The latest readings of the Flash Index show the Illinois economy quickly shifting from growth to contraction during the coronavirus pandemic.
The Flash Index has been above 100 for the past eight years, indicating economic growth in Illinois during that period. But University of Illinois economist Fred Giertz says that all changed as coronavirus stay-at-home orders forced businesses to close down.
“This was just like an on-and-off switch in the middle and end of March, where a huge portion of the economy was shut down almost immediately,” says Giertz. “So you get this really sharp decline.”
From 105.7 in February, the Flash Index fell into negative territory in March, with a reading of 99.8, and then to 94.2 in April. The drop marks the sharpest decline recorded by the Flash Index since its first readings in 1981. (View an archive of Flash Index readings here.)
Giertz says he doesn’t expect the Illinois economy to decline so steeply in May, “but it’s going to probably decline more gradually in the future.”
Giertz compiles the Flash Index for the University of Illinois Institute of Government and Public Affairs. The Index is based on a weighted average of growth rates in Illinois tax receipts, which Giertz says allows for a view of the state’s economy that can be formulated quickly.
But that wasn’t the case at the beginning of April, when the March Flash Index would normally have been issued. Giertz says the extension of tax payment deadlines to lessen the impact of coronavirus-related closures made it impossible at the time to provide a reading that was both quick and accurate. Giertz says he made some “ad hoc” adjustments to resume the Flash Index in time for the scheduled release of the April reading.