 marks the lowest level of employment in the last ten years. Unlike nationwide, state employment has not yet reached its pre-recession level, though the state economy continues to expand. (Table 4). Differences in employment growth can also be seen in Figure 6 where employment levels for Illinois and the U.S. are shown as shares of 2005 employment. Table 4: Employment, 2005-2015 2006 5,821,022 133,833,834 2008 5,841,692 134,805,659 2010 5,502,322 127,820,442 2012 5,636,918 131,696,378 2014 5,762,156 136,613,609 1.10 1.05 1.00 0.95 0.90 0.85 0.80 Figure 6: Indexed Employment, 2005-2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Illinois U.S. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 13 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Current unemployment rate in the state (5.9%) is slightly higher than the national unemployment rate (5.3%). After rising sharply during the recession years of 2009 and 2010, the unemployment rate has fallen in recent years. However, it is still higher than pre-recession levels (Table 5 and Figure 7). Table 5: Unemployment Rate (%), 2005-2015 2005 2006 Illinois 5.7 4.5 U.S. 5.1 4.6 2007 2008 2009 5.0 6.3 10.2 4.6 5.8 9.3 2010 2011 10.4 9.7 9.6 8.9 2012 2013 2014 2015 9.0 9.1 7.1 5.9 8.1 7.4 6.2 5.3 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Figure 7: Annual Unemployment Rate, 2005-2015 2005 2006 2007 2008 2009 2010 Illinois 2011 2012 2013 U.S. 2014 2015 After peaking during the recession (2009), recent unemployment insurance claims in the state have 3 returned to below their pre-recession levels. Overall, the trend for the state is very similar to trends observed for the U.S. Similar to the national trends, the state experienced a higher number of claims during the recession years of 2008, 2009, and 2010, but the most recent claims are below pre-recession levels. In Figure 8, initial unemployment claims for Illinois and the U.S. are shown as a share of 2006 initial unemployment claims. Current initial claims in the state have returned to their pre-recession levels in 2014 and below the pre-recession level in 2015. 3 are a leading indicator of economic conditions and are used in the New claims anticipate subsequent movement in the economy, Initial unemployment insurance claims analysis of current unemployment trends. primarily measuring University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber emerging unemployment. 14 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile 25,000 20,000 15,000 10,000 5,000 600,000 500,000 400,000 300,000 200,000 100,000 Figure 8: Average Weekly Unemployment Insurance Claims, 2005- 2015 — 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Illinois U.S. 2.00 1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 Figure 9: Indexed Unemployment Insurance Claims, 2005-2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Illinois U.S. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 15 Illinois United States State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Trends in Private Sector Employment and Establishments Although the overall level of volatility in the labor market in Illinois appears to be largely the same as in the U.S., private sector establishments created more new net jobs at the national level than in the state in the last decade (relative to baseline). While the births of new establishments were offset by the deaths of existing establishments in the state, private sector establishments continue 4 to increase in net numbers in the country (Figures 10, 11, 12, 13). 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 – Figure 10: Private sector job gains and losses, Illinois, 2005-2015 2005 2006 2007 2008 2009 2010 Gains 2011 2012 Losses 2013 2014 2015 2016 4 Quarterly statistics in private sector establishment and employment helps assess the business cycle, the level of labor market volatility, and the effect of establishment employment changes on aggregate employment. These data are also useful in highlighting the forces behind the net changes in employment. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 16 March September March September March September March September March September March September March September March September March September March September March September March State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Figure 11: Private sector job gains and losses, U.S., 2005-2015 2005 2006 2007 2008 2009 Gains 2010 2011 2012 Losses 2013 2014 2015 2016 12,000 10,000 8,000 6,000 4,000 2,000 0 Figure 12: Private sector establishment births and deaths, Illinois, 2005-2015 2005 2006 2007 2008 2009 2010 Births 2011 2012 Deaths 2013 2014 2015 2016 University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 17 March September March September March September March September March September March September March September March September March September March September March September March March September March September March September March September March September March September March September March September March September March September March September March State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile 300,000 250,000 200,000 150,000 100,000 50,000 – Figure 13: Private sector establishment births and deaths, U.S., 2005-2015 2005 2006 2007 2008 2009 Births 2010 2011 2012 Deaths 2013 2014 2015 2016 University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 18 March September March September March September March September March September March September March September March September March September March September March September March State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Annual Wages The current average wage for all industries in the state is $55,889 (2015). This figure is above the national figure (according to BLS 2015 estimates, average annual wage for all industries was 5 $52,942 in the U.S.). Figure 15 examines average annual wages for just the manufacturing sector. Different trends are observed in terms of changes in wages for the economy as a whole and the manufacturing sector. While the average annual wages for all industries have been stable both at the state and national levels, the annual wages for the manufacturing sector have risen notably. Another observation is that while the state wage average for the manufacturing sector has been closer to the national average (relative to the wages for the economy as a whole), wages in the manufacturing sector in Illinois are increasing slightly higher than the U.S. Figure 14 depicts average annual wages for the economy as a whole while 60,000 50,000 40,000 30,000 20,000 10,000 – Figure 14: Annual Average Wages, 2005-2015 2005 2006 2007 2008 2009 2010 Illinois 2011 2012 2013 2014 2015 U.S. 5 Annual wages are a key to understanding what the standard of living is in the local economy. Earnings from employment in the form of wages remain the primary source of income for individuals to support themselves and their families. Industry-level annual wages are also considered as an indicator of a state’s competitiveness. All monetary figures are in 2015 dollars. Previous year wages are adjusted for inflation using Consumer Price Index (CPI) deflators published by the U.S. Bureau of Labor Statistics (BLS). University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 19 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 – Figure 15: Annual Average Wages in Manufacturing Sector, 2005- 2015 2005 2006 2007 2008 2009 2010 Illinois 2011 2012 U.S. 2013 2014 2015 The following three graphs examine average wages for three sectors that drive the state economy: health care; accommodation and food services; and professional and technical services. While average wages in the first two sectors are very close to national averages, the state wage average for professional and technical services is higher than the national average. It is worth noting, however, that the difference between state and national wage averages for professional services appears to be getting smaller over time. 60,000 50,000 40,000 30,000 20,000 10,000 – Figure 16: Annual Average Wages in Health Care Sector, 2005-2015 2005 2006 2007 2008 2009 2010 Illinois 2011 2012 U.S. 2013 2014 2015 University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 20 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile 25,000 20,000 15,000 10,000 5,000 – Figure 17: Annual Average Wages in Accommodation and Food Service Sector, 2005-2015 2005 2006 2007 2008 2009 2010 Illinois 2011 2012 2013 2014 2015 U.S. 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 – Figure 18: Annual Average Wages in Professional and Technical Services Sector, 2005-2015 2005 2006 2007 2008 2009 Illinois 2010 2011 2012 2013 2014 2015 U.S. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 21 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Local Industrial Concentration  Ten out of thirty-two locally concentrated industry sectors are manufacturing sectors (a reflection of the fact that manufacturing accounts for 10% of local employment) (Table 6). The following three industries and businesses operating in these industries are either performing defense related contract work or are part of the defense industry supply chain: machinery manufacturing (NAICS 333); fabricated metal products manufacturing (NAICS 332); professional and technical services (NAICS 541). Among these locally concentrated industries, the professional and technical services industry is a major source of employment in the state, accounting for approximately 7% of total statewide employment in 2015.  Many of the industries (except those indicated with symbol † below) are locally concentrated based on both employment and establishment counts. For these industries, local employment per establishment is close the equivalent national ratio. For instance, the employment-to- establishment ratio for fabricated metal products manufacturing (NAICS 332) is 27 in the state while it is 25 at the national level. The average size of establishments may have implications for the strength of the state’s relationship with defense industry and prospects of growth. Industries that are heavily concentrated within large firms may wield greater political or supply chain power. Yet this may also mean the local strength and health of the industry is dependent on the fortunes of just a few firms, often businesses that are not owned or led locally. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 22 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Table 6: Concentrated Industry Sectors: Employment-Based LQs6 NAICS Code 333 323 326 813 519 523 425 322 482 488 484 331 561 522 446 541 Industry State U.S. LQ 481 Air transportation 34,771 457,788 1.81 Machinery manufacturing Printing and related support activities Plastics and rubber products manufacturing Membership associations and organizations Other information services Securities, commodity contracts, investments Electronic markets and agents and brokers Paper manufacturing Rail transportation Support activities for transportation Truck transportation Primary metal manufacturing Administrative and support services Credit intermediation and related activities† Health and personal care stores† 75,997 1,115,478 1.62 27,007 451,227 1.43 40,779 686,517 1.42 79,713 1,365,167 1.39 21,538 378,206 1.36 51,018 903,933 1.35 47,633 911,685 1.25 19,304 371,234 1.24 38 745 1.22 36,031 724,182 1.19 71,655 1,444,317 1.18 19,361 392,441 1.18 411,742 8,445,060 1.16 121,562 2,573,457 1.13 47,943 1,031,294 1.11 403,699 8,725,796 1.10 5,811,911 139,486,998 N.A. 5,848,451 139,491,699 N.A. 332 Fabricated metal product manufacturing 94,833 1,456,264 1.55 335 Electrical equipment and appliance mfg. 22,817 381,635 1.43 493 Warehousing and storage† 49,129 831,905 1.41 325 Chemical manufacturing 46,345 806,111 1.37 485 Transit and ground passenger transportation 41,060 724,453 1.35 424 Merchant wholesalers, nondurable goods 108,290 2,030,897 1.27 311 Food manufacturing 78,809 1,509,267 1.25 324 Petroleum and coal products manufacturing 5,628 109,715 1.22 524 Insurance carriers and related activities 113,032 2,266,509 1.19 713 Amusements, gambling, and recreation 91,445 1,838,671 1.19 423 Merchant wholesalers, durable goods 145,390 2,932,016 1.18 339 Miscellaneous manufacturing 28,832 587,713 1.17 921 Executive, legislative and general government 145,549 2,998,048 1.16 491 Postal service† 28,310 602,924 1.12 443 Electronics and appliance stores† 23,925 515,063 1.11 Professional and technical services Total Employment with Data Suppression Total Employment without Data Suppression 6 Note that locally concentrated industries are identified in this analysis by LQs exceeding 1.10. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 23 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Given their size in the state economy and potential supply-chain linkages to the defense industry, the following figures examine state employment levels in these industries in comparison with national trends. State employment in machinery manufacturing declined substantially during the recession years and has not fully recovered (Figure 19). Similarly, state employment in fabricated metal product manufacturing declined considerably during the recession and has not completely recovered. While national employment increased in the last five years, state employment remained the same (Figure 20). State employment in professional and technical services closely follows the national trend and surpassed the pre-recession levels (Figure 21). Figure 19: Employment in Machinery Manufacturing, 2005-2015 100,000 1,400,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 — 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Illinois U.S. 140,000 120,000 100,000 80,000 60,000 40,000 20,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 Figure 20: Employment in Fabricated Metal Product Manufacturing, 2005-2015 — 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Illinois U.S. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 24 Illinois Employment Illinois Employment U.S. Employment U.S. Employment State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 Figure 21: Employment in Professional and Technical Services, 2005-2015 — 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Illinois U.S. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 25 Illinois Employment U.S. Employment State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Components of State Employment Growth    The state economy is not performing as well as the national economy. The national growth component (national shift in the box below) shows that, if the state’s economic growth rate were identical to that of the national economy, then the number of jobs in the state should have grown by 346,028 between 2005 and 2015. However, the state gained 100,096 jobs from 2005 to 2015. The industry mix component of 1,663 means that the state has 1,663 more jobs than it would have if its structure were identical to the nation. This figure is minimal compared to the other components, implying that the state industrial composition does not generate differences in growth from the nation. According to the local share component, a shift of -247,594 jobs in the state is attributable to its relative competitive position. That is, a loss of nearly two hundred forty-seven thousand jobs is attributable to characteristics specific to the local economy. National Shift (RS) = 346,028 Industry Mix (IM) = 1,663 Local (Competitive) Shift (LS) = -247,594  Figure 22 below graphically summarizes the results for individual industries. In this graph, the location quotient (the employment concentration relative to the nation) appears on the vertical axis and the local component of the change in employment from 2005 to 2015 appears on the horizontal axis. The size of the circles represents current employment levels. Industries that appear in the upper right quadrant (high LQ-high competitive shift) represent solid strengths. For example, educational services and information are both locally concentrated and local factors, specific to the state of Illinois, contributed to the growth of the industry.  Industries that appear in the upper left quadrant (high LQ-low competitive shift) represent current industrial strengths that are struggling. Manufacturing and construction are located in this quadrant. Negative competitive shifts mean that these industries are not a negative competitive shift for this industry indicates that it is declining faster locally than nationally.  Industries that appear in the lower right quadrant (low LQ-high competitive shift) represent potential emerging local industrial strengths. Although they are growing faster than national industry trends suggest, these industries are relatively small and are not expected to continue growing in the future. growing locally faster than the national industrial average. Positive competitive shifts suggest that growing at the same rate as the national industrial average. In fact, because employment in manufacturing is declining at the national level, University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 26 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile  The lower left quadrant (low LQ-low competitive shift) is the least interesting of the four quadrants. Industries that appear in this quadrant are not locally concentrated and the local economy does not exhibit a competitive advantage to support employment growth in these sectors.  In order to see the quadrant locations for industries at a fine-grained level, Figure 23 replicates the information from Figure 22 with 3-digit NAICS industries but excluding outliers (industries with LQ > 2 or competitive shift > 50%) and without displaying industry size. According to Figure 20, the greatest number of industries are located in the upper and lower left quadrants. However, a considerable number of industries are located in the upper right quadrant of the graph. Industries such as electronic markets and agents and brokers (NAICS 425), air transportation (NAICS 481), and support activities for transportation (NAICS 488) represent solid strengths while apparel manufacturing (NAICS 315) and transportation equipment manufacturing (NAICS 336) show emerging local industrial strengths. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 27 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Figure 22: Regional Concentration and Regional Effects Construction struction Manufacturing -30% -20% -10% 1.60 LQ Con 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 CS -50% -40% 0% 10% 20% Utilities University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 28 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Figure 23: Regional Concentration and Regional Effects -50% -40% -30% 454 312 512 -20% 926-10% 442 511 444574282 611623 551 446 812 712811 1 532 CS 40% 50% 923 922 721 483 315 924 928 316 449425 441 453 624 238 711 531 327 452 518 999 486 0.5 113 525 0 211 -0.5 -1 331 921 339 561 517 522 491 443 2 LQ Co 333 332 1.5 485 335 323 813 nstruction 481 523 493 326 325 424 423 541 713 322 484 488 311 324 10% 20% 30% 524 451 562 621 482 515 447 533 622 212 233634492 337 221 0% 487 111 321 237314 336 115 114 213 521 313 112 425 University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 29 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Occupations There are four major growth occupation groups: Business and financial operations occupations; Architecture and engineering occupations; Sales occupations; and Construction and extraction occupations (Table 7). Occupation groups with increased occupational employment LQ values over time indicate that industries that demand these occupations are probably growing and might demand equivalent or similar occupations in the future (Table 8). Understanding the current and changing occupation mix of a state informs policy makers and analysts about occupational requirements of local industries. Specifically, they could inform educational and workforce training policies and programs for growing and/or specialized industries. For example, employment growth in professional and technical services (NAICS 541) discussed above is probably related to growth in architecture and engineering occupations. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 30 Table 7: Changes in Major Occupation Groups in Illinois, 2010-2015 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Illinois 2015 Change 388,500 29.5% 169,580 33.3% 32,760 -3.5% 46,920 7.0% 68,810 -1.7% 159,210 3.1% 482,170 9.2% 168,830 31.6% 919,450 4.4% 178,580 -13.3% 437,840 5.8% 473,270 9.2% U.S. Occ. Code 13-0000 17-0000 21-0000 25-0000 29-0000 33-0000 37-0000 41-0000 45-0000 49-0000 53-0000 00-0000 Occupation Title Business and Financial Operations Occupations Architecture and Engineering Occupations Community and Social Service Occupations Education, Training, and Library Occupations Healthcare Practitioners and Technical Occupations Protective Service Occupations Building and Grounds Cleaning and Main. Occ. Sales and Related Occupations Farming, Fishing, and Forestry Occupations Installation, Maintenance, and Repair Occupations Transportation and Material Moving Occupations All Occupations 2010 299,890 127,260 33,940 43,850 69,980 154,460 441,480 128,310 880,460 205,920 413,970 433,260 2010 6,022,860 3,283,950 1,064,510 992,650 1,716,640 3,962,930 11,027,340 3,425,220 21,503,800 5,072,530 8,236,340 8,547,980 2015 6,936,990 4,005,250 1,146,110 1,062,370 1,843,600 3,989,910 12,577,080 4,307,500 21,846,420 5,477,820 9,073,290 9,536,610 Change 15.2% 22.0% 7.7% 7.0% 7.4% 0.7% 14.1% 25.8% 1.6% 8.0% 10.2% 11.6% 11-0000 Management Occupations 5,528,420 5,852,710 5.9% 127,097,160 137,896,660 8.5% 15-0000 Computer and Mathematical Occupations 313,360 316,070 0.9% 6,090,910 7,032,560 15.5% 19-0000 Life, Physical, and Social Science Occupations 83,630 87,700 4.9% 2,305,530 2,475,390 7.4% 23-0000 Legal Occupations 74,910 74,620 -0.4% 1,901,180 1,972,140 3.7% 27-0000 Arts, Design, Entertain., Sports, and Media Occ. 405,940 385,700 -5.0% 8,457,870 8,542,670 1.0% 31-0000 Healthcare Support Occupations 320,770 332,380 3.6% 7,346,580 8,021,800 9.2% 35-0000 Food Preparation and Serving Related Occupations 140,030 150,250 7.3% 3,187,810 3,351,620 5.1% 39-0000 Personal Care and Service Occupations 184,030 178,810 -2.8% 4,175,550 4,407,050 5.5% 43-0000 Office and Administrative Support Occupations 583,370 593,750 1.8% 13,437,980 14,462,120 7.6% 47-0000 Construction and Extraction Occupations 5,170 7,580 46.6% 408,040 454,230 11.3% 51-0000 Production Occupations 184,440 199,930 8.4% 4,928,960 5,374,150 9.0% University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 31 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Table 8: Occupational Employment Location Quotients, Illinois, 2015* Occ. Code Occupation Title 2010 2015 1.15 1.32 0.89 1.00 0.73 0.67 1.02 1.04 0.94 0.88 0.90 0.94 0.92 0.90 0.86 0.92 0.94 0.99 0.93 0.77 1.16 1.14 1.17 1.17 11-0000 Management Occupations 1.00 1.00 13-0000 Business and Financial Operations Occupations 17-0000 Architecture and Engineering Occupations 21-0000 Community and Social Service Occupations 25-0000 Education, Training, and Library Occupations 29-0000 Healthcare Practitioners and Technical Occupations 33-0000 Protective Service Occupations 37-0000 Building and Grounds Cleaning and Maintenance Occ. 41-0000 Sales and Related Occupations 45-0000 Farming, Fishing, and Forestry Occupations 49-0000 Installation, Maintenance, and Repair Occupations 53-0000 Transportation and Material Moving Occupations 00-0000 All Occupations *Reference region in LQ calculations is U.S. 15-0000 Computer and Mathematical Occupations 1.18 1.06 19-0000 Life, Physical, and Social Science Occupations 0.83 0.83 23-0000 Legal Occupations 0.91 0.89 27-0000 Arts, Design, Entertainment, Sports, and Media Occ. 1.10 1.06 31-0000 Healthcare Support Occupations 1.00 0.98 35-0000 Food Preparation and Serving Related Occupations 1.01 1.06 39-0000 Personal Care and Service Occupations 1.01 0.96 43-0000 Office and Administrative Support Occupations 1.00 0.97 47-0000 Construction and Extraction Occupations 0.29 0.39 51-0000 Production Occupations 0.86 0.88 Looking at median annual wages for the state and the country, there do not seem to be large differences for different occupation groups. Regarding change over time, median wages declined at a greater rate in the state than in the U.S. (-2.1% versus -1.6%). While wages for workers with three occupations grew locally faster than the national average (computer occupations; protective service occupations; and construction occupations), for three other occupation groups, wages declined substantially compared to the national trend for that occupation (life and physical science occupations; legal occupations, and farming occupations). University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 32 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Table 9: Annual Median Wages for Major Occupational Groups (in 2015 constant dollars), 2010-2015 Occ. Code 13-0000 17-0000 21-0000 25-0000 29-0000 33-0000 37-0000 41-0000 45-0000 49-0000 53-0000 00-0000 Occupation Title Business and Financial Operations Occupations Architecture and Engineering Occupations Community and Social Service Occupations Education, Training, and Library Occupations Healthcare Practitioners and Technical Occupations Protective Service Occupations Building and Grounds Cleaning and Main. Occ. Sales and Related Occupations Farming, Fishing, and Forestry Occupations Installation, Maintenance, and Repair Occupations Transportation and Material Moving Occupations All Occupations Illinois 2010 2015 Change 2010 64,989 64,800 -0.3% 65,946 74,239 74,700 0.6% 76,750 43,272 42,100 -2.7% 42,696 53,098 48,950 -7.8% 49,663 63,870 61,680 -3.4% 63,576 41,565 42,060 1.2% 39,848 25,185 25,580 1.6% 24,446 26,641 26,120 -2.0% 26,489 29,761 27,270 -8.4% 21,337 46,543 46,130 -0.9% 43,609 30,870 30,360 -1.7% 30,870 38,130 37,320 -2.1% 36,783 U.S. 2015 Change 65,710 -0.4% 76,870 0.2% 42,010 -1.6% 47,220 -4.9% 62,610 -1.5% 37,730 -5.3% 23,860 -2.4% 25,660 -3.1% 21,760 2.0% 42,790 -1.9% 30,090 -2.5% 36,200 -1.6% 11-0000 Management Occupations 94,837 93,910 -1.0% 99,391 98,560 -0.8% 15-0000 Computer and Mathematical Occupations 78,250 80,170 2.5% 80,130 81,430 1.6% 19-0000 Life, Physical, and Social Science Occupations 71,163 64,850 -8.9% 63,620 62,160 -2.3% 23-0000 Legal Occupations 95,152 76,620 -19.5% 81,065 78,170 -3.6% 27-0000 Arts, Design, Entertain., Sports, and Media Occ. 45,500 45,780 0.6% 46,598 46,160 -0.9% 31-0000 Healthcare Support Occupations 26,413 26,670 1.0% 26,913 27,040 0.5% 35-0000 Food Preparation and Serving Related Occupations 20,543 19,430 -5.4% 20,402 19,580 -4.0% 39-0000 Personal Care and Service Occupations 22,446 22,410 -0.2% 22,435 21,850 -2.6% 43-0000 Office and Administrative Support Occupations 34,120 33,680 -1.3% 33,380 33,200 -0.5% 47-0000 Construction and Extraction Occupations 59,326 61,160 3.1% 42,478 42,280 -0.5% 51-0000 Production Occupations 33,391 32,500 -2.7% 32,967 32,250 -2.2% University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 33 State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile International Trade Exports sustain thousands of businesses and support hundreds of thousands of jobs in Illinois. According to the International Trade Administration of the U.S. Department of Commerce, in 2015, a total of 23,252 companies exported from Illinois locations, and exports from those companies supported 333,674 jobs (nearly 6% of total employment). Eighty-six percent (86%) of these jobs are attributable to manufactured goods exports. Major export categories are machinery, chemicals, transportation equipment, electronic products, and electrical equipment. Illinois’s top five (5) export markets were Canada ($17.5 billion), Mexico ($9.1 billion), China ($4.9 billion), Germany ($3.1 billion), and Australia ($2.6 billion) in 2015. Similar to the trend observed for the nation as a whole, after rising sharply following the end of the recession in 2010, exports have declined in recent years (Figure 24). Illinois’s share of U.S. exports is shrinking in recent years (Table 10). This is explained in part by the state’s contracting manufacturing sector, and the decline in the state’s share of share of the U.S. population. 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 Figure 24: Exports Originated from Illinois, 2007-2016 (2016 constant million dollars) — 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Illinois U.S. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 34 Illinois United States State of Illinois Defense Industry Adjustment (DIA) Program, State Economic Profile Table 10: Top Products Exported from Illinois and Illinois’s Shares of U.S. Exports, 2013-2016 (2016 constant dollars) NAICS Code 120190 870324 901890 851712 230330 870410 853710 840999 870323 848180 210690 850440 Product Description Soybeans Passenger vehicles Industrial appliance for medical surgical dental and veterinary products Phones for cellular ntwks. / for other wireless eq. Brewing or distilling dregs and waste Dumpers designed for off-highway use Controls, elect apparatus f elect cont. Spark-ignition reciprocating int. com Passenger vehicle spk-ig int. com rcpr. p eng. >1500 Taps cocks etc. f pipe vat inc. thermos. control Food preparations Static converters; adp. power supplies Sub-total (Top 25) Export ($ million) 2013 2014 2015 2016 2,214 1,818 1,545 2,375 1,368 1,611 1,595 1,090 870 914 1,021 1,065 318 656 847 886 1,119 811 709 643 2,585 1,810 1,084 602 575 586 510 560 620 657 561 531 1,008 933 877 498 370 475 464 417 321 317 350 387 459 425 433 375 22,176 23,630 21,563 20,171 Share 2013 2014 2015 2016 3.3 2.7 2.4 4.0 2.1 2.4 2.5 1.8 1.3 1.3 1.6 1.8 0.5 1.0 1.3 1.5 1.7 1.2 1.1 1.1 3.9 2.6 1.7 1.0 0.9 0.9 0.8 0.9 0.9 1.0 0.9 0.9 1.5 1.4 1.4 0.8 0.6 0.7 0.7 0.7 0.5 0.5 0.6 0.6 0.7 0.6 0.7 0.6 33.5 34.5 34.0 33.7 4.2 4.2 4.2 4.1 % Change, 2013-2016 7.3 (20.4) 22.5 179.0 (42.5) (76.7) (2.7) (14.3) (50.6) 12.7 20.7 (18.4) (9.0) (9.7) 271012 Lt oils, preps gt 70% petroleum 3,931 5,059 2,648 2,838 5.9 7.4 4.2 4.7 (27.8) 300490 Medicaments, measured doses, retail pk. 378 550 1,031 1,217 0.6 0.8 1.6 2.0 221.8 880000 Civilian aircraft, engines, and parts 904 948 1,010 1,067 1.4 1.4 1.6 1.8 18.1 851762 Machinery for recp./convr./trans/regn. of voice/image 527 736 801 998 0.8 1.1 1.3 1.7 89.3 870899 Parts and accessories of motor vehicles 892 940 832 745 1.3 1.4 1.3 1.2 (16.4) 300210 Antisera, blood fractions & immunological products 526 555 1,050 615 0.8 0.8 1.7 1.0 16.9 851770 Parts of phone sets 214 327 777 593 0.3 0.5 1.2 1.0 177.1 843149 Parts and attachments for derricks 688 755 610 546 1.0 1.1 1.0 0.9 (20.7) 100590 Corn (maize), other than seed corn 658 1,008 709 507 1.0 1.5 1.1 0.8 (22.9) 842951 Mechanical front-end shovel loaders 659 583 586 456 1.0 0.9 0.9 0.8 (30.8) 381121 Additive for lub. oil cont. petro/bituminous mi 420 441 442 409 0.6 0.6 0.7 0.7 (2.6) 382200 Composite diagnostic/lab reagents, exc. pharma 427 392 448 383 0.6 0.6 0.7 0.6 (10.3) 284410 Natural uranium & compounds, alloys & ceramic 126 324 623 369 0.2 0.5 1.0 0.6 193.2 Total 66,213 68,394 63,421 59,808 University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 35 State of Illinois Defense Industry Adjustment (DIA) Program, Northeast Illinois State Economic Composition and Change Department of Defense Contracts Trends in Defense Spending in the U.S. In FY 2015, the Department of Defense (DoD) spent $408 billion on payroll and contracts in the United States, which corresponds to approximately 2.3% of U.S. GDP. Of this amount, $134.8 billion were on personnel and $273.5 billion were on contracts. Defense contracts spending has declined in recent years (Figure 25). From FY 2012 to 2013, DoD contract spending in the United States declined from $320.4 billion to $302.6 billion; in FY 2014 it further decreased to $281.8 billion before falling to $273.5 billion in FY 2015. In FY 2015, contract spending occurred in four major items: $129.8 were in supplies and equipment (47%), $104 were in services (38%), $28.9 were in research and development (11%), and $10.9 were in construction (4%). 400 350 300 250 200 150 100 50 0 Figure 25: DoD Contract Spending in the U.S. (in current dollars) 336.8 335.9 331.4 320.4 302.6 311.7 281.8 273.5 2008 2009 2010 2011 2012 2013 2014 2015 Trends in Defense Spending in Illinois According to defense spending data measured based on the time of performance of contracts, $7.0 billion were spent in the state in 2015 (up from $5.6 billion in 2014). Of that amount, $129.8 were in supplies and equipment (64%); $104 were in services (24%); $28.9 were in research and development (6%); $10.9 were in construction (6%); $2.2 billion were on personnel and $4.2 billion on construction (Defense Spending by State Fiscal Year 2015). DoD purchases in Illinois is more concentrated on manufactured products than from other states. Compared to the distribution of spending at the national level, defense spending in Illinois is concentrated in supplies and equipment, an indication that manufacturing firms rely more on DoD contracts than non- manufacturing firms. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 36 State of Illinois Defense Industry Adjustment (DIA) Program, Northeast Illinois State Economic Composition and Change According to defense spending data estimated based on dollars obligated, $5.3 billion were pent in the state in 2015 (up from $3.2 billion in 2014). Based on this estimate, since 2006, the Department of Defense has spent at least $3 billion dollars in contracts annually in Illinois (Figure 7 23). Although these contracts constitute around 1 percent of the gross state product (which is substantially less than in many other states), they support a large industrial base and are crucial for local businesses in certain industries (Table 11). Overall, the number of DoD contracts performed in the state closely tracks the national trend. However, it is worth noting that the state’s share in national defense spending appears to be trending higher in recent years; such is the case between 2013 and 2015 when contracts performed in Illinois increased from $3.2 billion to $5.3 billion. 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 Figure 26: Department of Defense Contracts by Place of Performance, 2006-2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Illinois U.S. Of the $5.3 billion worth of DoD contracts performed in Illinois in 2015, the most contract dollars were received by businesses operating in manufacturing, wholesale trade, construction, and professional and technical services (Table 11). The top five industries include: Medical equipment merchant wholesalers (NAICS 423450); Construction (NAICS 237990); Search, detection, and navigation instruments (NAICS 334511); Heavy duty truck manufacturing (NAICS 336120); Engineering services (NAICS 541330); and Aircraft manufacturing (NAICS 336411). As discussed above, businesses in professional and technical services (NAICS 541), fabricated metal product manufacturing (NAICS 332), and machinery manufacturing (NAICS 333) appear to be carrying out a substantial portion of DoD contracts performed in the state. 7 Contracts spending data are not adjusted for inflation. Data are derived from USASpending.gov, which is a publicly available, searchable website operated by the U.S. Treasury Department’s Bureau of the Fiscal Service. Note that these figures for the regions could be a low-end or a high-end tally of contracting dollars because the data source includes only direct contracts and not subcontracts. University of Illinois, Nathalie P. Voorhees Center, Quad Cities Chamber 37 Illinois (current milions of dollars) U.S. (current millions of dollars) State of Illinois Defense Industry Adjustment (DIA) Program, Northeast Illinois State Economic Composition and Change Table 11: Illinois Industries with DoD Prime Contracts Valued $50 million or more, Fiscal Year 2015 NAICS Code 237990 336120 336411 423610 236220 541512 332992 517110 334111 424210 541519 423850 541511 Industry Other heavy construction Heavy duty truck manufacturing Aircraft manufacturing Elec. equip. and wiring merchant wholesalers Commercial building construction Computer systems design services Small arms ammunition manufacturing Wired telecommunications carriers Electronic computer manufacturing Druggists’ goods merchant wholesalers Other computer related services Service estab. equip. merchant wholesalers Custom computer programming services Sum of dollars Share obligated (%) 386,564,251 7.3 378,625,020 7.1 223,485,645 4.2 168,727,634 3.2 160,973,062 3.0 131,877,825 2.5 107,680,828 2.0 102,663,586 1.9 92,287,588 1.7 80,933,559 1.5 77,835,610 1.5 70,519,423 1.3 59,748,225 1.1 423450 Medical equipment merchant wholesalers 471,925,182 8.9 334511 Search, detection, and navigation instruments 383,627,578 7.2 541330 Engineering services 229,129,896 4.3 541712 Other physical and biological research 181,012,797 3.4 324110 Petroleum refineries 161,238,789 3.0 334419 Other electronic component manufacturing 153,326,575 2.9 332993 Ammunition, except sma

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I am a targeted Individual in the county of KANKAKEE Illinois since 2015- current. I became a victim via my employer which is the state of Illinois Department of Human Services.

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