Illinois economy shrinks 4% in 2020 despite 4th quarter growth
By PETER HANCOCK
Capitol News Illinois
phancock@capitolnewsillinois.com
SPRINGFIELD – The Illinois economy shrank by 4 percent in 2020 as the COVID-19 pandemic wreaked havoc on many of its sectors, although there were signs of a recovery taking place late in the year.
Those preliminary numbers, released last week by the U.S. Department of Labor’s Bureau of Economic Analysis, showed that the leisure, hospitality and food service sector was the hardest hit by the pandemic, reporting a nearly 30 percent drop in economic output for the year.
That was due to the forced closure of bars, restaurants, theaters, amusement parks and most tourist attractions in the early phases of the pandemic, as well as the cancellation of large conventions and business meetings.
“You look at the various industries, many of which got impacted by COVID, but I don’t think any industry was impacted as much as hotels and tourism,” Michael Jacobson, executive director of the Illinois Hotel and Lodging Association, said during an interview. “We saw the impacts begin before some people even realized what COVID was because you started seeing conventions and large-scale meetings begin to cancel. And unfortunately, those same events that really are the lifeblood of our industry, are going to be some of the last events to begin back up again.”
According to BEA, real gross domestic product decreased in all 50 states and the District of Columbia in 2020. Utah, with a 0.1 percent shrinkage rate, fared the best, while Hawaii’s state economy shrank 8 percent. The average shrinkage rate for the U.S. as a whole was 3.5 percent.
Accommodation and food services were a contributing factor to the declines in all 50 states and D.C., and they were the leading contributor to the decreases in 38 states plus D.C.
Other industries that suffered in Illinois included transportation and warehousing, down 14 percent; nongovernment services, down 12.3 percent; manufacturing, down 7.3 percent; wholesale trade, down 5 percent; and retail trade, down 2.3 percent.
The one bright spot in the state’s economy was the agriculture sector, which grew by nearly 68 percent over the previous year. That was largely the result of a bad harvest year in 2019, followed by a good one in 2020.
When the numbers are broken out on a quarterly basis, however, the biggest drop in economic output occurred during the 2nd quarter, April-June, when Illinois was under the most severe economic restrictions. The economy began to pick up in the 3rd quarter, and by the 4th quarter was growing at an annualized rate of 3.5 percent.
But the recovery has not been even across all sectors, and the leisure and hospitality industries continue to suffer.
Jacobson says he does not expect the hotel industry to come back fully to pre-pandemic levels until sometime in 2024. The question for his industry, he said, is how many hotels will be able to survive financially until that time.
“I mean, you’ve seen some very notable hotel names across the state, the Palmer House being one of our largest hotels in the state, and obviously the most notable one that’s been foreclosed so far,” he said. “But if a hotel that size, owned by one of the large real estate investment companies can get foreclosed, imagine the little guys who own most of the hotels in our state, how bad they’re suffering.”
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
Local News
St. Laurence hoops teams top honor roll
Spread the loveBy Jeff Vorva Correspondent Area basketball teams proved to be strong on the court and in the classroom this season, and St. Laurence was the leader of the pack. The Illinois Basketball Coaches Association compiled a list of the top academic teams, and the area did well. In Division 3 girls, St. Laurence…
Chicago Bears recognize St. Rita senior with All-Star award
Spread the loveBy Jeff Vorva Correspondent Chances are good that few outside of St. Rita football circles know who David Lyle is. With good reason. Lyle missed his senior season for the Mustangs last fall after sustaining a serious knee injury. He even postponed having knee surgery so that he could take care of his…
Pols want 63rd St. armory for new police HQ
Spread the love. Porfirio, Guerrero-Cuellar push plan in Springfield . By Tim Hadac Any plans the Chicago Department of Aviation may have had for the vacant Army National Guard Midway Armory, 5400 W. 63rd St., may be grounded, at least for now. Several elected officials are eyeing the parcel as the headquarters of a new…
Her back against the wall, Stacy needs help
Spread the love. By Tim Hadac Editor Clear-Ridge Reporter & NewsHound (708)-496-0265 . Clearing and Garfield Ridge have earned a reputation as a place where people look out for each other—and that sometimes means caring for each other in times of need. Today, I want to talk about one such person, who sure could use…
It’s (pizza) party time at OLS
Spread the love. Third graders at Our Lady of the Snows School break into cheers as they learn they’ve won a pizza party for selling more raffle booklets than any other class. The recent Grand Raffle fundraiser brought in about $6,000. Parents looking for a grade school for their sons and daughters for 2024-25 are…
Dart wants free mental health care for first responders
Spread the love. From staff reports The Illinois Senate has passed legislation proposed by Cook County Sheriff Thomas J. Dart that eliminates out-of-pocket expenses for first responders seeking mental health treatment. “We ask first responders to be constantly exposed to traumatic and dangerous situations to protect us,” Dart said. “This legislation is a solid step…
Volunteers give Palos Heights a spring cleaning
Spread the loveBy Kelly White Palos Heights works hard to keep its city beautiful. Gathering residents together for a day of cleaning and fun was the Palos Heights Green Team with a Clean Up Day on April 13. “This event invited everyone in our community to do their part in combating pollution by having a…
Hunt man who tried to rob Chase Bank
Spread the love. FBI looking for tips from public . From staff reports FBI officials are appealing to the public for help in finding a man who attempted to rob a Southwest Side bank branch. The bandit tried to rob the Chase Bank branch at 5687 S. Archer (just west of Laramie) at about 11…
Casten lauds Biden for ‘clean energy’ move
Spread the love. From staff reports A move designed to spur the responsible development of clean energy on America’s public lands was recently lauded by U.S. Rep. Sean Casten (D-6th). The congressman, co-chairman of the House Sustainable Energy and Environment Coalition (SEEC) Clean Energy Deployment Task Force, joined by co-chairman Mike Levin (D-Calif.), released a…
Neighbors
Pickleball courts coming to Palos Park
Spread the loveBy Jeff Vorva There will finally be outdoor pickleball in Palos Park. In a process that went longer than anticipated, the Palos Park Village Council was able give the green light to get a pickleball project started on the Village Green. The council voted April 8 to award the contract to U.S. Tennis…
First Secure Bank to host American Eagle gold coin sale
Spread the loveFrom staff reports First Secure Bank & Trust of Palos Hills announced its annual May sale of 1-ounce and ¼-ounce American Eagle Gold Coins, produced by the U.S. Mint, will take place from 10 a.m.to noon on Saturdays, May 4, May 11, May 18 and May 25. The sale will take place at…
Donate teddy bears to our local police
Spread the love. Peggy Zabicki Your correspondent in West Lawn 3633 W. 60th Place • (773) 504-9327 . Have you ever seen the 1955 movie The Night of the Hunter? The children in this movie show such bravery and acceptance in what life has thrown at them. They have to deal with unimaginable events and sadness. …
Boy Scouts collecting tattered flags for disposal
Spread the love. By Mary Stanek Your correspondent in Archer Heights and West Elsdon 3808 W. 57th Place • (773) 517-7796 . Goodbye April, hello May. Our American Flag, the symbol of our country, should always be treated with respect. But after bearing Chicago’s brutal winters and hot blazing summers along with being in the…
Oak Lawn trustee says village needs state grocery tax
Spread the loveBy Joe Boyle An Oak Lawn trustee said that Gov. J.B. Pritzker’s proposal to eliminate the state’s grocery tax will be costly for the village. Trustee William “Bud” Stalker (5th), accompanied by Mayor Terry Vorderer, recently returned from a fact-finding trip to Springfield where they learned more about the governor’s proposal to eliminate…
Palos Heights recognizes volunteers
Spread the loveBy Nuha Abdessalam Palos Heights handed out awards last week recognizing the services provided by volunteers through the years. The proclamations, which were read aloud during the city council meeting April 16, were a testament to the city’s volunteers and were handed out as part of Volunteer Recognition Week. Volunteers were cited for…
Boys Volleyball | Richards weathering struggles after run of success
Spread the loveBy Xavier Sanchez Correspondent After a tough weekend at the Smack Attack tournament, Richards got back into the win column with a two-set victory over Eisenhower in a South Suburban Red match. The Bulldogs made quick work of the Cardinals, winning 25-16, 25-15 on April 23 in Oak Lawn to snap a five-match…
SD218 puts on annual Arts Extravaganza
Spread the loveBy Kelly White The arts have become a major portion of the curriculum Community High School District 218. Showcasing those many talents, the Friends of CHSD 218’s Education Foundation proudly hosted its 15th annual Arts Extravaganza on April 5 at Eisenhower High School in Blue Island. “The Arts Extravaganza is a great event…
Gaming licenses to be tougher to get in Orland Park
Spread the loveBy Jeff Vorva It’s going to take longer to receive gaming licenses in Orland Park. The village board passed an ordinance April 15 that would allow table service businesses open at least 36 consecutive months to apply rather than the previous 18 months, and extended the probationary period to 18 months instead of…