Chicago Metropolitan Outlook for 2006 and Beyond

So far this decade, the Chicago metropolitan area economic performance has been disappointing. As in the surrounding Midwest, job declines during the recent recession were worse here than in the nation as a whole, and this area's job growth during the expansion has since been lagging.

What is Chicago's outlook for 2006? I am optimistic, although there are some defensible reasons for caution. For one, goods producing industries in the surrounding region may continue to pull down Chicago's service sectors. Chicago's outsized business and professional service sector continues to serve the Midwest, as do its travel, distribution, and business meeting services. But looking ahead, the Midwest economic outlook is clouded by the prospects for its automotive industry.

There is a second reason to be cautious: National economic growth is expected to moderately modest in 2006. Since Chicago and the Midwest generally follow national trends-perhaps even follow them in a magnified fashion-there is some reason to doubt that the metropolitan economy's performance will gain momentum as the national economy moderates.

Still, despite these trends, and with a great deal of uncertainty, I offer some reasons for optimism for those of us who are inclined to be bullish about Chicago.

Not all of the surrounding Midwest manufacturing activity is moribund. The region's capital goods industries, such as the machinery and equipment industry, are expanding. Looking forward, as national and global economic growth continues, U.S. and world demand for "new tools" and added production capacity will further lift capital goods sectors.

More generally, recently reported data indicate that improvement in Chicago's labor markets is already underway. During the autumn, Chicago's year-over-year payroll job growth exceeded one percent for the first time since the year 2000, while the unemployment rates were down in the fourth quarter.

Chicago's vaunted business and professional services industry is once more reporting strong employment growth. Though it has much catching up to do from its poor performance in recent years, Chicago's year-over-year job growth in this sector is exceeding the nation's.

In the travel and meeting arena, passenger arrivals to the Chicago area and hotel demand continue to recover. Plans for local conventions have edged up for 2006, as have planned developments of new hotel space.

Chicago's financial exchanges also form a bright spot. Chicago's importance as a financial center is defined by its exchanges and associated dealers and brokers. The Chicago exchanges can claim close to two-thirds of the volume of exchange-traded contracts in the U.S., and they once dominated global trading as well.

The Chicago area manufacturing sector was hit hard in the early years of the decade, especially in its own high tech hallmarks of IT and telecommunications manufacturers, such as Tellabs and the much larger Motorola. Thankfully, the region's machinery and equipment sectors have bottomed out because national investment spending has recovered, growing at double-digit rates in 2004 and 2005. Such strong national demand for equipment and software is expected to continue into 2006.

The Chicago area economy has not been fortunate in recent years. Its economy is driven by its business service and headquarters functions; its role as distribution hub of the Midwest's goods and materials; and its business travel/meeting activity. However, recent trends portend that Chicago's performance will somewhat catch up with the nation's in 2006.

--William Testa
VP and Director of Regional Programs, Research Department
Federal Reserve Bank of Chicago


For more information on the 2006 Economy please visit the Federal Reserve Bank of Chicago online.

Preparing Chicago: The Office of Emergency Communications

With the tragic events of Sept. 11th and the lessons learned from them, Chicago has recognized the importance of interagency coordination and timely intelligence sharing during emergencies. Mayor Richard M. Daley created a department whose integration of the latest in surveillance and telecommunications technology serves to pioneer the fields of local emergency management, disaster preparedness and homeland security—the Office of Emergency Management and Communications (OEMC).

The OEMC was charged with the central task of planning for, coordinating and managing interagency responses to large-scale emergency situations throughout the city. Since its inception, the OEMC's core mission has expanded so that it now includes:

• Operating the City's 911 emergency communications system through the use of advanced computer and telecommunications technology, ensuring rapid response from first responders
• Coordinating interagency resources and personnel to prepare for, respond to, and recover from natural or man-made disasters
• Executing the City's homeland security and disaster prevention/mitigation initiatives
• Administering the Traffic Management Authority that is responsible for all services related to effective traffic movement in the City

Unified Command

Joint Operations Center
The Joint Operations Center (JOC) serves as Chicago’s central command post for key city functions during large-scale emergencies. From this center, key decision-makers have the ability to bring together real-time intelligence and citywide situational awareness in any emergency situation.

Operations Center
The Operations Center (OC) serves as Chicago’s central command post for day-to-day city functions. Designed to mirror a military model of operations, with thirteen concentric-arc command stations capable of accessing city department databases and surveillance cameras strategically located throughout the city viewable on a 25-foot video wall matrix, the OC oversees the simultaneous exchange of real-time information streams between various city departments during both planned special events and large-scale emergency situations.

Traffic Management Authority
The Traffic Management Authority (TMA), created in 2004, is part of OEMC’s effort to maximize public safety during city emergency and non-emergency operations. The ability to coordinate and manage multiple traffic-related city services—Snow Command, Water Management, Streets and Sanitation—from one central location facilitates prompt and effective mobilization of resources, simultaneous tracking of multiple events, instant access to information sources and timely communication of this information to the general public. It is in light of the recent natural disasters that the synergistic benefits of centralized traffic command become all the more apparent.

A Unified Surveillance Network

Operation Virtual Shield
Over the past decade and a half, the City of Chicago has laid hundreds of miles of fiber throughout the city in what is the most impressive example of OEMC’s ongoing efforts to secure Chicago's Operation Virtual Shield (OVS). OVS is a comprehensive plan to develop, implement and maintain an extensive citywide fiber optic network and expandable video surveillance system. This fiber optic backbone will create a “virtual shield,” providing total homeland security, public safety and traffic management coverage in Chicago, and will facilitate the deployment of city services in response to emergency situations.

As a result of this fiber optic infrastructure, surveillance technology will be linked to the OEMC through a fault-tolerant, self-healing network that will enable emergency management personnel to view real-time or recorded video images, monitor biochemical sensors and control traffic signals throughout the city. The Operations Center will serve as a strategic information portal, receiving, analyzing and disseminating this critical intelligence.

Creating a Culture of Preparedness in Chicago

The City, through the OEMC, has incorporated each of the elements of emergency management—preparedness, response, recovery and mitigation—into overall planning and operational matrix, making emergency management a more proactive operation.

There is no denying the centrality of the government's role in protecting its citizens in an emergency situation, or the significant value technology adds to emergency management methods, but the limits of technology and government must be acknowledged. In order for the government to maximize its efforts in a disaster, its citizens must also fulfill the obligations set forth in that social contract. One of the many sobering lessons learned from Hurricanes Katrina and Rita is that emergency preparedness begins at the micro-level with the individual and their community.

How Individuals Can Prepare
The City of Chicago and OEMC have long recognized the need for creating a culture of preparedness among its residents. The recently launched "ALERT CHICAGO" is a campaign centered on an interactive website, seeking to increase public awareness for individual emergency preparedness by increasing the understanding of how, when and where hazards and potential disasters are likely to occur.

OEMC will maintain open dialogues and active partnerships between all spheres of government, the private sector, non-government organizations and its neighborhood communities. The need for creating a culture of preparedness in the City of Chicago is best summarized by OEMC's Executive Director Andrew Velasquez: "Government cannot do it alone; it takes the conscious and concerted efforts of an entire city to be prepared."

--Dean Tsilikas
Director of Intergovernmental Affairs
Office of Emergency Management and Communications

Chicago Joins United States Olympic Committee

"Citius-Altius-Fortius" translates to "Faster-Higher-Stronger." It's a philosophy followed by athletes participating in the Olympic and Paralympic games.

When we see USA on the top platform and hear our national anthem playing, we can feel the lump in our throat and the chills on our arms. It's a sense of pride and honor for every American. And now Chicago is committing to provide opportunities for Olympic athletes to achieve their dreams.

Earlier this month Chicago announced that it is a United States Olympic Committee (USOC) Community Partner. By becoming a Community Partner, our local Olympic and Paralympic athletes will receive the support they need to train at elite levels, giving them the opportunity to achieve their personal best. To date, Chicago is the fourth city named to participate as a Community Partner with the USOC. Chicago joins Houston, Texas, Birmingham, Ala. and Edmond, Okla.

Chicago has chosen to focus its support primarily on our local Paralympic Athletes and is committed to enhancing their opportunities for success. The Paralympics are elite sport events for athletes with disabilities. The games emphasize the participants' athletic achievements rather than their disability. The movement has grown dramatically since its first days. The number of athletes participating in Summer Paralympic Games has increased from 400 athletes from 23 countries in Rome in 1960 to 3,806 athletes from 136 countries in Athens in 2004. The next Paralympic games will take place in Torino, Italy, utilizing the same venues as the Olympic games.

In supporting the Paralympics, Chicago has the backing of the Rehabilitation Institute of Chicago, the nation's leading physical rehabilitation hospital. As a Community Partner, Chicago will raise funds, build awareness of Olympic/Paralympic efforts and participate in other USOC educational outreach programs.

"Chicago has long been a leader in programs for people with disabilities, so we're delighted to become a USOC Community Partner, focusing on Paralympic programs," said Mayor Richard M. Daley at a press conference announcing the partnership. "This is a great opportunity—not just for people with disabilities but for all Chicagoans—to share in the excitement of the Olympic and Paralympic Games and to reflect on the Olympic Ideals of vision, discipline, commitment, persistence and focus."

The Paralympics is different than the Special Olympics. Paralympic athletes are grouped into six different disability groups and in classes defined by the degree of function presented by the disability. The U.S. Parlaympics and the USOC are also providing opportunities for severely injured military service members to enhance their rehabilitation through participation in the Paralympic games.

Besides supporting the athletes, Community Partners will work directly with the USOC to increase public awareness of Olympic and Paralympic sports. Chicago will also have priority status for hosting USOC events and initiatives. The USOC previously hosted events in Chicago such as the televised Hall of Fame inductions which took place at the Harris Theatre and an educational program at Walter Payton High school, which promoted the values of pursuing a dream and the importance of fair play, including drug free competition.

There are various opportunities for individuals, business and private organizations to get involved or provide financial support; 100% of the funds raised will be put into programs supporting Chicago Paralympians.

If you are interested in supporting our Chicago Paralympic Athletes and initiatives, please email Carrie Simmons at csimmons@worldbusinesschicago.com. For more information about the Paralympic Games please visit the official Paralympic website.

Chicago by the Numbers

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Chicago, Illinois 60601

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