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Manufacturing in Illinois

August 2010

State and Metropolitan Area Production

Like the United States as a whole, Illinois has experienced a historical upward trend in production over the past four decades, while the manufacturing sector’s role has decreased. Manufacturing output fell from accounting for 32 percent of total state GDP in 1965 to 18 percent in 1997, and then fell further to 12 percent in 2008. Despite rapid growth in the services and finance, insurance, and real estate sectors between 1965 and 1997, manufacturing remained a major contributor to state production.

Source: Bureau of Economic Analysis, U.S. Department of Commerce

Growth trends of Illinois’ manufacturing sector largely follow that of the nation as a whole. Between 2005 and 2008, manufacturing production in Illinois grew 10.4 percent, compared to the 10.6 percent growth of nationwide manufacturing output during the same period. Also during this period, overall production in Illinois increased by 15 percent.

Source: Bureau of Economic Analysis, U.S. Department of Commerce

Source: Bureau of Economic Analysis, U.S. Department of Commerce

Compared to the overall U.S. metropolitan portion of domestic production, between 2001 and 2008 manufacturing played a larger role in metropolitan gross domestic product (GDP) for most of the metropolitan areas that are located fully or partially in Illinois. During this period, Peoria reported the highest growth in manufacturing production, increasing by 73 percent. Peoria was followed by the Davenport-Moline-Rock Island (up 54 percent), Springfield (up 38 percent), Decatur (up 22 percent), and Danville (up 20 percent) metropolitan areas. During this period, the Bloomington-Normal area was the only metropolitan area to report a decrease in manufacturing output, decreasing 20 percent. In comparison, the overall U.S. metropolitan portion of manufacturing production grew by 23 percent between 2001 and 2008.

Source: Bureau of Economic Analysis, U.S. Department of Commerce

*Data withheld for the St. Louis, MO-IL metropolitan area

Employment and Wages

Between 1990 and 2009, employment in manufacturing has declined by 37 percent in Illinois to account for 10 percent of overall state nonfarm employment in 2009. Meanwhile, overall state nonfarm employment saw an increase of 7 percent over the same period. On a metropolitan level, manufacturing employment declined in all of Illinois’ metropolitan areas between 1990 and 2005, with Danville reporting the highest decline (down 36 percent). Manufacturing employment fell further between 2005 and 2009. The Bloomington-Normal area showed the highest decline during this period, falling by 30 percent, followed by Champaign-Urbana which fell by 22 percent. In 2009, manufacturing employment in the Chicago-Joliet-Naperville area (Illinois portion, only) accounted for 57 percent of the state total, the highest by far among the metropolitan areas located fully in Illinois. Chicago-Joliet-Naperville was followed by the Rockford metropolitan area, which accounted for 5 percent of total state manufacturing employment.

Statewide, manufacturing employment was, on average, 6 percent lower in the first half of 2010 as the same months of the previous year. In comparison, overall nonfarm employment decreased, on average, by 2 percent over the same period.

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

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

Chart reflects percentage of total nonfarm employment

Statewide, wages paid to those employed in Illinois’ manufacturing sector have been lower than the overall average for all private employees, unlike other states. Between January 2007 and January 2010, the difference between manufacturing sector wages and overall private sector wages grew by 1,314 percent. In the first half of 2010, manufacturing wages were essentially the same as during the same period of 2007. In comparison, overall private sector wages increased by 0.5 percent during the same period and average hourly earnings for all goods producing employees increased by 5.4 percent.

On a metropolitan level, most metropolitan areas in Illinois reported an increase in average hourly earnings for all private sector employees between 2007 and 2009. The Champaign-Urbana area showed the highest increase during this period, rising by 20 percent. Champaign-Urbana was followed by Decatur (up 8 percent), Davenport-Moline-Rock Island (up 7 percent), Danville (up 5 percent), and Springfield (up 4 percent). Both the Chicago-Joliet-Naperville and Rockford metropolitan areas reported a 0.2 percent decline in wages during this period.

International Trade

Manufactured Goods Accounted for 91 percent of Illinois’ Exports in 2009

Between 2002 and 2008, international exports from Illinois more than doubled, increasing by 109 percent. The leading manufactured goods export categories in terms of growth during this period were beverages and tobacco products (up 1,033 percent); petroleum and coal products (up 458 percent); primary metal manufacturing (up 194 percent); miscellaneous manufactured commodities (up 146 percent); furniture and fixtures (up 139 percent). Manufactured goods as a percentage of total merchandise exports declined slightly during this period, falling from accounting for 96 percent of total merchandise exports in 2002 to 91 percent in 2008. Among non-manufactured goods exports, agricultural products showed high growth during this period (up 792 percent).

After declining 22 percent between 2008 and 2009, Illinois’ exports increased by 17 percent in the first half of 2010, as compared to the same half of 2009. The leading export categories in the first half were machinery, except electrical; chemicals; transportation equipment; computer and electronic products; and food and kindred products. During this period, exports of manufactured goods increased by 20 percent compared to the first half of 2009. The industry that saw the highest growth in dollar terms was motor vehicles, which increased by $471 million, or 149 percent, during this period. Motor vehicles was followed by motor vehicle parts; agricultural and construction machinery; navigational, measuring, medical, and control instruments; and engines, turbines and power transmission equipment. Together, these products accounted for more than one-third (40 percent) of the increased exports in the first half of 2010.

In 1999, Illinois’ top trading partners were Canada ($11.4 billion), Japan ($2.1 billion), Mexico ($1.9 billion), the United Kingdom ($1.7 billion), and Germany ($1.4 billion). The state’s primary exports to Canada consisted of transportation equipment (37 percent); machinery, except electrical (20 percent); chemicals (8 percent); computer and electronic products (7 percent); electrical equipment, appliances and components (4 percent).

Ten years later, Illinois’ top trading partners remained mostly unchanged, however China jumped to become the state’s third largest export market (up from 13th in 1999). In 2009, Illinois’ primary exports to Canada were largely the same as well: machinery, except electrical (21 percent); transportation equipment (12 percent); chemicals (11 percent); computer and electronic products (8 percent); food manufactures (8 percent). Between 1999 and 2009, Illinois’ exports to China increased 464 percent, largely due to increased exports of machinery (except electrical), agricultural products, and waste and scrap.

Source: Bureau of the Census, U.S. Department of Commerce

Metropolitan Area Exports

On a metropolitan level, all of the metropolitan statistical areas located fully or partially in Illinois saw merchandise export growth between 2006 and 2008 (the latest data available; note that data for Decatur is withheld to avoid the disclosure of confidential information). At 77 percent, the Bloomington-Normal area saw the largest increase in exports during this period. In 2008 these exports consisted largely of crop production; electrical equipment, appliances, and components; and plastics and rubber products. More than half of Bloomington-Normal’s exports (59 percent) went to trading partners in the Asia Pacific Economic Cooperation (APEC).

Exports from all of these metropolitan areas went largely to trading partners in APEC (typically greater than 50 percent of a metro area’s exports), with several sending significant exports to partners in the European Union and the Organization of Petroleum Exporting Countries (OPEC).

Data Sources and Additional Information

International Trade (Export) Data:

Domestic Data:

Additional Resources of Interest:

Notes:

1. Prior to 1997, industrial sectors were classified based on the Standard Industrial Classification (SIC) system. After 1997 the North American Industry Classification System (NAICS) was used.

2. Data for manufacturing gross domestic product in the St. Louis metropolitan statistical area are withheld to avoid the disclosure of confidential information.

3. Trade data for the Decatur metropolitan statistical area are withheld to avoid the disclosure of confidential information.

4. The share of total state exports for a metropolitan area cannot be calculated for areas that cross state boundaries.

5. Export commodity and trade partner rankings for metropolitan areas are based off of data that is publicly available. In some sectors, data was withheld to avoid disclosing figures for individual companies.

6. For world region and trade organization definitions, see World Regions and Trade Organizations.

Prepared by the Office of Trade and Industry Information, International Trade Administration

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