Chicago was and continues to be the third largest of 384 metropolitan statistical areas (MSAs) in the nation. Yet with 14 counties over three states, our Midwestern capital has less than 4% of the nation’s Real Gross Domestic Product, the value of goods and services produced in those metro areas (adjusted for inflation to 2017 dollars).
This is not something new. Chicago’s MSA entered this century with 4.4% of the nation’s Real GDP and has declined every year since then to 3.6%.
Chicago’s metro was 13th in growth of Real GDP, but its growth rate of 15.2%, placed 228th nationally, between Buffalo (New York) and Hartford (Connecticut). Between 2013 and 2023, all U.S. metro areas grew by 28.5%, the rate attained by Ann Arbor (Michigan) in 108th place.
Why? That’s a book. But we can identify the sectors which performed most poorly and most well.
Remember, we are discussing the metropolitan area, not just the Loop downtown or Cook County (Chicago’s home).
Where has Chicago been lagging, or to put it otherwise, where has the nation been outpacing Chicago? In 2013, Chicago had 5% of the nation’s Real GDP originating in the management of companies and enterprises; that fell to 3.2% by 2023.
Manufacturing remains one of the Chicago metro’s leading sectors, but there has been a pronounced change. We think of durable goods’ value (steel, autos) being greater than that non-durables (food and chemicals). The reality is non-durables out-produced their more durable cousins by 37% in value in 2023.
Thinking of Chicago as a major center of commerce means thinking of finance and insurance, the plasma of business. Here again, the Chicago metro area declined, a fall of $7.9 billion over the decade. Those declines, however, were realized only in the 9 Illinois counties of the metro area.
These changes and missed opportunities hit hard at the construction industry, a facilitator and residual claimant of growth. Metro Chicago saw construction work decline (in 2017 dollars) by 4.3% or $957 million.
While noting reductions in the real value of output, it is important to recognize that, nonetheless, 12 of the 14 counties did see overall growth. Cook County led the metro area with an advance of $53 billion or 56% of the total $96 billion growth. But Cook’s growth rate (14.3%) was only in the middle of the pack. Will County (Illinois) led all 14 counties at 33.4%, followed by Porter (Indiana) and Kenosha (Wisconsin) both with 21% increases.
The only counties with real declines in GDP over the decade were Newton and Jasper in Indiana. Both of them had an 8.6% decline in their combined Real GDP. Their Inclusion in the Chicago metro area hinges on commuting patterns alone, which is a weak thread in this case.