In the first quarter of 2022, Illinois annual GDP reached $1.0 trillion, according to the Bureau of Economic Analysis. This is 12% larger than Pennsylvania’s economy at $915 billion, a state that is nearly the same number of workers with a similar population, according to the Illinois Economic Policy Institute. As one of the most diversified economies in the country, only 13% of Illinois’ GDP comes from a single industry at the state level. Manufacturing, the state’s largest major industry, produces $132 billion in value per year, more than all the private and public sector economic activity in New Mexico. Real estate, which accounts for $120 billion in Illinois, is greater than the size of Idaho’s entire economy. And the healthcare industry in Illinois contributes more to the U.S. economy than all of South Dakota.
Chicago’s well-rounded industry diversity gives companies who locate here a leg up for a variety of reasons, in comparison to many other major metros where one or two major industries dominate. First, competition levels are healthy, resulting in strong companies and ideas surviving and thriving. Secondly, a diverse economy makes Chicago more recession-proof. In prior recessions, Chicago did not see the steep fallouts that some other single industry dependent metros encountered. However, the diverse economy also means that sometimes Chicago is slower to recover. Lastly, a variety of industries helps make Chicago an attractive place to the live, worldwide. Chicago offers jobs in almost any industry, meaning all people with all types of backgrounds can work and live here.
While Chicago has transformed over the past few decades into a knowledge hub, the city is primarily and globally known as a manufacturing hub, which is the highest contributing sector to the state’s GDP. The top areas of focus for manufacturing in Chicago are food, metals and plastics. Many manufacturing incubators established themselves within the city due to the vast innovation occurring in the industry. With nearly half a million people working in manufacturing, the talent pool in Chicago is deep. Warehouses and factories, which remained some of the busiest operations in the city throughout the pandemic are catching up on backlog now that demand has softened.
With its central location and position as a transportation hub, Chicago has embraced the ongoing development of its robust supply chain and logistics industry, which have become essential to support the high demand of on-line shopping in recent years. The growth of the logistics industry in Chicago can be seen in a variety of ways; an increase in trucks on the road, the massive warehouse facilities being built, the high-end offices opening up downtown and the educational institutions advertising new degrees in supply chain management.
Chicago has also positioned itself as a knowledge hub. Nearly 10% of the nation’s computer scientists come from Illinois annually and the city graduates more engineers than MIT, Stanford and Cal-Tech combined, according to World Business Chicago. A collection of insurance carriers, hospitals, specialty hospitals, nursing facilities and pharmaceutical companies in Chicago are contributing to the MedTech sector. Additionally, Chicago is home to over 40 medical and health associations, which has helped the MedTech industry take off.