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Peoria area economy shows improvement

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Improvements in the central Illinois labor market fostered growth in the economic index for the Peoria-Pekin Metropolitan Statistical Area for the second consecutive quarter, according to Bradley University’s Center for Business and Economic Research.

The first quarter 2014 index reached 96.7, a 0.5 percent increase over the fourth quarter of 2013, the Bradley report said.

That coupled with improvements in most leading indicators monitored by the CBER “signal the potential for continued growth in the months ahead,” said the report from CBER Director Bernard Goitein.

The leading indicator improvements were in building permits, unemployment rate and new unemployment claims, the report said.

The Summary Index for the Peoria-Pekin MSA covers Peoria, Tazewell, Woodford, Stark and Marshall counties and is derived from activity in more than 30 diverse business indicators reviewed by the CBER. An index score of 100 was set to correspond to local business conditions in the first quarter of 2000, following the national economic expansion of the previous decade, the report said. The present national economic expansion began after the national recession of December 2007 to June 2009. “Impact of the national recession was evident locally in the Summary Index that reached its cyclical low of 93.2 in the fourth quarter of 2009,” it said.

The index has been compiled by CBER since 1991 and is funded by the Peoria Journal Star.

Local labor markets showed improvement with a 2.1 percent increase in the number of people working and a decrease in the unemployment rate from 9.8 percent to 9.1 percent. A 20.5 percent increase in help wanted advertising was another key factor in the report.  

Layoffs fell during the first quarter of 2014 by 43.8 percent from the previous quarter, reducing the rate of job losses 29.5 percent below the 121.6 of the year before, for a New Unemployment Claims Index score of 85.7, well below the 100 of the Index’s 2000 base year, the report said.

“With more people working and fewer people losing their jobs, the number of jobs on local employer payrolls was up 0.4 percent from that found during the fourth quarter of 2103. First quarter growth of 0.5 percent or more was found for the number of people on the payrolls of three of the six private sectors industries tracked by the CBER (Construction, Professional and Business Services, and Retail and Wholesale Trade), with little change for the remaining three industries tracked (Manufacturing, Health Care, and Hospitality/Entertainment),” the report said.

Employment in construction, manufacturing and professional and business services, industries that are particularly sensitive to business cycles, were up or roughly the same from the previous quarter. Employment in retail and wholesale trade and in hospitality/entertainment (the latter dominated by restaurants) showed improvement or were virtually unchanged, as well.

One negative area in the report was in home sales. The number of homes sold in the first quarter in the Peoria-Pekin MSA fell 15.4 percent from a year earlier.  A separate analysis showed the decline largely a result of a decline since the previous quarter, with first quarter sales falling to a greater extent than would be expected from normal seasonal variation. One reason was weather but another was a decline in the number of homes that went on the market.

Meanwhile, prices for homes sold during the first quarter rose 2 percent from the previous quarter, beyond what would be expected from normal seasonal variation, putting these prices 10 percent above year before. At the same time, first quarter increase in mortgage interest rates of 0.11 percentage points added to earlier increases, to put these rates 0.4 percentage points above the same time last year, the report said. 

 

About the Author
Paul Gordon is the editor of The Peorian after spending 29 years of indentured servitude at the Peoria Journal Star. He’s an award-winning writer, raconteur and song-and-dance man. He also went to a high school whose team name is the Alices (that’s Vincennes Lincoln High School in Indiana; you can look it up).