Chicago Economic Forecast 2022: Slower Growth Due to COVID, Manufacturing Problems
Dubow’s worries are an allegory of cross-currents lashing an economy in recovery, but still disrupted by COVID, haunted by labor unrest, supply chain bottlenecks and consumers pessimistic but spendthrift. Inflation is at a four-decade high, workers are quitting in record numbers, and COVID introduces another wild card: the omicron variant.
Nonetheless, economists forecast greater growth in 2022—3.7% after gaining 5.6% in 2021, according to the Organization for Economic Co-operation and Development. A Federal Reserve Bank of Chicago survey of economists shows unemployment falls below 4% by the end of 2022 and inflation drops to 2.5% from 6.1% in the fourth quarter of 2021.
The numbers here won’t be so rosy due to the Chicago area’s relatively higher reliance on manufacturing, business travel, and convention attendance, among other factors.
“I have to tell you that our overall outlook for Chicago is not great, mainly because of the manufacturing sector,” says Barbara Byrne Denham, senior economist at Oxford Economics, which also lists retail and construction as areas that will not recover from before. -Pandemic levels by the end of 2022. Oxford forecasts metropolitan GDP to expand to 4.3%, below its forecast of 4.4% in the United States, due to stagnant population growth, problems of public finances and, in relation to the coasts, of a small technological sector. The city’s 5% net decline in the office sector is nearly double the U.S. average and is not expected to recover lost jobs until the end of 2023.
The University of Illinois Flash Index, an estimated weighted average of the growth rates of corporate profits, consumer spending and personal income, has changed little in recent months after returning to pre-market levels. pandemic.
“Chicago has a lot of downsides of the pandemic that still haunt it,” said Diane Swonk, chief economist for Grant Thornton.
Like much of the United States, Chicago is counting on a reboot in infrastructure spending, which could rival what it was during the New Deal in terms of its share of gross domestic product. Illinois is promised $ 17 billion or more in addition to the $ 45 billion state approved in 2019 for the Rebuild Illinois infrastructure program. But how much will it be by the end of 2022?