SOURCE: BMO Harris Bank

March 05, 2013 14:21 ET

Illinois Economy Growing at Modest Pace -- BMO Economics

CHICAGO, IL--(Marketwire - Mar 5, 2013) -

  • Manufacturing and exports have cooled; better momentum in 2013 
  • Home prices stabilizing, but recovery is lagging
  • State budget cuts continue

Economic growth remains modest in Illinois, with factory activity and exports softening in the latter half of 2012 and State budget cuts weighing. However, the housing market is finding some momentum according to the State Monitor report released by BMO Capital Markets Economics. 

Employment growth is rocky, with nonfarm payrolls up 0.7% year-over-year in December versus 1.6% year-over-year nationally. At 8.7%, the unemployment rate remains above the 7.9% national average, but has encouragingly fallen 1.0 ppts in the past year, narrowing the gap. Transportation and warehousing employment surged in the latter half of 2012, and is effectively back to pre-recession levels. Retail also appears to have found a floor in recent months. Government and construction sector employment is down 0.7% and 4.4% in the past year with local government payrolls still sliding even as the state-level jobs have stabilized. Manufacturing, an area of strength earlier in the recovery, has lost momentum with employment down 0.5% in the second half of 2012. 

"We've added over 100 new corporate relationships over the past quarter," said Dave Casper, Executive Vice President and Head of Commercial Banking, BMO Harris Bank. "Our local expertise, sector knowledge and mid-market focus are real advantages to helping our customers find solutions as they invest and upgrade their businesses."

Exports backed off from record levels in Q3, amid cooler global demand, but growth should pick up through 2013 -- the Chicago PMI, for example, rebounded significantly in January alongside a jump in new orders.

"The housing market is on the mend, but the share of mortgages with negative equity and distressed sales remain relatively high," said Doug Porter, Chief Economist, BMO Financial Group. "As a result, home prices haven't yet found as much traction as in some other markets, though a falling supply of homes for sale has helped."

Overall, Illinois' labor market continues to underperform, ranking in the bottom quartile on a wide range of metrics -- unemployment and underutilization remain high, and job growth continues to trail the national average.

The full State Monitor report can be downloaded at www.bmocm.com/economics.

About BMO Harris Bank
Based in Chicago, BMO Harris Bank N.A. provides a broad range of personal banking products and solutions through over 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, 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. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank(SM) is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with 1,600 branches, and a retail deposit base of approximately $180 billion. 

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