URBANA – The Flash Index showed a strong improvement in Illinois’ economy over the past month, rising from February’s reading of 96.6 to 97.8 for March.
The increase comes after several months of steady but slower improvement, as the Illinois economy recovers from last year’s deep downtown caused by the COVID-19 shutdown.
University of Illinois economist J. Fred Giertz compiles the Flash Index for the university’s Institute of Government and Public Affairs. He says the coronavirus-linked downturn and the current recovery are interconnected, and that the recovery looks best in comparison to the plunge.
“Obviously the bad news is, we had this year-long crisis,” said Giertz. “But I don’t think ten or eleven months ago (we) would have predicted that we would rebound so strongly at this point.”
And Giertz says there are technical factors that make the Flash Index’s March reading especially strong. The Flash Index is determined by analyzing economic data from the past 12 months. And while Giertz maintains that the Illinois economy showed strong improvement in March, the state has now had 12 full months of an economy hit by COVID-19, providing inputs that helped produce an even stronger number.
The Flash Index had a reading of of 105.7 in February 2020, before the pandemic sent it falling below 100 in the months that followed. The Flash Index bottomed out at 92.8 in May 2020. Its numbers have been rising since then.
Giertz says there are two factors that are helping the economy recover from the impact of the pandemic.
“There’s been a lot of strong intervention on the part of the government, which at least has a short-run positive effect,” said Giertz. “But in addition to that, even though there’s a lot of controversy now, I think very, very few people have thought we would have a vaccination program going as strong as it is now.”
The Flash Index provides a quick snapshot of the state’s economy by looking at Illinois income, corporate and sales tax revenues. While those revenues have been stronger than what many expected a few months earlier, Giertz notes that the Flash Index still indicates a contracting economy, until it surpasses 100.