Quad Cities economic growth predicted to outpace national, regional growth

A new decade is almost here, and as we prepare for 2020, here are some key takeaways from the Quad Cities Chamber’s Economic Forecast event. Dr. Kenneth Kriz, Distinguished Professor of Public Administration at the University of Illinois, stressed there is a low chance of recession – only a 3-5% chance, and it is not time to panic.

Metro Gross Domestic Product (GDP) in the Quad Cities is expected to grow 2-2.5%, beating the national and regional prediction of 1-2% average growth. Although we are in slow growth mode, our market is expected to do better than the national average.

Earnings have grown more in the Quad Cities than they have nationally and regionally. However, local job growth may not increase to match local GDP growth. Diversifying our region’s industries will remain an ongoing priority.

Here are Dr. Kriz's bottom lines from the federal, regional and local perspective:

Federal

• We have been in a relatively weak expansion since 2008-09
• Slowdowns in 2013-14 and 2016
• Growth since 2016 at or near the 20-year trend growth rate
• There is some evidence of a slowdown lately, especially in manufacturing
• Labor market, retail sales and income growth have been good but showing signs of weakness
• Aggregate measures showing signs of slowing but small probability of imminent recession

Regional

• Similar story to national picture, trend output growth with some concern in near term
• Declining unemployment rate, increasing payroll employment and earnings point to strong labor market
• Strong gains in personal income since 2016 but also near-term concerns
• More volatility in the Iowa economy, which also is growing more slowly
• Indices point to moderate growth in the next year or so 

Local

• Output recession in 2013-2016 looks to be lessening
• Output and employment growth has been centered around Business and Professional Services; Fire, Insurance and Real Estate (output only); and Construction
• Labor markets show similar trends to the regional economy
• Personal income growth has been solid, but recent trends in average hourly earnings are a source of concern
• The structure of the local economy is a source of risk in the medium-to-long-term