November Edition 2008
Indiana National Leader in Job Attraction
For the second year in a row, Indiana leads the nation in attracting new jobs through foreign investment according to IBM’s Global Location Trends report. The Hoosier state was number one per capita for job attraction from international investment and number two overall for the attraction of production jobs from international companies. Helping this effort was Governor Daniel’s decision to revamp the state’s economic development efforts and continues to pay dividends. One of the main efforts of the plan was to in-source jobs from around the world to Indiana compliments the efforts to retain and grow home-grown Indiana companies around the state. The report registered more than 10,000 foreign investment project announcements made in 2007 across the world and includes top international investments in Indiana such as FoxConn, TS Tech, SMC Corporation and ArcelorMittal. Since 2005, international companies have invested more than $8 billion into their Indiana operations, creating more than 15,800 new jobs.
Global Leader for IBM-Plant Location International Roel Spee stated that global investment trends in 2007 show companies increasingly widening their investments to include more markets around the world in their efforts to access new markets, talent pools, or improved efficiency. The U.S. continues to be a top performer for creating jobs through new inward investments by multinational companies. Ernst & Young found that Indiana was number one in winning new competitive job-creating investments from all sources when measured on per capita basis in both 2006 and 2007.
Indiana’s Economic Development Corporation is on the brink of record-breaking commitments for new jobs and investment for the fourth consecutive year. Since January, 130 businesses have committed to create 16,120 new jobs and invest more than $3.9 billion in their Indiana operations. Governor Daniel’s creation of the agency in 2005has led to the state logging three years of record-level attraction of new job-creating investment. Since its inception, the Indiana Economic Development Corporation has worked with more than 600 companies that have committed to create more than 75,000 new jobs and invest more than $18 billion in their Indiana operations. Nearly two-thirds of all projects completed involve expansions of existing Indiana businesses.
Indiana National Leader in Job Attraction
New Jersey’s Economic Recovery Plan
New Jersey Governor Corzine unveiled a multi-faceted plan to provide immediate assistance for Garden State residents and statewide long-term economic growth options to coax the state out of the current national economic recession at a rare joint session of the NJ legislature. His plan has four areas of attack:
The plan will address the most critical needs of New Jersey families: foreclosure prevention, energy bills and food purchase assistance. It will also rapidly advance planned infrastructure projects-including the rebuilding of urban and suburban schools, expansion of the Turnpike and Parkway, and construction of a new mass transit tunnel-creating an estimated 43,600 jobs.
In the long-term, Governor Corzine proposes substantial changes in New Jersey’s tax policy that will make the state more inviting to small business owners and relocating businesses, while aggressively cultivating the industries of the future to better position the state for years to come in the areas of off-shore wind energy, solar energy, and projects focused on energy conservation and renewable resources. The Governor also said the state will continue to cut costs and reduce spending to prepare for impending reductions in revenue. He previously reduced state spending by almost $3 billion, reduced the overall size of government, and dedicated $650 million toward debt reduction.
Governor Corzine Launches Aggressive Plan for New Jersey’s Economic Recovery
U.S. Economy: Manufacturing Slumps by Most in Decades
The U.S. economic downturn deepened in September and October as the credit crisis intensified, according to recent reports. Industrial output fell 6 percent in the third quarter, the most since 1991. The Labor Department also reported that for the first time in two years consumer prices didn’t increase for two straight months. Shutdowns caused by hurricanes and a Boeing Co. strike caused production at U.S. factories, mines and utilities last month to decline 2.8 percent, the most since 1974, after a 1 percent drop. The median forecast of 73 economists surveyed by Bloomberg News was for a 0.8 percent fall.
Homebuilder confidence also slid this month to the lowest level since record-keeping began in 1985, a sign the crisis in credit markets may deepen the worst housing recession in a generation. The Labor Department stated that initial jobless claims fell this month as job losses related to the Gulf Coast hurricanes subsided, while total benefit rolls rose to the highest level in five years. First-time applications declined by 16,000 to 461,000 in the week that ended October 11.
The recent slump in raw-material prices and the decline in shipping costs indicate just how far-reaching the consequences of the global financial crisis will be for the real economy. Since early summer, the price of steel has fallen by 20-70% and the key rate for bulk shipping of commodities is down by more than four-fifths. Some grain cargoes are piling up in ports because their buyers’ letters of credit have not been honored, because of the lack of confidence in the banks that underwrite them. An Australian producer has seen the same problem with iron ore shipments to China.
The most significant sign of falling activity is the Baltic Dry Index (BDI), which traces prices for shipping bulk cargoes such as iron ore from producers in Brazil and Australia to markets in American, Europe and China. The index has plunged by 85% after hitting a record high of 11,793 points in late may. It is a leading indicator of international trade and, by extension, economic activity. Steel prices have also been falling fast from record highs. In the U.S. the price of coil steel, used to make cars and white goods, has fallen by 20% since May.
However, some see overseas as opportunities for exporters. Micromedical Technologies Inc. ships around the globe, but it is the credit market at home that has created the immediate uncertainty for sales and leasing of medical diagnostic equipment. Co-owner Rick Miles has only seen this in the U.S., where leasing companies are less willing to give credit to doctors. The company has sales representatives in markets in China, South Korea Ukraine, Malaysia and Poland and that their overseas sales have remained steady despite recent market turmoil. While sales remain good, the company has put expansion and additional hiring on hold. Some economists believe that exports including Caterpillar Inc. and Archer Daniels Midland have helped Illinois avoid the worst of the economic downturn to hit both coasts. Illinois typically ranks fifth or sixth annually among the nation’s largest exporting states. Others claim that concern of a worldwide recession appear to have had little effect yet on state exports, but that there is usually a lag time between a slowdown and overseas order.
Manufacturing Slumps by Most in Decades
Manufacturing Activity Contracts Again
Weak U.S. output, job market point to recession
Overseas opportunities remain strong for exporters
October Edition 2008
New Report Ranks America's Top-Performing Cities
What are America's best-performing cities? Cities with strong technology, energy and trade sectors lead the nation in job creation, according to a report released today by the Milken Institute and Greenstreet Real Estate Partners.
In the 2008 Best-Performing Cities Index, Provo, Utah, leads the rankings, which are dominated by thriving metro areas in Texas, Washington, Utah, Alabama and the Carolinas.
The annual index provides a snapshot of where America's jobs are being created and sustained. It factors in both long- and short-term indicators of employment and salary growth, as well as technology output measurements. The 2008 results reveal a broad rebound in the technology sector, plus strong activity in exports and energy production.
The top 10 cities for 2008 (with their 2007 rankings in parentheses) are:
1. Provo-Orem, Utah (8)
2. Raleigh-Cary, North Carolina (10)
3. Salt Lake City, Utah (18)
4. Austin-Round Rock, Texas (20)
5. Huntsville, Alabama (16)
6. Wilmington, North Carolina (2)
7. McAllen-Edinburg-Mission, Texas (7)
8. Tacoma, Washington (50)
9. Olympia, Washington (37 in the 2007 ranking of small metros)
10. Charleston-North Charleston, South Carolina (12)
Several metros that once topped the rankings fell due to a sharp downturn in their housing and construction markets; formerly booming locations in Florida and California took particularly significant hits. Cities in the industrial Midwest that depend on manufacturing also continue to suffer a long-term decline.
The Milken Institute/Greenstreet Real Estate Partners Best-Performing Cities 2008 index is available for free download at www.milkeninstitute.org. The national rankings and underlying data can also be explored at http://bestcities.milkeninstitute.org.
Ethanol: Too Much or Too Little?
Illinois is getting another ethanol production facility in Madison worth $275 million. The state will assist with $4 million in financial assistance towards development. Abengoa Bioenergy is building the plant on a 79-acre site in the Tri-City Regional Port District. The grant comes from the state’s Renewable Fuels Development program. The governor claims that the project would create good-paying local jobs and help reduce the nation’s dependence on foreign energy. The project is expected to create 250 construction jobs and 60 permanent jobs. The new plant will be in Representative Jay Hoffman’s district, one of the governor’s strongest allies. The plant is expected to be in operation by late 2009. It will produce an estimated 88 million gallons of ethanol a year from corn and other cereal grains. The plant is said to be one of the cleanest and most efficient ethanol facility in the United States.
This will be Abengoa’s first in Illinois and stated that it is in an excellent location with easy access to river, rail and highway transportation. It could also be well-suited to the future production of ethanol from cellulose sources states the company’s president and CEO. Abengoa BioEnergy is a division of a Spanish company, Abengoa SA, the world’s leading producer of ethanol and one of the leading producers in the nation, with four plants and three more under construction. Vice-President Christopher Standlee said that ethanol is a growth industry despite the rising price of grain. He attributed the rising grain prices to rising gas prices and said he was confidents that improved ethanol technology will reverse that trend. In all, 49 ethanol plants are operating, under construction or have applied for permits in Illinois, up from four in 2000. For some towns though, ethanol is a lost dream.
Ford Heights Ethanol LLC applied in June 2006 to build a distillery in the Illinois town that bears its name, promising economic revival to replace abandoned houses and closed stores. Two years later, no work has begun. For Ford Heights and other agricultural towns, the “green-collar” job revolution envisioned by federal biofuel mandates is a dream deferred. Knee-high grass and old tires cover the site as record prices for corn, the main ingredient in ethanol, discourage investment in new plants. The $20.8 billion industry may have itself to blame. Breakneck construction led to 169 ethanol plants, already producing more than U.S. mandates require for the fuel additive this year. The distilleries buy so much corn-as much as a third of the U.S. crop this year- that they have contributed to price increases. Claims and Houston fuel-consulting company, “we have in fact overbuilt. This thing is pretty devastating.”
Initial enthusiasm has given way to concern that diverting crops for fuel is accelerating a rise in food costs. Some U.S. food companies formed a “Food Before Fuel” coalition to oppose ethanol mandates. Ethanol may account for 20 percent of the gain in the rate of U.S. food inflation.
The overcapacity prevents lenders from financing ethanol plants that distill ethanol from corn kernels. President of Ford Heights Ethanol claims that lenders balked at funding the project and that one of their biggest regrets is that they couldn’t get manufacturing in a community that so desperately needed it. Across Illinois, 795 million gallons of ethanol are on hold. That’s slowed construction and growth in permanent ethanol-related jobs. The 168 plants had capacity for 9.96 billion gallons as of Aug. 26, almost 1 billion more than the U.S. requires this year. Another 43 plants scheduled to be build or expanded would raise capacity to 13.8 billion gallons.
Gov. Announces Plans for Biofuels Production Facility
Ethanol is Dream Deferred for Farming Towns Too Late to Biofuel
Filling the ‘Forgotten Middle’
More education is better than less in a tough job market but a college degree isn’t necessary for a good-paying job. A new study by the Workforce Alliance focuses on the large “forgotten middle” of the labor market, such as dental hygienists and truck mechanics, require more than a high school diploma but not a four-year college degree. Many of these pay better than the median wages and can’t be outsourced. These positions are nearly half of all employment in Illinois and are projected to represent nearly 1 million job openings during the decade ending in 2014. However, there is a shortage of workers to fill these jobs.
The report is part of a national campaign called Skills2Compete that advocates one of the most ambitious agendas since the GI bill sent 8 million returning service men and women to school in the 1940s and 50s. The goal is to guarantee access to schooling beyond high school for all workers through associate degrees, apprenticeships and occupational certificates. Every worker should have access to at least two years of post-secondary education and training that can be pursued at whatever pace works best for them is a major part of the campaign. The campaign also aims to examine the belief that the labor market is dominated by low-skill service jobs at one end and higher-paying jobs that require college degrees at the other. The notion ignores that about 45 percent of U.S. job openings between 2004 and 2014 will fall in the large middle range of skill requirements. In Illinois, middle-skill jobs will account for 47 percent of all openings through 2014 while 43 percent of non-college-degree workers have some post-high school schooling.
A manager of training and development services for S&C Electric Co. states that the decline in vocational programs that prepared high school students for skilled trades, coupled with demographic shifts, made it harder for the city’s manufacturing plants to find workers. There’s a misperception that manufacturing is a dying industry. Low-skill tasks go overseas, but there has to be a foundation of skilled employees to keep high-tech manufacturing in the city. The associate director of the non-profit Chicago Jobs Councils said that every time there is a spike in unemployment is an opportunity to reinvest in workers.
Filling the Forgotten ‘Middle’
September Edition 2008
Capital Plan-Moving Past the Hype
Governor Blagojevich has been espousing the same things almost everywhere he goes: A new capital construction program for Illinois will create hundreds of thousands of new jobs, providing a much-needed injection into a slumping economy. Just how many jobs will actually be created, though? The capital plan would authorize new road, school, water and many other construction projects during the next several years. Blagojevich and lawmakers have talked about creating a new capital plan for years now. Next year will mark an entire decade without one. Proponents state that with costs rising, the time to begin these much needed projects is now. With all the bickering in Springfield, it’s hard to get a minor bill passed, let alone a major initiative like a capital plan. The Governor scaled back the ballooned $34 billion plan approved by the Senate to his original $25 billion package mentioned in his State of the State address in February.
Getting an exact number of new jobs is difficult since different numbers have been floated by different people promoting Illinois Works. Before the scaled-back version, Blagojevich was stating 600,000 new jobs. The Illinois Works site listed 535,000. Economics professors at SIU were asked to calculate the capital program’s economic impact on Illinois. They came up with numbers for three versions of a capital bill: $25 billion, $30 billion and $35 billion. Estimated job creation ranged from 443,596 to 611,024. The study does not break down new jobs by cities or regions of the state.
Jobs are divided into three categories: direct, indirect and induced. Direct jobs are those tied directly to the construction projects funded by the capital bill, such as a construction worker. Indirect jobs are a step removed. A concrete company buys more cement because of the capital program and then has to hire more workers. The broadest category is induced jobs, those created because the construction workers are spending money from their new jobs. The people hire for induced jobs then spend their money and create more new jobs. If a $35 billion capital plan would create 611,000 jobs, only 254,000 would be direct jobs, 68,000 indirect and 289,000 induced. Even if the plan only creates 500,000 or 450,000 jobs, it’s still that many more jobs.
Jobs Promise: Fact or Fairy Tale?
Upcoming EDC Meeting
The next Economic Development Council meeting will be Tuesday, September 2 from 11:30-1pm. The meeting will be at the Chamber's Chicago office. Special guest speaker will beKatarzyna (Kasia) Batorski, Business Development Manager & Private Sector Liaison Officer-the World Bank Group, Illinois Global Partnership, Inc.
Kasia will be talking to the council about the Illinois Global Partnership’s role in building collaborative partnerships that open markets, access customers and facilitate transactions.
As global trade becomes more and more important to the success of Illinois business and economic development, we hope you’ll be able to join us for this informative presentation and discussion. For more information contact Candace Gerritsen at cgerritsen@ilchamber.org.
Indiana Governor Gets It
Today Indiana enjoys remarkable accomplishments possibly unthinkable a decade ago. These include a gold-plated AAA credit rating, a CNBC-named “most improved state for business” ranking, billions of dollars in new investments and thousands of new jobs. However, many Hoosiers are behind in terms of real academic achievement. For the administration, this signifies a real challenge. This low growth also applies to manufacturing where future 21st-centuty floor workers will needs an academic background the equivalent of an associate degree to hold a job. Many business leaders in Indiana have called for policies to help the state replicate the “Irish Miracle.” This was when Ireland achieved sustained, double-digit economic growth for more than a decade in the late 20th century. Indiana created the Midwest equivalent of a “Hoosier Tiger” economic engine.
Helping to spearhead is Indiana Governor Mitch Daniels whose program will shortly begin meeting the critical education challenge. Labeled a risk taker, Daniels has put forth some far-reaching education proposals with less than 90 days left in a reelection campaign. “Hoosier College Promise” if passed, would pay up two years of free tuition for children from families with less than $60,000 in combined household income. With state businesses and policy leaders worrying about doubling costs for traditional K-12 public education and no rise in outcomes, the priorities for the governor for a second term are clear.
The Governor also implemented the Indiana Economic Development Corporation (IEDC). IEDC responds quickly to help businesses locate, grow and thrive in Indiana. The State of Indiana’s lead economic development agency, the IEDC oversees Indiana’s statewide business attraction and development efforts, coordinates state programs and incentives for companies looking to grow in Indiana, and provides technical assistance, business expertise and funding to Indiana entrepreneurs and high-tech start-ups. The IEDC is led by Indiana Secretary of Commerce and Chief Executive Officer Nathan J. Feltman and governed by a 12-member board chaired by Governor Mitch Daniels.
Indiana Gov. Daniels: Serious Work Force, Education Reform on Deck
Indiana Economic Development Corporation
The Coming Job Boom?
So far this year there has been a loss of 463,000 jobs. However, some are starting to hope for an improvement. Economists at the University of Michigan released a report that 900,000 jobs will be added next year and that 2.6 million more in 2010. This forecast is based on a belief that the economy will finally begin to rebound in the second half of 2009.
Housing and autos could help lead the comeback states an economist from the University. To get the recovery, there will have to be a turnaround in housing which means an increase in construction jobs. There could also be an increase in vehicle manufacturing with the shift to smaller cars. With high oil prices, more companies are investing in other energy sources, such as solar power, wind power and ethanol. With new research and development of alternative fuel, job gains can be seen in this industry as well.
However, the job market is not expected to improve in the coming months. The University is predicting a total of 700,000 jobs lost in 2008. There could also be a lag in the recovery of the labor market even with an upswing in the housing market. The credit crunch will be a huge factor. With fears of more bailouts and banks collapsing, it’s hard to imagine a sustained improvement in the economy and job market occurring until banks sort out their balance sheet debacles.
Five Illinois Cities Named in Bottom 25 of America’s Metros-Winners and Nonwinners
Industrial areas of Michigan, Ohio, Illinois and Indiana have lost manufacturing jobs to Chinese, European, Japanese and other competitors-compounded by the damage to heavy industry of higher oil costs. The list was based on change in Per Capita Income 2003-2007.
341 Danville, IL
349 Rockford, IL
353 Kankakee-Bradley, IL
358 Bloomington-Normal, IL
363 Springfield, IL
America’s Metros-Winners…and Nonwinners
August Edition 2008
Sluggish National Economy Starting to Catch Up to Illinois
Illinois lost around 6,100 jobs in June pushing unemployment to 6.8 percent; the highest level since 1993. This month’s unemployment rate is 0.4 points higher from May. The number of unemployed increased for the second month in a row, rising by 26,900 to 463,900 unemployed individuals. Sectors hit the hardest include financial activities including the insurance and real estate sector, manufacturing trade and transportation area. Financial activities dropped 2,900 workers; manufacturing lost 2,200 and trade and transportation sector lost 1,700 workers. For several months at the end of 2007 and through the first part of 2008 Illinois was able to fight off some of the national trends and continued to be stable on the jobs front. Now, some of these national trends have caught up with the Illinois economy. IDES Director James Sledge made the point that Illinois needs a capital plan now more than ever to help create hundreds of thousands of jobs and give our economy a much-needed boost.
Nationally, the number of newly laid off people filing claims for unemployment benefits raised past 400,000. The Labor Department reported that those filing for benefits rose by 34,000 to 406,000. Employers cut payrolls by 62,000 in June, the sixth straight month of nationwide job losses. The unemployment rate holds steady at 5.5 percent. In May, the jobless rate spike to 5.5 percent, the biggest over-the-month increase in two decades and left the rate at its highest since October 2004. So far this year, the economy has lost a total of 438,000 jobs, an average of 73,000 per month. The number of unemployed people in June was 8.5 million, up from 7 million a year ago.
To read more about this topic, click on the links below:
Illinois Job Losses Mount in June
State Joblessness at Highest Level in 15 Years
More People Sign Up for Jobless Benefits
Joblessness Reaches 15-Year High
Unemployment Claims Jump Pas 400K
Ford Brings Cars to U.S.
Due to growing demand for more fuel-efficient options, Ford Motor Co. plans to revamp some U.S. plants and bring six small vehicles to the U.S. market from overseas. Ford has no immediate plans to close U.S. plants despite overcapacity in the slumping market. Instead, the automaker will retool plants to increase production of smaller cars and engines. However, a Wall Street analyst from Lehman Brothers said in a note to investors that Ford still has too much North American plant capacity and needs to close plants.
The moves to the U.S. will accelerate Ford’s efforts to ease its dependence on trucks, sport utility vehicles and vans, which accounted for 45 percent of its sales in the first half of the year. Ford’s U.S. sales dropped 14 percent in the first six months of 2008 as consumers sought out smaller vehicles due to rising gas prices. The steep decline in sales is expected to drop Ford’s second-quarter results after a surprise $100 million profit from the first quarter which claims to be an anomaly by the company.
With plunging truck and SUV sales, production cuts were also made at General Motors, Chrysler, Toyota and Honda. In May, Ford announced it would cut truck and SUV production and cut several thousand salaried jobs on top of the 8,000 U.S. hourly jobs it is attempting to cut this year. Ford begins to offer buyouts to workers at facilities in Michigan and Ohio, building on targeted buyouts offered in June at other plants in Kentucky and the Midwest. The company now plans to bring even more vehicles over from Europe and produce them in North America. Greg Gardner from the consulting firm Oliver Wyman said converting an auto plant’s operations from trucks to cars is not easy and could cost each factory tens of millions of dollars. The critical change has to be made since Ford lost small-car sales because of a dwindling inventory.
Ford Readies Economy Cars for U.S.
Industrial Website Helps Illinois Manufacturers do Business with European Countries
The online industrial trade portal Buy American, a division of the Industrial Leaders Group (ILG) plans to focus on promoting Illinois-based manufacturers of industrial supplies, machines and manufacturing equipment throughout Europe. Buy American will feature a number of selected Illinois manufacturers throughout the ILG network consisting of industrial directories, international trade forums, B2B blogs and online industrial marketplaces. Illinois manufacturers seeking to enter or expand in the national or international markets are able to include their company on the site along with other U.S. industrial suppliers at http://www.worldwideindustrialmarketplace.com/freelisting.html
The site currently includes offerings from manufacturers in Illinois in or around Chicago, Naperville, Springfield, Waukegan, Rockford, Elgin, Cicero, Aurora, Joliet, Peoria and other cities and counties throughout the State.
A spokesman for the company stated that “Illinois is one of the leading industrial and technology markets in the United States with its share of world-class manufacturers serving the American and international industrial community. The plan of Buy American over the next few months is to focus on helping Illinois manufacturers expand into overseas markets by connecting them with engineers and other industrial and technical buyers in Europe. He also explained that the purpose of Buy American is not to limit or restrict trade but rather encourage business partnerships between U.S and international companies. “International trade is vital to a country’s economy and competitiveness in the global arena. Buy American is not about limiting purchases to only US-made goods but rather, buying such products based on their quality and all-around value. America still produces some of the highest quality products in the world in a number of industries and many of those manufacturers are in Illinois.
Industrial Website Helps Illinois Manufacturers do Business with European Countries
MillerCoors to Bring 300-400 Jobs to Chicago
Chicago won a major battle to win the corporate headquarters for the newly joined MillerCoors. Landing MillerCoors will add 300-400 jobs; which some economic development experts say is a tiny number for an economy as large as Chicago’s. However, it’s still a significant victory for a city that values its identity as a business crossroads yet has witnessed an exodus of famous names over the past decade through corporate restructurings, among them Amoco, Ameritech and First Chicago. The city was also able to woo Boeing from Seattle and United Airlines from the suburbs.
However, landing MillerCoors comes at a price of over $20 million in state and city subsidies, raising an oft-asked question in economic development circles: Would it have come here anyway, even without an aid package? The state is also offering a business development grant as well as aid in the form of tax incremental financing, or TIF district. The city has given similar TIF subsidies to other corporate relocations but has been criticized because TIFs were set up to fix blighted areas. The state justified the incentives saying such deals create economic development and the city and state package definitely made an impact. Chicago is what some experts call a “winner” city, a place with a healthy, diversified economy and cultural and recreational amenities to attract highly skilled workers. A spokesperson from the company said that while incentives did play a role in attracting MillerCoors to Chicago, the decision was largely based on the cit being a center for the marketing industry, a hub of international travel and an area with a large pool of talent.
After Miller and Coors joined together in July, they decided to locate to a new site. Coors was based in Denver and Miller in Milwaukee. The decision came down to Chicago and suburban Dallas. The venture will move 150 to 175 jobs to Chicago from each of its two headquarter cities.
HQ Decision: MillerCoors Incentives Top $23M
Beer Tab Too High for Jobs? MillerCoors Gets $20 Million in Aid to Bring 300-400 Jobs to Chicago
July Edition 2008
Recession? What recession?
Industrial Distribution’s Big 50 distributorships took various paths to increased sales in ’07 and with the exception of the construction market; most said the economic downturn hasn’t severely affected their businesses. Steve Cloud of IBT states that they aren’t seeing the softness everyone keeps talking about. Jim Timble of Bearing Headquarters says that the recession talk is election-oriented if anything and that the downturn won’t affect the industrial sector. Many other executives described 2007 and the start of 2008 as a “solid year” and “very satisfied”. Coo of FCx Performance Russ Frazee says that “business is there, you’ve just got to go get it. The businesses we serve are up and down every year, but if you pay attention and you know where the business is growing, then you can focus your efforts on those areas.” Ron Mager of Machinery Systems states that any manufacturing that isn’t housing or automotive isn’t in a recession. The weak dollar is driving exports and certain segments of the industry are solid.
Those in the construction market view things differently. Big 50 companies such as HD Supply, Wolseley, Carlson Holdings and WinWholesome are hoping for a turnaround. Many saw substantial layoffs, a drop-off in sales expectations and a sharp decline in homebuilding. Many of these caused by the sub-prime mortgage mess, tight credit market and overbuilding of housing units. Wolseley expects conditions to become even more challenging with more “rigorous cost management” strategies. Meaning: more layoffs. The U.S. housing market is likely to continue to deteriorate with the commercial and industrial market to remain stable for a few more months but then softening.
Many Big 50 companies are relying on expanding internationally while other acquired competitors, opened branches, expanded geographically or added product lines. Edgen Murray has seen its company go from being North American-based four years ago to 60% North American, 40% international. Others have used the increase in technology, mainly the internet. Several have planned online stores. Those that have enhanced their Web site and link to vendors so that customers can get all the information needed tomake a purchase claim it has helped their bottom line.
Transforming Inner-City Kids into Tomorrow’s Workforce
After going to the Chicago public schools for help in reviving manufacturing, Dan Swinney left with a different idea: design a new high school to train the workers to help in the revival. Mr. Swinney opened Austin Polytechnical Academy last fall with the hope of a turnaround in manufacturing. Swinney states that American manufacturing is adapting to globalization by shifting to higher-value products. With baby boomers retiring, the education system isn’t giving manufacturers the workers they need to take over highly skilled jobs. Training poor students to fill these positions can “address deep social problems,” while giving industry the work force it needs. Swinney had previously setup the Center for Labor and Community Research in 1982 to study why manufacturing jobs were in decline. One study showed that Chicago-area manufacturers have 10,500 openings each year with the schools providing only 5,000 people qualified to fill them.
Many inner-city school systems throughout the country are experimenting with smaller, more specificically-oriented schools. Much of these schools are funded by private groups such as the Bill and Melinda Gates Foundation. The goal of these schools is to create a variety of attractive options for students and let them choose what works best for them. The Polytech students take double periods of math and English to help bring students up to their appropriate grade-level skills as well as heavy doses of science and computer training. Students complete four years of pre-engineering and can be certified in metalworking skills and complete internships.
Transforming Inner-City Schools to Train Tomorrow’s Workforce
New Multi-Million Dollar Siemens Plant for Wind Turbine Industry
Siemens Energy & Automation, Inc. announced that due to the increasing demands for alternative and renewable energy sources, that it would be investing more than $20 million to develop a second plant in Elgin for its Drives Technologies business. Siemens is the largest producer of wind turbine gear drives in the U.S. and the expansion will increase production, enabling the company to meet the expectations of its customers. Siemens designs and manufacturers mechanical gear drives for the wind industry as well as for the cement, coal and minerals, and oil and gas industries. The new plant is expected to be completed by March 2009 and will create approximately 300 new jobs in production and 55 new office jobs over the next 3-4 years. The plant in Elgin currently employs 150 people.
The State of Illinois and the City of Elgin provided numerous incentives to Siemens to help secure the investment; including a Wind Energy Development Grant and Employer Training Investment Program job training funds. Siemens is investing more than $20 in building infrastructure to support the new plant for production as well as the cost of a 15-year lease for the new site. The new plant will be used for the assembly and testing of mechanical gear drives. The existing plant will be maintained by Siemens to manufacture the gears and components that will be assembled and tested in the new plant. It will also house the services and repairs business. Siemens companies employ approximately 7,000 people in 40 locations throughout Illinois.
June Edition 2008
Two Manufacturing Facilities Break Ground in Southwestern Illinois
Officials from U.S. Steel and SunCoke Energy broke ground on the companies’ new manufacturing facilities in Granite City earlier this month. These new facilities will leverage millions in private investment from the state’s investment that will create 70 new jobs and the retention of 2,200 jobs throughout the region. The investment is part of Opportunity Returns, the state’s economic development strategy to create jobs and build the economy in Illinois.
SunCoke Energy will build a heat recovery coke manufacturing facility closely related to U.S. Steel’s steelmaking facility in Granite City. The new coke plant includes 120 heat recovery ovens capable of producing approximately 650,000 tons of screened blast furnace coke per year to be sold to U.S. Steel under a 15-year contract. Senator William Haine from Alton stated that with increasing competition, it’s more important than ever to be able to make smart investments to ensure businesses can succeed in the global market, which translates into opportunities for more jobs and greater economic development locally. The expansion is evidence that southwestern Illinois has the infrastructure, financial capital, human capital and state-level support to help companies succeed stated Rep. Jay Hoffman.
U.S. Steel Corp. manufactures a wide range of value-added steel sheet and tubular products for the automotive, appliance, container, industrial machinery, construction, and oil and gas industries. SunCoke furnishes metallurgical coke to integrated steelmakers that use blast furnace technology. SunCoke also posses the only proven, clean heat recovery technology in the world that conforms to the U.S. EPA’s “maximum Achievable Control Technology” emissions standard and offers steam or electric power as an emission-free byproduct.
The Department of Commerce and Economic Opportunity is administering the business investment package, which includes Economic Development for a Growing Economy corporate income tax credits over the next 10 years, based on job creation, and Employer Training Investment Program job training funds that will help enhance the skills of the work force. The companies will also benefit from being located in an Illinois enterprise zone and will receive state and local tax incentives, regulatory relief, and improved governmental services.
Spokespeople for Opportunity Returns states that the program is about tangible, specific actions to make each region more accessible, more marketable, more entrepreneurial and more attractive to businesses. It is about upgrading the skills of the local work force, increasing access to capital, opening new markets, improving infrastructure, and creating and retaining jobs.
“Two Manufacturing Facilities Break Ground in Southwest Illinois”
More Manufacturing Weakness
Federal reports reveal industrial production fell in April, matching the largest decline since the one following Hurricane Katrina. The previous month production decreased 0.7% from February, much bigger than the 0.3% economists expected. The drop matched a 0.7% drop in February as the biggest decline since September 2005. Excluding the period following those storms, the 1.2% drop in industrial production over the past 3 months is the largest since the recession of 2001. Gus Faucher, director of macroeconomics at Moody’s Economy.com believes the economy has been in recession since the end of 2007 and that it appears the problems are consistent throughout manufacturing. Half of the manufacturing output loss that fell 0.8% in April is due to an 8.2% drop in the sale of motor vehicles and parts. Excluding motor vehicles and parts, manufacturing production fell 0.4% after having increased 0.3% in March.
Capacity utilization for all industries, a measure of operating rates for the nation’s factories also decreased more than expect to 79.7%-the lowest since September 2005-from a revised 80.4% in March. Economists expect utilization to slip to 80.2%. If capacity utilization is near 80%, the nation’s factories are only operating at full capacity for four days out of every five. Industrial production is one of the four factors that the National Bureau of Economic Research considers to determine if the nation’s economy has fallen into a recession. The other three factors are employment, personal income and retail and wholesale sales of manufactured goods.
CNNMoney- New Manufacturing Weakness, Fed Report Says
U.S. No. 1 in Competitiveness
The United States topped world competitiveness ranking for the 15th straight year, but its economy is showing the same signs of weakness that sank booming Japan in the early 1990s. The report was based on 2007 data that does not fully reflect all of the problems in U.S. financial markets. Other nations are catching up quickly but the U.S. economy is showing lots of resilience. The study lists 55 economies according to 331 criteria that measure how the nations create and maintain conditions favorable to businesses. The U.S. has the world’s strongest domestic economy which tops all others in its amount of investments, stock purchases and commercial service exports. We also rank as the easiest place to secure venture capital for business development and dominate all other economies in key technology criteria such as computers in use.
The 2008 report reveals parallels between now and two decades ago the business school first started to study competitiveness and Japan’s competitiveness seemed unassailable with a strong domination in economic dynamism, industrial efficiency and innovation. In 1989, the stock market went into reverse, land prices collapsed in 1992, credit cooperatives and regional banks came under attack in 1994, large banks teetered on the edge of bankruptcy in 1997, and a major credit crunch occurred in 1998. Speculation is that the U.S. could be headed for Japan’s same fate. With all these similarities, however, there are important differences between the Japan that stagnated for nearly a decade and the U.S. economy teetering on the brink of a recession now. Japan’s decision-makers were bureaucrats or politicians who reacted too slowly. The U.S. administration, however, is full of business and financial experts that know when things need to be shaken up.
CNNMoney- U.S. Still World’s Most Competitive Economy
May Edition 2008
Fear of Recession Causes Employers to Make Drastic Job Cuts
March saw the largest increase in job cuts in five years top out at 80,000; 30,000 more than anticipated for the third straight month of losses. January and February added to this with 76,000 job cuts each month. Unemployment rates also rose from 4.8 % to 5.1%; indicating that a recession might already be occurring. The Labor Department states that a “trio of crises” – housing, credit and financial sectors has inflicted companies and jobseekers as well as the economy as a whole. The Federal Government has already taken drastic steps in aid such as cutting interest rates several times, providing financial backing to JP Morgan’s takeover of Bear Stearns and opening an emergency lending program for big investment houses.
Construction, manufacturing, retailing, financial services and business services all racked up job losses. These losses tend to overshadow the gains in education, healthcare, leisure and hospitality. With the economy the way it is, business are having to curb spending, capital investment and hiring which lead to further weakening of the economy.
Institute of Government and Public Affairs’ Illinois Economic Review
Manufacturing Hits Keep Coming
The slow economy continues to take its toll on manufacturing. Rising oil and gas prices are hitting manufacturers where it hurts. The weakness in orders was led by a 4.6% drop in orders for autos due to the soaring gasoline prices and the weakening economy. The Institute of Supply Management released a report that the national Production Manufacturing Index was at 48.6, slightly above expectations. The report is based on a number of indicators including new orders, inventory levels, production, supplier deliveries and the employment environment. And index measurement above 50 shows growth, while anything below 50 indicates contraction. February had a reading of 48.3 which was the lowest in 5 years since the index fell to 46.1 in April 2003. The slowdown is mostly due to a decrease in imports and new orders and an increase in prices. The high prices of steel and fuel are having a direct effect on many manufacturers.
Orders to factories for large manufactured goods also fell for a third straight month in March, the longest string of declines since the 2001recession. The Commerce Department states that the demand for durable goods dropped by 0.3% last month. Orders haven’t fallen for three consecutive months since February to April of 2001 when the country was sliding into the last recession. Construction spending also dropped 0.3% in February as home building dropped for a record 24th straight month. Total construction spending dropped to $1.12 trillion in February. For more information, click on the following stories:
Manufacturing Hit Below the Belt, Again
Manufacturing Activity Declines in March
Many States Including Illinois Appear in Recession
Whether or not the national economy is in recession is beside the point for many states claims a report by the National Conference of State Legislatures. States such as Illinois, California and Florida are experiencing a weakened economy this fiscal year. Discretionary incomes are being consumed by higher fuel and food costs and the slumping housing market means less money going to furniture and appliances associated with buying a house. Illinois is facing an estimated $750 million shortfall in its budget this fiscal year. The administration has already suspended scheduled state payment for agricultural, environmental and other obligations.
By mid-April, 16 states reported shortfalls in their current budgets as the revenue those budgets were built on fell short of estimates. Next year’s fiscal year looks to be even worse with 23 states reporting budget shortfalls totaling $26 billion.
Many States Appear to be in Recession
Illinois Chamber Survey for Illinois Manufacturers
The Illinois Chamber's Economic Development Council’s Manufacturing Committee has developed the following survey for Illinois manufacturers. Through meetings, public input, and research, Manufacturing Committee members have identified a potential need to make young people aware of career opportunities in manufacturing. Unfortunately, outdated images and misunderstandings about modern manufacturing have cause young people to seek non-manufacturing careers. To make matters more difficult, these decisions are being made at a time when manufacturers need an educated and skilled workforce.
We believe that the Illinois Chamber of Commerce can play an important role in sending out a positive and correct message about the opportunities that exist within modern manufacturing by developing a program which links real needs with individuals interested in pursuing careers in manufacturing.
Your input is extremely important to the Illinois Chamber of Commerce and its members. We value your privacy and assure that all responses are kept confidential and used for informational purposes only.
Taking this survey is quick and easy. We appreciate your time and thank you for the feedback! Please click the link below to start the survey. Click here to take survey.
U.S. Department of Commerce to Hold National Summit on Economy in Chicago
The 2008 National Summit on American Competitiveness will convene the nation's premier leaders of business, government and academia on what steps the public and private sectors can take to secure America's position as the most competitive economy in the 21st century and beyond. For more details, click here.
April Edition 2008
Public Hearing Desired for Minnesota Bridge Collapse
The National Transportation Safety Board recently voted not to hold an interim public hearing into last year’s deadly bridge collapse in Minnesota. House Transportation Committee chair Representative Jim Oberstar and two other Minnesota Democrats are asking them to reconsider. The NTSB has stated that too-thin steel gusset plates and construction projects weights were factors in the Aug. 1 bridge collapse and recently updated their report that 191 tons of construction material had been piled over the weakest areas. Congressman Oberstar and NTSB chairman Mark Rosenker have frequently argued over the matter. The congressman criticized Rosenker for releasing statements that the undersizing of the design of the connector joining bridge beams was a “critical factor”. Oberstar felt those comments were inappropriate since the investigation was ongoing.
Last month, the state Senate removed the state’s transportation commissioner out of office over discontent of her leadership before and after the collapse. Many believe this also came to symbolize Minnesota’s aging and chronically underfunded infrastructure. NTSB vice chairman joined with other members of the board to state that a public hearing “would be counterproductive to the timely investigative process. Time is of the essence.” The three Democratic representatives feel that a hearing could educate the public on how investigations of these events occur. An NTSB spokesman stated that the board doesn’t hold public hearings on most major accidents.
“Minnesota Congressman Calls for a Public Hearing on Bridge Collapse”
Industrial Production Falls by Largest Amount in Four Months
Adding to what many believe as an inevitable recession, industrial output fell in February by the largest amount in four months. Output at the nation’s factories, mines and utilities dropped by 0.5% in February. The weakness stems from a 0.2% drop in manufacturing output and a 3.7% drop in output at utilities due to warmer temps in February. However, output in mining was up 0.4% after a 1.3% drop in January.
Caterpillar Expects Boost in Sales, Revenues from Emerging Markets
Caterpillar is close to surpassing its multiyear plan to achieve annual sales of $50 billion by 2010 with projected sales and revenue approaching $60 billion by 2010. In 2007 alone, revenue sales were $45 billion. Chairman and CEO Jim Owens stated that CAT’s offshore market remain strong amid the decline of the U.S. economy citing their need to invest in infrastructure and the capacity to do that.
March Edition 2008
Great Lakes Region Sees More People Leaving
United Van Lines’ annual “Migration” study shows that movement out of the Great Lakes region increased in 2007 while the South and West showed an increase in inbound migration. The study tracks trend in where their customers moved from and the most popular destinations in the last 12 months. Illinois ranks as one of the highest in outbound migration.
For the full study, please click here.
Airline Merger Could Spell Bad News for Chicago
With the possibility of a merger between Chicago’s United Airlines and Continental Airlines in Houston, many questions have been raised as to how this merger would affect Chicago. Some wonder if Chicago could lose its corporate headquarters while others ask about a union deal which is proving to be a major hurdle in the merger process.
To read the full story from the Sun-Times, click here.
UAL, Continental May be near Deal
U.S. Department of Commerce to Hold National Summit on Economy
The 2008 National Summit on American Competitiveness will convene the nation's premier leader of business, government and academia on what steps the public and private sectors can take to secure America's position as the most competitive economy in the 21st century and beyond. For more details, click here.
February Edition 2008
Many Believe Recession is Imminent
More than three in four Americans believe that the U.S. economy is in the midst of a recession, or will be sometime in 2008 according to a poll conducted by Fortune Magazine. To make matters worse, almost half of those surveyed say they’ve cut down on their spending compared to last year. Many economists believe that consumers spending less will create an even larger recession. Rich Yamarone from Argus Research states that consumers who are only worried about a recession decrease their spending, then it becomes a self-fulfilling prophecy. Fortune also indicates that their seeing from their CEO surveys that confidence levels are low and that can cause people to postpone either hiring or business spending. Almost half of those polled believe that their personal economic condition is worse than it was a year ago.
With the presidential election in full swing, the issue of the economy is split among partisan lines. Among those surveyed, the economy was the most important issue in the upcoming elections with the war in Iraq coming in second. Poor housing and credit markets seem to be a factor that is most responsible for the nation on the brink of a recession. Another factor given by those polled was the high price of gasoline. Fifty percent also said that companies sending work overseas is the driving force behind the economic crisis.
Click here for the full story from CNN.
To view the results from poll by Fortune Magazine, click here.
O’Hare Flight Caps to be Lifted by November
After three years of flight caps at O’Hare airport that have limited the airport’s growth, the federal rule limiting the number of flights will expire on October 31 of this year. The caps will be lifted roughly three weeks before the opening of the new north runway. The caps were put into place by the Federal Aviation Administration (FAA) in 2004 to reduce delays. Of the nation’s busiest airports, O’Hare ranked last for on-time departures and 28th for on-time arrivals. The FAA decreased the number of arrivals per hour from as many as 120 to 88 per hour. Mayor Daley has indicated that the longer the caps remain and landing fees are constrained, the more difficult it would become to finance an O’Hare expansion project already $400 million over budget. Regional Administrator of the FAA’s Great Lakes Region recently announced that O’Hare would be receiving a $42.3 million federal grant to help finance the soon-to-be-completed North Air Traffic Control Tower.
Click here to read the Sun Times full article.
Manufacturing Tax Break Expansion
Two Illinois lawmakers are taking steps to expand the tax break for U.S.-based manufacturing that Boeing and Caterpillar won a few years ago. Rep. Manzullo and Rep. Lipinski are co-sponsoring legislation to speed up the scheduled increase in an income tax deduction for domestic manufacturers. The current deduction is set at 6% and is set to increase to 9% by 2010. The proposed legislation would increase it to 9% immediately. Rep. Manzullo states that it “retains jobs because it reduced the cost of manufacturing; it creates jobs from expansion, and it may serve as an incentive to bring jobs back to the U.S.” To read the full Crain’s story, click here.
Chinese Automakers Looking to Break Into U.S. Market
Numerous Chinese manufacturers arrived at the Detroit Auto Show in hopes of entering the U.S. Market. Winning over skeptical American consumers, however, seems to be a challenge. Analyst Rebecca Lindland states that the quality of their automobiles has a long way to go and that Chinese automakers need a better understanding of our culture. One Chinese company plans to have sales in Mexico within three months and in the U.S. by the fourth quarter. One problem is that many of their vehicles still haven’t met up to U.S. quality demands and safety regulations. With the numerous recalls on pet foods and toys from China, Americans are more skeptical of where their products come from. One problem the manufacturers seem to be having is supplying our desire for “loaded vehicles” as well as meeting safety and emissions regulations. With the U.S. market twice as big as China with a 10-year low point in sales last year; Chinese manufacturers will soon be attempting to make their mark in the U.S. auto world.
January Edition 2008
New Laws in 2008
EDC/Infrastructure/Business-related (regulatory):
HB 226 Disability Calling Devices- requires gas stations that offer fuel for sale only at self-service islands to provide at one or more islands a calling device that allows disabled persons to communicate with the station attendant (P.A. 95-183).
HB 369 Gift Card Fees- bans the charging of inactivity or service fees on gift cards for up to 5 years after the card has been issued (P.A. 95-0525).
HB 1241 Small Business Loans- doubles the State’s maximum amount for small business loans to minority, female, or disabled individuals (P.A. 95-0097).
HB 1313 Ethanol Research Center- provides that the Illinois Ethanol Research Advisory Board shall establish and operate the National Corn-to-Ethanol Research Center at Southern Illinois University- Edwardsville as a State Biorefining Center of Excellence (P.A. 95-0099).
HB 1657 Motor Vehicle Fees- amends the Motor Vehicle Retail Installment Sales Act to increase the base documentary fee from $40 to $150 (P.A. 95-0280).
HB 1855 Substance Abuse Prevention- creates the Substance Abuse Prevention on Public Works Projects Act to prohibit an employee of a unionized public works project from being under the influence of a controlled substance. The new law also mandates substance abuse programs as part of the collective bargaining agreement (P.A. 95-635).
HB 2786 Life Insurance Discrimination- prohibits life insurance companies from making a distinction or otherwise discriminating between persons, reject an applicant, cancel a policy, or demand a higher rate of premium for reasons based solely upon an applicant’s or insured’s past lawful travel experience or future lawful travel plans (P.A. 95-163).
SB 4 Stem Cell Research- formerly establishes the Illinois Regenerative Medicine Institute under the Department of Public Health to award State grants to research entities and institutions for the advancement of stem cell research and other biomedical research (P.A. 95-0519).
SB 137 Soliciting Electronic Information- prohibits any individual, by means of a Web page, e-mail message, or otherwise through use of the Internet, to solicit, request, or take any action to induce another person to provide identifying information by representing oneself to be a business without the authority of approval of the business (P.A. 95-0350).
SB 263 Airport Authorities- creates two new airport authorities in Peoria and Crawford County that supersede the existing airport authorities operating in these two regions (P.A. 95-365).
SB 382 Building Standards- provides that the corporate authorities in each municipality may establish local standards solely for the review of the exterior design of buildings and structures, excluding utility facilities and outdoor off-premises advertising signs (P.A. 95-0475).
SB 730 Sprinkler System Mandates- provides that all automatically operated lawn sprinkler systems shall have furnished and installed technology that inhibits or interrupts operation of the system during periods of sufficient moisture or rainfall (golf courses and agricultural lands are exempted- provisions will be enforced January 1, 2009 (P.A. 95-0421).
SB 1162 Motor Vehicle Dealers Payment Mandates- requires motor vehicle dealers to pay the party that holds the lien on a car traded-in to a dealer within 21 days of the vehicle trade-in (P.A. 95-393).
SB 1508 Building Codes- provides that once a building permit is issued, the applicable building codes of any unit of local government that are in effect at the time of the issuance of the permit shall be the only building codes for the duration of the building permit (P.A. 95-0512).
SB 1704 FutureGen Plant- streamlines the permitting process for a FutureGen plant, exempts the project from any potential generation tax, and includes statutory authority to offer clean coal grants and tax exemptions to FutureGen. The bill became law June 30, 2007, but pending award of the new plant to Illinois would make these provisions applicable as construction gets under way in 2008 (P.A. 95-0018).
Laws effective June 1st 2008:
HB 429 Wine Shipment- establishes provisions governing the direct shipment of wine to consumers from both in-state and out-of-state wineries (P.A. 95-634).
HB 3490 Construction Contracts- authorizes a Public Building Commission to solicit and award design-build construction contracts for public work.
Surrounding States Join in Support for Illinois FutureGen Site
FutureGen may be revolutionary in its ability to provide the world’s cleanest-burning coal, but it also translates into an economic landmine for Illinois. Illinois is currently in the running with Texas to land the new coal plant that would generate at least 1,300 jobs during its four-year construction. Indiana, Kentucky, Pennsylvania, Wisconsin, and most recently, Ohio have all signed on in support of Illinois being awarded the $1.5 billion coal plant. The FutureGen Alliance is expected to announce its final selection by the end of the year. If Illinois is selected, the project could pave the way for future investments in clean energy technology.
To read more about the support for FutureGen, please click on the following links:
“Ohio joins four others in support of Illinois for FutureGen”
“OUR VIEW: Illinois sites clear another hurdle in FutureGen race”
Business Closure Sparks Entrepreneurial Opportunities in the Biotech Industry
The Chicago Tribune recently profiled former employees of G.D. Searle & Company in Skokie who lost their jobs after Pfizer, Inc. decided to shutter the facility in 2003. Most of the 1,500 jobs belonged to scientists who were forced to make difficult decisions. While some left the Chicago-area to pursue job opportunities with other major pharmaceutical corporations, others pursued entrepreneurial visions that have ultimately carved out unique niches in the world of small-business biotech.
One such company, Midwest BioResearch LLC, has found a home in Searle’s former property, which now serves as the site for the Illinois Science and Technology Park in Skokie. The company performs lab tests on proteins and compounds that are candidates to become drugs for other companies, ranging from smaller biotech outfits to major drug companies. The specialized work of Midwest BioResearch LLC saves other these other companies both time and money.
Midwest BioResearch LLC, however, also represents a trend in the major pharmaceutical and biotech industry. As large, multi-million corporations, like Pfizer, undergo corporate structure changes, scientists and other highly specialized employees that are left behind are beginning to put their entrepreneurial skills to use in a smaller, more specialized way.
Tough Job Market Even Tougher for Veterans
Veterans returning from Iraq and Afghanistan are returning to find settling back into the U.S. job market is not an easy task. Some fear that the unemployment trends among veterans could track that of Vietnam, where veteran unemployment figures pushed 20% and generated thousands of homeless vets. While current unemployment figures are about half of that, increasing pressure to withdraw troops from the Middle East is generating concern that unemployment among veterans could only worsen.
The slowing U.S. economy has made the job market a tougher market than it was a couple of years ago. Even at that, veterans returning with physical and mental wounds face an even more limited pool of job opportunities; however, veterans that have escaped these scars of war are also finding the skills they gained from their service experience is not translating into private sector jobs. Some argue that fewer business executives have service experience and are therefore less sensitive to the skills veterans possess. Others argue that the armed services themselves are not providing enough job skill matching and transition services.
To read more about the struggles many veterans are facing in the job market, please click on the following story:
“Vets returning to an unwelcoming job market”
Troubling Outlook for Illinois’ Employment Rate
The Illinois Commission on Government Forecasting and Accountability (CGFA) released its latest monthly assessment of the Illinois economy in late September which holds some troubling news for Illinois. In addition to the report solidifying the findings of a report released by State Comptroller Dan Hynes showing the State’s revenue receipts for early 2008 have drastically deteriorated, CGFA reports that the State’s employment situation has also experienced a similar deterioration.
Citing a U.S. Department of Labor report released in August, the Commission reports that nine states registered “significant” unemployment rate increases, the largest of which occurred in Illinois, with the unemployment rate rising a full percentage point higher than that of August 2006. This figure goes against the national trend, which shows a tenth of a percent decline in the unemployment rate during that same time. The Commission’s report states that this trend in unemployment for Illinois, if allowed to continue, would translate into even worse news for the State’s revenue forecast.
On a more positive note, the report does note that high commodity prices for agricultural products, including expanded use of ethanol, bode well for Illinois’ farmers, as well as manufacturers of farm equipment in Illinois. Illinois also continues to prove a force in the exporting sector, ranking 5th among the states in overall exports. Another report released by the National Association of Purchasing Management indicated similar findings, showing that business activity in the Midwest expanded in September at a slightly faster pace than initially expected.
To read the Commission’s full report on the state of Illinois’ economy, please click here.
The Commission also released last month a Comparative Study of Illinois Economy based on its own regional analysis of Illinois and other surrounding states, including Indiana, Iowa, Kentucky, Michigan, Missouri, Ohio, and Wisconsin. To access the full report, please click here.
Report Finds Illinois Lagging Rest of Midwest in Biotech Investment
A report released by the BioEnterprise Initiative of Cleveland shows that despite the number of resources Illinois has in terms of research institutions, the state is lagging behind other Midwestern states in the amount of biotech investment it attracts. The report shows that Illinois currently ranks 6th among Midwest states in the amount of investment it has made for 2007. Illinois beat out all Midwestern states last year, investing over $100 million in the biotech industry.
Dr. William O’Neill, a professor of bioengineering at the University of Illinois at Chicago, examines these findings and offers up his ideas on why Illinois is missing out on these investment opportunities.
To view a summary of the report findings, please click here.
Is the Ethanol Boom Over for Illinois?
Despite the Commission on Government Forecasting and Accountability’s report showing that the use of ethanol has grown in Illinois, construction of new ethanol plants has stalled in the state. Illinois has issued 38 permits for new plants since 2006, but only five of those plants are actually under construction. While the construction of a new ethanol plant translates into new jobs and an economic boost to smaller farming communities, the increasing cost of construction has made completion of new plants extremely difficult. Investment has also slowed due to fears that rising construction costs will make it impossible for investors to see any profitable return on their investment in the near future.
To read more about the slowing ethanol boom, please click on the following link:
“Ethanol Construction Slows as Glut Looms”
UAW Deal Illustrates Growing Challenge for Business and Labor
An article recently published in the Christian Science Monitor examines the GM-UAW labor agreement and how it represents the increasing pressure on business to produce innovate approaches to dealing with escalating costs, such as health care, while still remaining viable in a widening global marketplace. To view the full article, please click here.
Report Shows Illinois Job Loss at Highest in Two Years
The Illinois Coalition for Jobs, Growth and Prosperity’s monthly Jobs Index MSA Report released on September 2 shows that Illinois has lost more jobs in July than any other month over the past two years. The report, which contains data compiled by the University of Illinois’ Regional Economics Application Laboratory, indicates that Illinois and the rest of the Midwest failed to mimic national trends in the month of July. The nation as a whole added approximately 92,000 jobs while the Midwest lost nearly 24,000 jobs in that same period. Illinois lost approximately 11,500 between June and July. Those sectors in the state that suffered the most were government and trade, transportation and utilities, while the manufacturing and leisure and hospitality industries managed to enjoy job growth during that time frame.
The full MSA report, which provides a localized picture of Illinois job trends, may be viewed here.
Study Shows Midwest May Have Edge in Investing in Biotechnology
Michael Rosen, a founder and board member for the Illinois Biotechnology Industry Organization, reviews a study recently published in Genetic Engineering News that examines the cost of doing business for a biotech firm in different regions across the U.S. and Canada.
Recession on the Horizon?
Although the nation as a whole enjoyed job growth over the month of July, that trend did not continue on into August, with job figures released on September 7 showing that the nation fared far worse than anyone had anticipated during the previous month. The latest figures show that job loss totaled approximately 4,000; the first loss in jobs at the national level since August 2003. That report, coupled with fallout from the national credit crunch, a downturn in the housing market, and escalating oil and gas prices has many economists speculating that if trends continue, the nation could be heading towards a recession.
The following articles offer some thoughts and perspectives on the fate of the U.S. economy, including former Federal Reserve Chairman Alan Greenspan’s thoughts on the situation:
Internal Revenue Service (IRS) and U.S. Department of Housing and Urban Development (HUD) to Host Webcast on Business-Friendly Tax Incentives
The IRS and HUD are hosting a webcast on October 11 from 1-3 pm (CST) that will provide an overview of tax incentives for Renewal Communities (RCs) and Empowerment Zones (EZs), as well as updates on changes to these incentives. A panel of IRS experts will address employment credits, work opportunity tax credits (WOTC), commercial revitalization deductions (CRD), increased Section 179 deductions, and other incentives that can help foster business growth.