Challenges to DuPage economy not readily apparent, group says

Challenges to DuPage economy not readily apparent, group says

Challenges to the DuPage County economy are not readily apparent, according to Roger Hopkins, president and CEO of Choose DuPage, initially known as DuPage Biz.

“It takes a deeper probing into DuPage County’s complex economic activities to realize these challenges are slowly eroding the county’s economy:
• “High-wage employment sectors are trending flat or losing jobs;
• “The office and industrial real estate markets have shown a point of stagnation over the past several years with a negative absorption rate;
• “Retail and the service sector are driving employment while the county, in general, is experiencing a decline in its wealth-generating industries;
• “The poverty rate, while still low, is rising;
• “Income in DuPage County is not keeping pace with accelerating housing costs.”

However, Hopkins noted, there is also an opportunity to improve the situation because DuPage County is uniquely positioned to further develop a diverse economy because of its wealth of knowledge-based institutions; its two internationally renowned research sites in Argonne National Laboratory and Fermi National Accelerator Laboratory; its low commercial property taxes; its proximity to O’Hare and Midway airports; and its highly educated and creative workforce.

Along with the long-term challenges and opportunities is the issue of dealing with the difficult economic times that the Midwest is going through now. That includes reductions in the workforce, especially in the telecommunications and manufacturing industries, according to Hopkins.

“We are losing jobs in the financial services sector because of the effects of the sub-prime mortgage crisis,” he said. “All of these forces are cascading into some of the other service sectors.”

Another area of concern is the capital goods sector, according to Hopkins.

But, on the flip side, the economic development executive said businesses that are still going strong are in food processing and some specialized high technology sectors.

“The companies in consumer products, the companies that are in the health care business—they are doing fairly well and growing,” Hopkins said. “Other thriving businesses are in emerging technologies or in established high-end technology.”

Overall economic indicators offer mixed signals about the situation during the difficult business climate currently being experienced.

One regional gauge, the Chicago Business Activity Index, shows business operators’ confidence waning in future economic growth. The figure for the first quarter of 2008 is labeled weak at 78.3 when 100 is considered neutral and more than that amount is labeled strong.

Another economic yardstick, the Chicago MFG Midwest Index, shows productivity among manufacturers moderately improving. The figure of 105.3 is considered strong in the rating system in which 100 is neutral.

Economic indicators for the DuPage economy show that the first quarter of 2008 is characterized by a higher than normal unemployment rate of 4.4 percent with the creation of jobs for local residents showing modest growth.

Additionally, sales tax receipts for the year ending 2007 are slightly down from the year 2006 by .56 percent. And the office and industrial real estate markets show higher vacancy rates of 18.1 percent and 10.6 percent respectively.

To begin changing the current situation, Hopkins said the top priority for Choose DuPage is to attract domestic and international headquarters operations because they generate higher wages.

“We’ve got the resources here to staff those companies. We have well-educated business executives that represent a diversity of professional disciplines,” he said. “We also have the educational resources in the region, whether they are big business schools in the metro area or satellite MBA programs and advanced engineering and technology schools.”

He said the organization also wants to attract information technology and engineering-oriented companies because they historically have some of the highest salaries.

Choose DuPage also wants to attract companies in the financial services sector, which can then find capable employees among graduates of the area’s many business schools and programs.

Hopkins believes that DuPage County also has a good base of higher technology manufacturing capabilities for a variety of sectors, whether it’s metal fabricating, transportation equipment or building technology, as well as strong machinery-making competence.

He also pointed out that food processing and the logistics industries have always been strong here for a number of reasons including the central North American location.

In the past, the County sold itself, according to Hopkins. Many developers and communities created the necessary office parks, industrial parks, and research facilities on their own.

“But the climate has changed,” he said. “The county is almost built-out and has some obsolete buildings and obsolete business park environments.

“Our economic development policy will be to strategically select the growing business sectors that will match up with our current workforce resources, infrastructure capabilities and housing.”

Choose DuPage is marketing the County by supporting existing economic development efforts, Hopkins explained. That means working with local community development resources, educators and county officials and then helping them operate more effectively with private developers and with office and industrial companies.

The organization is also creating a brand/identity awareness for the DuPage County name.

“Then we want to extend that name recognition and brand awareness to all of the communities in DuPage County,” Hopkins said. “Each community has a local identity right now, and we are trying to create a complete county identity that will benefit everyone.”

Hopkins said the organization is assuring people that it is not duplicating or taking over local and county activities that are already in place.

With the help of Choose DuPage, Hopkins said in ten years some of the older areas of the county will become success stories as they transition from older small industrial building bases to homes for those companies which can still operate successfully: new corporate headquarters; engineering companies; and research companies.

In the coming years, Choose DuPage, which is in the midst of a fund raising campaign for $5 million, will be more of a public/private partnership with private sector leadership, according to Hopkins. DuPage Biz was the formative stage of a non-profit economic development organization.

Choose DuPage is the external brand name of The DuPage Regional Development Alliance which was established by DuPage County and given some initial funding by the county.

“While we will still focus on maintaining the county’s economic base—trying to attract and grow industrial and office companies—we will be getting more involved in government and business issues such as retail development, workforce development, transportation and some elements of residential development.”

Dan McLeister, Contributing Writer

Posted on Sunday, July 27, 2008 (Archive on Sunday, August 03, 2008)
Posted by jstoltz Contributed by jstoltz

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