Regional Economic Indicators: Clusters


Chicago's freight and manufacturing clusters play a significant role in the region's economy, representing 17.5 percent of employment. Metropolitan Chicago is the largest rail-truck intermodal port in the country, moving more than 16.4 million 20-ft equivalent units of freight cargo and exporting nearly $44 billion of manufactured goods in 2016. The Chicago region is also the largest U.S. metropolitan economy with above average employment concentrations in both industry clusters.

Cluster Employment and Location Quotient


The number and concentration of industry jobs among the five U.S. metropolitan areas with the largest manufacturing and freight clusters. Given the complementary nature of these industries, these five regions have the largest total employment in these two clusters. 

Why it matters

Metropolitan Chicago’s dual concentration in freight and manufacturing is one of the many built-in advantages enhancing its global competitiveness. As of 2016, the seven-county Chicago region was home to the third-largest manufacturing cluster in the nation with more than 575,000 jobs, and the third-largest freight cluster in the nation with nearly 200,000 jobs. Such industries, which trade products and services both nationally and internationally, have outsized potential to grow the region’s economy. 

Manufacturing and freight cluster location quotients in select metro areas, 2016

The Role of Industry Clusters

Industry “clusters” are interdependent groups of firms and related institutions that can substantially benefit regional economies. As a cluster grows and specializes, it produces increasingly greater economic returns – lowering costs while increasing the formation, productivity, and growth of industries. Clusters attract professionals seeking high-quality employment to the region and in turn attract related businesses seeking a growing labor pool with industry-specific skills. Within clusters, ideas flow more easily among firms and workers in close proximity. Production costs decline as businesses share knowledge, common inputs and outputs, suppliers, partners, and customers. A growing body of research on the effect of industry specialization shows that these efficiencies provide for higher employment growth, wages, patenting, and industry startup activity.

Cluster Location Quotients

The Chicago region enjoys a diverse mix of industries, but also realizes significant gains through its economic specializations in freight and manufacturing. Employment totals and employment concentrations are useful measures of cluster vitality within a metropolitan economy. Total employment is a straightforward metric for the absolute size of a cluster. Location quotients (LQ) identify clusters of relative strength by measuring how concentrated an industry is within a regional economy compared to employment concentrations nationwide. 

A cluster is considered an economic strength when the proportion of regional employment in a cluster exceeds the national average. It is not considered an economic strength when regional employment concentrations match or fall below the national average. Cluster location quotients measure industries on a scale with a minimum score of zero, which indicates no regional cluster employment, and an average score of 1.0, which indicates similar employment concentrations between a region and the nation. An LQ above 1.0 indicates cluster specialization. 

Metropolitan Chicago’s manufacturing and freight clusters are significant as measured by both total employment and relative concentration compared to the national average. The region’s manufacturing and freight clusters had location quotients of 1.06 and 1.15 respectively in 2016. Among the five largest metropolitan manufacturing clusters, only the Chicago region has an above-average manufacturing employment concentration. Among the five largest national freight clusters, the Chicago region has the second-highest concentration, behind the Dallas region.

Manufacturing Cluster Growth

Manufacturing cluster employment has grown both regionally and nationwide since the 2007-09 recession. However, among the top five metropolitan areas, manufacturing employment totals are still well below 2001 levels. Only Houston has experienced positive net growth since 2001, and yet has seen recent declines as it struggles to retain these jobs amid slowdowns in the oil market. The nation as a whole saw 0.5 percent employment growth in these industries, exceeding growth in peer metropolitan areas except Dallas. The following chart shows employment changes among the five largest metropolitan manufacturing clusters, indexed to 2001 levels to show growth on a comparable scale.

Manufacturing cluster employment change in select metropolitan areas, 2001-16

Although manufacturing employment levels have declined since 2001 in most regions, the manufacturing industry saw resurgence during 2010-15 in the Chicago, Dallas, and Houston metropolitan areas. Despite this period of recovery, longer-term pressures on the manufacturing cluster mean that fewer manufacturing workers are required even as production levels increase. Metropolitan Chicago’s manufacturing cluster added approximately 44,000 manufacturing jobs during 2010-15, placing it behind only the Houston and Dallas regions in terms of total jobs added.

Manufacturing cluster employment growth in select metro areas, 2010-16

Freight Cluster Growth

Freight clusters around the nation have seen employment growth over several decades, with the Chicago, Dallas, Houston, and Los Angeles regions again showing positive net growth since 2001. The New York metropolitan area has had only a marginal increase in freight cluster employment over the same period. Nationwide, these industries saw a 3 percent increase in employment, again growing faster than most peer metropolitan areas except Dallas.

Freight cluster employment change in select metropolitan areas, 2001-16

Although growth in metropolitan Chicago’s freight cluster has lagged its southern counterparts, the region remains the third-largest freight cluster in the nation, adding nearly 38,000 jobs during 2010-16. The region’s dominance as a transportation hub attracts not only traditional freight jobs in trucking and warehousing, but also a variety of supporting industry jobs, such as traffic engineering, logistics management, and packing material manufacturing. Chicago’s strategic location and specialization also aids complementary businesses in manufacturing. Faster and more efficient movement of goods through the region gives local manufacturers a competitive advantage over those not located near efficient, cost-effective transportation alternatives.

Freight cluster employment growth in select metro areas, 2010-16

Monitoring the health of industry clusters and understanding their future needs is a critical part of ensuring the region’s current and future prosperity. CMAP has produced detailed analyses of the region’s freight and manufacturing clusters, as well as the nexus between the two. The reports contain numerous policy recommendations for enhancing the region’s industry clusters.

About the Data

Employment and location quotient figures are drawn from Economic Modeling Specialists International (EMSI) data, which uses both public and proprietary data sources to estimate employment totals. Freight and manufacturing clusters are defined by CMAP’s freight and manufacturing drill-down reports.

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Intermodal Lifts


The number of 20-foot equivalent units (TEUs) of freight cargo containers moved through metropolitan Chicago’s rail-truck intermodal terminals and other North American ports.

Why it matters

The Chicago metropolitan area is the largest inland port in North America. The region’s confluence of rail, truck, and air infrastructure make it a critical shipping node for North American freight. Approximately 16.4 million TEUs of cargo moved through the region’s rail-truck intermodal facilities in 2016, an increase of nearly 38 percent since 2009.

Busiest North American ports by TEUs moved, 2016

Intermodal Lift Growth in Metropolitan Chicago

The Chicago region is one of the largest and busiest cargo hubs in North America, due in part to its heavily used rail and intermodal yards, international airports, access to a transcontinental road network, and connection to the St. Lawrence Seaway, Great Lakes, and Mississippi River systems. CMAP estimates that between one-quarter and one-third of the nation’s freight tonnage originates, terminates, or passes through the region.

The movement of goods into and out of metropolitan Chicago supports the region’s economy. Advances in logistics technologies and services, coupled with a dense network of infrastructure and carriers, have enabled shippers to minimize freight costs and have created rising demand for freight and logistics services. The region’s strength in freight movement also provides manufacturers with timely, cost-effective, and reliable options for moving products to market. In particular, shippers are increasingly using intermodal containers that can be transferred across ship, rail, or truck without repackaging shipments, thus reducing the time and cost of handling goods as they travel to their final destination.

Generally, 20-foot equivalent units (TEUs) are used to measure containers that move through seaports. The busiest seaport in the world in 2016, for example, was the port of Shanghai, which moved 37.1 million TEUs of cargo. Intermodal cargo volumes are often estimated in TEUs, with one TEU representing the volume of a standard 20-foot cargo container.

The Chicago region receives intermodal cargo by rail or truck rather than by sea. A TEU equivalent for the region can be estimated by tracking the number of intermodal containers that are lifted by crane and transferred from truck to train and vice versa at the region’s 20 active intermodal facilities. Containers that pass through metropolitan Chicago without an intermodal lift are not included in total TEU estimates. The interactive map below shows the locations of the region’s intermodal facilities and lift volumes at each facility in recent years from 2000-16.

Click on a facility to see intermodal lift estimates.


National and Regional Intermodal Lift Trends

In 2016, the region’s intermodal facilities moved an estimated 16.4 million TEUs of cargo, roughly equivalent to the previous year. Long-term trends show that intermodal freight volumes in the region fell during the last recession but have since experienced a significant rebound, growing by 38 percent from 2009-16.

TEUs moved through rail-truck intermodal facilities in the Chicago region in select years, 2000-16

Metropolitan Chicago’s TEU equivalent estimates suggest that the region is the busiest port in North America, exceeding volumes at Los Angeles-Long Beach and significantly outpacing other major ports such as New York-New Jersey, Savannah-Brunswick, Seattle-Tacoma, and Vancouver. This performance is in part attributable to metropolitan Chicago’s unmatched freight infrastructure, which includes seven interstate highways and six of the nation’s seven Class I railroads.

About the Data

Estimates of TEUs for North American ports are from the American Association of Port Authorities, which collects self-reported data from each port. Estimates of TEUs for metropolitan Chicago are based on intermodal lift counts for intermodal facilities located within the seven-county region plus the UP Global III facility in Rochelle, IL. Intermodal lift data are reported to CMAP by each railroad. CMAP then sums the total number of lifts and multiplies the total by a container size factor for both U.S. and Canadian railroads to estimate a total TEU equivalent. CMAP multiplies this total by a “laden” container factor to eliminate empty containers from being counted in TEU estimates. When intermodal lift data are not available, CMAP may estimate lift totals. For more information on this methodology, refer to CMAP’s freight data web page

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Manufacturing Exports


The annual value of manufacturing exports from Chicago and peer metropolitan statistical areas.

Why it matters

The export of goods connects metropolitan economies with a growing global consumer base. Exports have been an important component of economic recovery in both Chicago and peer metropolitan economies. In 2016, metropolitan Chicago exported $43.93 billion of manufactured goods.

Manufacturing exports in select metro statistical areas, 2016

Advances in technology and logistics – coupled with a growing consumer base abroad – have created an increasingly global marketplace for goods. Because more than 95 percent of the world’s population lives outside of the U.S., the majority of future economic growth will occur abroad. Many U.S. manufacturers are tapping into these markets by exporting their goods overseas. Exporting can contribute to broad economic prosperity by generating revenue for businesses in the region and supporting higher-income jobs in the region’s manufacturing cluster.

Metropolitan Chicago's Manufacturing Export Trends

Manufacturers that export goods gain access to diverse markets and enjoy a broad, varied customer base. The Chicago region’s advanced manufacturing industries in particular often export products to these global markets. Such industries contribute to regional export activity, reflecting the region’s manufacturing diversity, including Chemicals, Computer and Electronic Products, Transportation Equipment, and Machinery. Demand for those advanced manufactured goods, measured by sales value, serves as an indicator of the region’s global competitiveness.  

Chicago metro statistical area major manufacturing export industries, 2016

The chart below shows real manufacturing export growth for Chicago and peer regions indexed to the year 2005 to show growth on a comparable scale. Export growth declined in all metropolitan areas during the 2007-09 recession, followed by a period of often-modest recovery. Since 2013, metropolitan regions across the nation have seen recent declines. Total U.S. exports of goods and services declined 2.3 percent in 2016, further contributing to these decreases. Still, metropolitan Chicago’s manufacturing exports increased by nearly 37 percent during 2005-16, rivaling or exceeding growth rates of New York and Los Angeles, and lagging Washington, D.C.

Real manufacturing export growth in select metro statistical areas, by value 2005-16

About the Data

Manufacturing exports values are based on the U.S. Census Bureau’s Origin of Movement data series. Export sales are attributed to metropolitan areas based on the ZIP code in which payment for a good is received. The manufacturing industries discussed here reflect 3-digit NAICS classifications.

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Skills Gap


The number of job openings compared to corresponding post-secondary educational program completions in the Chicago region for the fields of Mechanic and Repair Technologies, Precision Production, and Transportation and Material Moving.

Why it matters

Comparing job openings to related educational completion data can provide a rough measure of the supply and demand for labor in specific occupations. The three career fields tracked here represent middle-skill manufacturing and freight occupations, which require more than a high school diploma but not necessarily a four-year bachelor’s degree.

Such occupations will become increasingly important for the regional economy as metropolitan Chicago’s manufacturing and freight clusters seek to replace retiring baby boomers, adapt to increasingly digitized and connected production technologies, and compete in a global market. Aligning educational programming to workforce needs can help ensure that the region’s workers have the knowledge and skills required to sustain and grow the region’s industry clusters.

Balancing Chicago region job openings and training program completions in select professions

Openings and Completions in Cluster Industry Jobs

Job openings and post-secondary educational data provide insights into the balance between skills sought by regional employers and skills held by the region’s workforce. The data represent all job openings as employers fill both new positions created as employment grows as well as replacements as current workers change jobs or retire. Alternatively, educational program completions data only represent the number of new qualifications conferred annually, and so do not represent the entire labor pool from which employers can select applicants. Persistent gaps between job openings and completions can lead to challenges for workers, employers, and training providers—and stymie industry growth. The following charts show job openings and educational program completions from 2008-16.

Job openings and program completions in select professions, 2008-16 graphic

Each profession saw a decline in openings during the 2007-09 recession followed by a period of recovery. However, longer-term pressures on manufacturing employment became evident as openings leveled off and again declined. Educational program completions in Precision Production – which prepare students for positions such as Machinist, Tool and Die Technician, Metal Fabricator, and Cabinetmaker – have more than doubled since 2008. The Transportation and Material Moving gap widened substantially during 2009-15, but narrowed slightly in 2016 as subdued trade growth slowed the global movement of goods. 

Slowdowns in such mid-skill job openings can indicate both difficulties for particular career fields or employers, and broader shifts in the U.S. economy, such as increased levels of efficiency from automation. Today, demand for workers has waned even as manufacturing output and regional exports remain strong. Still, nationally representative research suggests that three-quarters of U.S. manufacturing plants show no sign of hiring difficulties for open positions. Instead, long-term vacancies may indicate specific positions that require higher-level numeracy and literacy skills, or particularly tight local job markets.

The evolving workforce needs of clusters highlight the importance of continued alignment between the region’s workforce development programs and employers. Strategic planning and collaboration can help alleviate such imbalances between new job openings and educational completions. In some parts of the region, employers work with educational institutions to train students in the skills and competencies required to fill jobs. Such efforts help to retain both students and employers in the region, as students seek employment within the region and related businesses take advantage of a deeper labor pool with industry-specific skills. Additional coordination among workforce development stakeholders and employers could improve both the efficacy of training programs and quality of the talent pool for employers.

About the Data

The Classification of Instructional Programs (CIP) taxonomy categorizes fields and programs of study. This analysis tracks three separate CIP categories: Mechanic and Repair Technologies (CIP 47), Precision Production (48), and Transportation and Material Moving (49).

Job opening estimates are obtained from EMSI proprietary data sources and include job openings attributed to both industry growth and replacement (individuals leaving their position). Completion data are obtained from EMSI and originate from the National Center for Education Statistics. Job openings data represent point-in-time estimates of the labor market for each career and generally illustrate market conditions. In 2017, EMSI made substantial changes to how it estimates job openings by incorporating new data released by the U.S. Bureau of Labor Statistics based on a methodology that is more sensitive to non-traditional career paths. Individuals completing a specific post-secondary training program may not necessarily be seeking a job in the corresponding industry field. Data on job openings may not reflect actual totals because some employers fill positions without advertisements.

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