CHICAGO, IL--(Marketwired - Apr 25, 2014) -
- BMO Economics Special Report on Great Lakes region says economic activity will bounce back in 2014
- Illinois economy expected to grow 2.5 percent this year and 2.9 percent in 2015
- Exports will continue to rise following solid fourth quarter in 2013, with strong Chicagoland factory activity
The Illinois economy in 2014 will see notable improvement over last year, according to a special report released today by BMO Economics on the economic output from the Great Lakes region. The report, North America's Economic Engine, was released to coincide with the Council of Great Lakes Governors meeting, taking place in Chicago on April 25-26, 2014.
The report notes that the region is a major driver of North American economic output, employment and trade, accounting for nearly a third of combined Canadian and U.S. output, jobs and exports. Real GDP in Illinois is expected to rise 2.5 percent in 2014 and a further 2.9 percent in 2015, up from a below-average rate of 1.4 percent last year.
"The major bond-rating agencies -- Moody's, Fitch, S&P -- have all in recent week's heralded Illinois' passage of pension reform legislation; the hard work we have done over the last five years to rein in our budget; and the 5-year blueprint I introduced last month to stabilize the state's tax base as evidence that Illinois is now on a path toward 'fiscal stability,'" said Pat Quinn, Governor of Illinois. "We were pleased this week to learn the state's unemployment has fallen to its lowest in five years. There are more people working now than when I took office five years ago. Since 2010, Illinois has added 257,400 private-sector jobs. Site Selection magazine ranks Illinois 3rd in the nation for new business sites and expansions, so we welcome you to consider investing in Illinois. We can offer you wide tracts of land, world-class universities, symphonies and theaters, a well-educated workforce and a 21st-Century infrastructure with transportation access to the world."
"The Great Lakes region has so much going for itself with transportation infrastructure, advanced manufacturing, research and development, digital manufacturing, strong locally-rooted financial institutions, and some of the world's best post-secondary institutions," said Ambassador David Jacobson, Vice-Chair, BMO Financial Group. "I am delighted that the Council of Great Lakes Governors meeting is taking place here in Chicago, which is home to dozens of Fortune 1000 companies. We are a city like no other when it comes to reinventing itself. The discussions over the next two days here in Chicago will allow us to explore opportunities to create jobs, strengthen trade, open doors to new discoveries, and drive innovation and prosperity for all in the region."
Real GDP in Illinois is expected to rise 2.5 percent in 2014 and a further 2.9 percent in 2015, up from a below-average rate of 1.4 percent last year. Export growth should continue this year after rebounding in the fourth quarter of 2013 following a slow start to the year. Factory activity in Chicagoland is in recovery mode as well, with the Chicago Purchasing Managers Index (PMI) surging to a 2.5 year high recently.
"Business investment is expected to help the Illinois economy pick up in 2014 and the fading of public sector drag should also help boost growth in the State," said Michael Gregory, Head of U.S. Economics, BMO Capital Markets. "The housing market, too, is gathering momentum and in Chicago we have seen double-digit increases for home prices year over year. With improvement in economic growth and confidence in the state, we can expect to see an even more substantial recovery in home prices in the coming year."
Job growth in Illinois remains muted, running at a 0.5 percent year-over-year pace in the three months through March. The unemployment rate is expected to drift down to 7.6 percent in 2015.
Industries that had previously helped carry the state economy out of the slowdown -- such as manufacturing -- are now sluggish. However, employment at the state and municipal government levels has evened out and is no longer acting as a major drag on the labor market.
To view a full copy of the report, visit www.bmocm.com/economics.
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BMO Harris Bank provides a broad range of personal banking products and solutions through more than 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Banking products and services are provided by BMO Harris Bank N.A. and are subject to bank or credit approval. BMO Harris Bank® is a trade name used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and CDN $593 billion in assets (as of January 31, 2014).