URBANA – The University of Illinois Flash Index reading of 105.8 in July showed the Illinois economy growing at a slightly slower pace, compared to June’s reading of 106.0. But the economist who compiles the index doesn’t think the state’s economic growth rate is going down.
“I think it’s more like, not a real decline, but a plateauing of the growth rate,” said J. Fred Giertz, who compiles the Flash Index for the university’s Institute of Government and Public Affairs. “It’s not going to continue to get higher and higher and higher. It’s staying at approximately the same level, which is actually very good right now.”
The Flash Index readings are based on Illinois tax receipts, and given on a scale where anything above 100 shows a growing economy.
Giertz says that even with the decline, the Flash Index shows the state economy 13 points above its pandemic low point of 92.8 in May 2020, and also a fraction of a point higher than the Flash Index throughout 2019, before the COVID-19 slowdown occurred, when all readings were above 105.0.
“We’re back to higher than we were prior to the pandemic”, said Giertz. “And within a few months, we’ll probably be where we would have been, even without the pandemic. So, the growth has sort of made up for that loss.”
Giertz says the economy has its problems, with bottlenecks arising due to shortages of labor or materials, and the Illinois unemployment rate stuck at around seven percent for the past three months. But he says there are also bright spots, with consumers ready to spend and Illinois bond ratings getting upgrades.
After dropping below 100 during the opening months of the COVID-19 pandemic, the Flash Index showed the Illinois economy recovering steadily, and rising aboive 100 this past April. In May, it rose to 105.3, and has stayed above 105 since then.
Giertz calls Illinois’ economy’s recovery “truly remarkable”. But he warns that new problems could arise with the phase-out of federal stimulus money, and potential problems with COVID-19.