JoDaviess

Carroll

Whiteside

Green Rock

Stephenson

Ogle

Lee

Jones

Cedar

Jackson

Clinton

DubuqueDelawareWinnebago Boone

HenryBureau

Scott

Rock Island

Lafayette

Grant

Iowa

Northwest IllinoisEconomic Trends and Growth Opportunities

(Determining the Size of the Pie)

Norman Walzer and Brian HargerPresented to

TCEDA Annual ConferenceChestnut Mountain Resort

Galena, IL

March 20, 2014

Presentation Overview

• Population and Economic Trends

• Composition of TCEDA Economy

• Business Starts and Entrepreneurship Opportunities

• Possible Areas for Growth

• Where Can We Go Next?

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‐0.5% ‐0.4%‐4.3%

‐0.3% ‐7.3%‐4.0% ‐4.5%

7.0%

‐4.7%‐15.2%

‐21.8% ‐22.2%

0.5%

22.3%

38.3%

50.0%

24.8%

6.0%

‐35%

‐20%

‐5%

10%

25%

40%

55%

70%

Percen

t Cha

nge 20

13‐202

5

Population Age Cohort

Source:  Woods & Poole Economics, Inc., 2013

Decrease less than 100 Decrease by 600 Decrease

less than 100 Decrease by 2,800 Increase by 1,500

Increase by2,600

Generation Alpha Generation Z Millennial

Baby Bust(Generation X)

Baby Boom

Silent Generation

Population and Work Force TrendsTCEDA Region 2013‐2025

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Economic TrendsPer Capita Gross Domestic Product

Being mostly rural, the TCEDA region has a lower GDP than Illinois as a whole.

Per capita GDP and the rate of growth are average for non‐metro counties in Illinois.

In the past four decades increasing urbanization resulted in a widening disparity in economic growth between cities, suburbs and rural areas.

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*The TCEDA Region consists of Carroll, JoDaviess and Whiteside counties in Illinois.Source: Woods and Poole Economics, Inc., 2013.

$18,640

$29,855

$16,992

$30,397

$23,874

$50,320

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$55,000

1970 1980 1990 2000 2010 2013 2020

PerCap

ita GDP Co

nstant (2

005) Dollars

Per Capita GDP (1970-2020)TCEDA Region*

TCEDA Region

Non-Metro Counties

State of Illinois

Income TrendsEarning Per Worker by Industry

Manufacturing jobs pay more than other sectors.

Despite a steep decline in employment, earnings per job in manufacturing are still more than 1.5 times the regional average for all sectors.

Although the service sector employs more people, earnings per job are 29% below the regional average and the rate of earnings growth has been relatively weak.

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

1970 1980 1990 2000 2010 2013 2020

Earn

ings

per

Em

ploy

ee

Earnings per Worker by Industry Sector TCEDA Region

Manufacturing

Services

Government

Government$52,738

Services$25,786

Manufacturing$61,401

Source: Woods & Poole Economics, Inc., 2013.Note: Figures are in constant (2005) dollars.

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Employment TrendsEmployment by Industry

Manufacturing, a major contributor to GDP, has continued to decline as a major employer. 

This decline reflects global competition, corporate mergers and acquisitions, and labor saving technologies (e.g. robotics).

Local factors, such as business costs, aging infrastructure, and labor supply also play a role.

Service sector jobs have replaced many  jobs lost in manufacturing, but pay less.

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

1970 1980 1990 2000 2010 2013 2020

Perc

ent o

f Tot

al E

mpl

oym

ent

Employment by Major Industry Sector TCEDA Region

Manufacturing Services Government

Source: Woods & Poole Economics, Inc., 2013.

Services37.1%

Manufacturing10.9%

Government13.7%

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7.6%JoDaviess

8.7%

8.9%Carroll

4.8%

9.5%Whiteside

2.6%

6.0%Green

0.2%

8.1%Rock0.2%

10.1%Stephenson

9.6%

10.7%Ogle7.0%

9.2%Lee5.2%

5.5%Jones0.3%

4.1%Cedar

0.6%

5.4%Jackson

1.7%

5.4%Clinton

4.5%

4.5%Dubuque

7.9%

4.0%Delaware

3.1%11.6%

Winnebago1.3%

11.5%Boone

1.1%

7.8%Henry3.0%

9.6%Bureau

7.7%

6.0%Scott3.0%

7.9%Rock Island

4.2%

5.6%Lafayette

1.0%

5.8%Grant

2.2%

6.2%Iowa0.1%

Employment TrendsTri‐State Region

LEGEND

Illinois = 9.2%0.4%

Iowa = 4.8%0.6%

Wisconsin = 6.7%0.2%

U.S. = 7.4%6.1%

Source: U.S. Bureau of Labor Statistics.

Data are not seasonally adjusted.

Top Figure: 2013 Unemployment Rate

Bottom Figure:Percent Change in

Non-Farm EmploymentJuly, 2009 – January, 2014

Lower unemployment rates in the past 3 years mostly reflect declining labor force participation. 

Non‐farm employment  has continued to fall in most of the region since the end of the recession. 

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Agriculture, Mining & Related6.5%

Construction3.1%

Manufacturing22.0%

Wholesale & Retail Trade

10.9%Transportation, Information, 

Warehousing & Utilities10.9%

Finance, Insurance & Real 

Estate17.9%

Professional, Scientific & Technical Services6.4%

Education, Healthcare & Social Services

3.6%

Other Services7.8%

Public Administration

11.0%

TCEDA Region

Economic CompositionGross Domestic Product by Industry, 2012

Manufacturing is 14.5% of employment in the region but generates 22% of Regional GDP.

The Finance, Insurance and Real Estate sector is a major contributor to the GDP, but is only 4.4% of employment.

Agriculture is 6.5% GDP, but supports sectors such as manufacturing (farm machinery, food processing), wholesale trade and transportation.

Total Regional GDP$3.84 Billion

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Source: IMPLAN, 2012.

Economic CompositionGross Domestic Product by Industry (2012)*

Industry Sector Carroll County JoDaviess County Whiteside County TCEDA Region

Agriculture and Related Activities 13.8% 6.7% 4.7% 6.4%

Mining 0.1% 0.1% 0.2% 0.1%

Utilities 1.2% 2.7% 0.2% 0.8%

Construction 3.6% 4.7% 2.4% 3.1%

Manufacturing 15.0% 12.2% 26.9% 22.0%

Wholesale Trade 7.4% 2.9% 4.7% 4.7%

Retail Trade 7.3% 7.3% 5.7% 6.3%

Transportation and Warehousing 3.3% 4.6% 11.9% 9.1%

Information 0.7% 0.9% 1.1% 1.0%

Finance, Insurance and Real Estate 21.9% 23.1% 15.2% 17.9%

Professional and Technical Services 3.0% 3.4% 3.5% 3.4%

Management of Companies and Enterprises 0.2% 0.9% 0.0% 0.3%

Administrative and Waste Services 1.7% 3.9% 2.2% 2.7%

Education 0.0% 0.2% 0.3% 0.3%

Health Care and Social Assistance 3.2% 2.5% 3.7% 3.3%

Arts, Entertainment, and Recreation 0.3% 1.9% 0.3% 0.7%

Accommodation and Food Services 2.1% 8.2% 2.1% 3.5%

Other Services 5.1% 5.0% 2.9% 3.6%

Government 9.9% 8.6% 12.0% 11.0%

Total Gross Domestic Product $507,041,832 $863,260,322 $2,471,948,536 $3,842,250,690

. *Percent of Total GDP, 2012.Source:  Purdue Center for Regional Development & Bureau of Labor Statistics, Quarterly Census of Employment and Wages

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Area Name Business Starts Business Start Rate (% 2004 Firms)

Business Starts per 1,000 Population

Carroll, Jo Daviess, and Whiteside Counties 177 3.5% 0.45

Illinois Non‐metro Counties 2,947 4.0 1.74

Iowa Non‐metro Counties 3,783 4.6 2.81

Wisconsin Non‐metro Counties 1,605 6.1 3.12

Comparison of Business Starts2004‐2007

Source: The Brandow Company, BizMiner, 2010.

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Entrepreneurial Environment

Source:  Norman Walzer and Andy Blanke. 2013. “Business Starts in the Midwest: Potential Entrepreneurial Groups.” Community Development, 44:3, 336‐349.

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Entrepreneurial Groups

Population Cohorts Related to Business Starts(850 Counties in 9 Midwestern States, 2004‐2007)

• Unemployed• Pre‐retirees (Persons between 56 and 64 years of age)• Small Farmers (250 acres or less)• Hispanic Population• Women between 25 and 34 years of age

R2 adj. = .49

Source:  Norman Walzer and Andy Blanke. 2013. “Business Starts in the Midwest: Potential Entrepreneurial Groups.” Community Development, 44:3, 336‐349.

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Opportunities for GrowthTCEDA Region

• Proximity To Urban Growth Centers (E.G. Dubuque, Quad‐cities & Chicago)

• Former Savanna Army Depot With Additional Investments in Infrastructure

• Federal Prison Facility In Thomson Offers Business Opportunities for Suppliers plus Increased Housing and Retail Markets

• “Re‐shoring” of Manufacturing Activities has Job Creation Potential

• Local Food Movement Increases Markets for Agri‐business Firms 

• Proximity to Iowa And Wisconsin Provides Access to Broad Markets 

• Looming Demand for Workers to Replace Retiring “Baby Boomers” will be the Main Job Openings in the Next Decade 

• Higher Level of Training and Skills will be Required to Work with Complex Technologies (Robotics, 3D Printing And Nano‐manufacturing). 

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Where Can We Go From Here?

• Promote and Support Business Startups and Expand 2nd Stage  Companies.

• Focus on More Skilled and High‐paying Job Opportunities.

• Expand Training Opportunities to Replace Retiring Workers (“Boomers”).

• Meet The Demands for Healthcare and Other Services for the Elderly      (Especially Housing, Travel And Recreation).

• Promote And Market High Quality Of Life And Regional Assets.

• Use Quality Jobs To Attract And Retain Residents (Especially Youth).

• Leverage Growth Opportunities In Tri‐state Area (e.g. I.T. in Dubuque; Farm Machinery Mfg. and Food Processing in Clinton and Quad Cities; Aerospace, Construction Machinery Mfg. and Auto Mfg. in Rockford & Peoria).

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Additional Resources

• B. Harger, M. Henriksen, N. Walzer, and A.  Blanke. 2013. Promoting Prosperity in Northwest Illinois. DeKalb, IL:  Center for Governmental Studies. 

• B. Harger, M. Henriksen, and N. Walzer. 2011. West Whiteside County, IL: Assessing Economic Opportunities. DeKalb, IL: Center for Governmental Studies.

• N. Walzer and B. Harger. 2011. “Tri‐State Alliance Economy: Past Trends and Implications for the Future”. Presentation to Annual Meeting of Tri‐State Alliance, Rockford, IL.

• G.F. Hamm and N. Walzer. 2009. Stimulating Entrepreneurship in Carroll County. Macomb, IL: Illinois Institute for Rural Affairs.

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For More Information, Contact

Norman WalzerSenior Research Scholar

(nwalzer@niu.edu)

Center for Governmental StudiesNorthern Illinois UniversityDeKalb, Illinois  60115

“CGS Builds Stronger Regions Through Innovation and Collaboration”

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