The Illinois economy has been contracting since the onset of COVID-19. But the latest University of Illinois Flash Index shows economic activity is beginning to recover.
The Flash Index rose from 93.1 in June to 93.9 in July, for its second month of improvement since the coronavirus sent it plummeting. The Flash Index is based on an analysis of state tax revenues.
University of Illinois economist Fred Giertz says the higher Flash Index number reflects a rise in sales tax revenue since spring.
“Sales tax revenues are up quite a bit compared to a couple of months ago,” said Giertz. “They’re still somewhat below last year. But the opening up of the economy has made a big difference on sales tax.”
Giertz says the month-to-month increase shows Illinois businesses have begun to reopen.
“The shutdown was really severe in March and April,” said Giertz, who compiles the Flash Index for the university’s Institute of Government and Public Affairs. “And now, there’s — not a fully open economy — but much more so. Things are actually improving, compared to the worst of the situation. But we still have a long ways to go, to get even back to a normal zero-growth situation.”
The Flash Index fell below 100 in March for the first time since 2012, and reached 92.8 in May, its lowest reading since 2010. Up until March, the index had hovered above 105 for more than a year, according to the Flash Index Archive.
But Giertz says the Flash Index has been showing a contracting Illinois economy since March, when the COVID-19 pandemic led to a shutdown of many businesses.
Giertz says he believes the path for the state’s economy will be slow and uncertain, until an effective vaccine is developed to control the coronavirus.