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Illinois economic index down slightly, but still expanding, expert says

J. Fred Giertz, Institute of Government and Public Affairs
217-244-4822

Mark Reutter, Business Editor, News Bureau
217-333-0568

12/1/2005

EDITORS, NEWS DIRECTORS: The Flash Index of Economic Growth, produced by economists at the University of Illinois, is based on the most up-to-date information on the Illinois economy.

CHAMPAIGN, Ill. — The University of Illinois Flash Economic Index fell slightly in its rate of growth in November, to 106.4, from its 106.9 level in October.

Because the Index remains well above 100, the break-even point between growth and contraction, the state economy continues to expand at a robust rate.

The Index has been above 106 for six months. “This is consistent with sustained strong economic growth that might be expected at this stage of the business cycle,” J. Fred Giertz, the University of Illinois economist who released the data, said today.

He noted that November marks four years since the end of the 2001 national recession. “Since 1980, expansions have lasted about 10 years. If this pattern continues, the state and nation can expect several more years of expansion,” he said.

Sales-tax receipts were up slightly from November of last year, while income-tax receipts were down marginally. Corporate receipts were weak for the month, but this may be the result of the timing of payments, since November is historically a month of low corporate revenues, according to Giertz.

The Flash Index is a weighted average of state growth rates in consumer spending, corporate earnings and personal income. Tax receipts from corporate income, retail sales and personal income are adjusted for inflation before growth rates are calculated. The growth rate for each component is then calculated for the 12-month period using data through Nov 30.

line chart showing upward trend of economic growth leveling off