CHAMPAIGN, Ill. The University of Illinois Flash Economic Index fell in March to 96.3, its lowest reading in nearly 10 years.
The reading indicates that, despite the recent favorable news about the national economy, the Illinois economy apparently has not recovered from its yearlong slump. The Flash Index was at 97.0 in both January and February 2002.
A year ago in March, the reading was 99.7. Any reading below 100 indicates that the state economy is contracting, while any number above 100 means the economy is expanding.
The Flash results may reflect that the Illinois economy is undergoing a slower recovery than the national economy, which reported growth in the fourth quarter of 2001 and increases in industrial production and personal income.
The reading may also reflect the Flash Indexs dependence on Illinois tax receipts. These may be unduly impacted by corporate refunds and lower individual payments that reflect past, not current, economic activity. "Note that Illinois state fiscal problems characterized as the worst in 25 years are considerably more severe than might be expected from a modest economic downturn," said J. Fred Giertz, the UI economist who released the data today.
Corporate tax receipts were still the weakest component of the Index, although individual income tax and sales-tax receipts were also down in "real" (inflation-adjusted) terms from the same month last year.
The Flash Index is a weighted average of Illinois growth rates in corporate earnings, consumer spending and personal income. The growth rate for each component is calculated for the 12-month period using data through March 31.
