Economy About Peoria, IL

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Peoria is a mid-sized city located in central Illinois along the Illinois River. With a population of around 115,000 residents, Peoria serves as the economic hub for the surrounding region. The city has a diversified economy with major industries including healthcare, manufacturing, finance, education, and transportation.

Peoria has seen its fair share of economic ups and downs over the past few decades but has proven resilient with a stable employment base and median household income. This article will provide an in-depth look at the various aspects of Peoria’s economy.

Major Industries and Employers

Healthcare

Healthcare is Peoria’s largest industry, accounting for about 1 in every 5 jobs in the metro area. The city’s major healthcare providers include OSF Healthcare, UnityPoint Health, Hopedale Medical Complex, Methodist Medical Center, and Richard Owens Hospice Home.

Several major insurers also have a regional presence in Peoria including Blue Cross Blue Shield of Illinois, UnitedHealthcare, and Cigna.

Major healthcare employers in Peoria include:

  • OSF Saint Francis Medical Center – 6,000 employees
  • OSF Medical Group – 1,500 employees
  • UnityPoint Health – 1,300 employees
  • Hopedale Medical Complex – 950 employees
  • Richard Owens Hospice Home – 500 employees

The presence of multiple large hospitals and clinics has made Peoria a regional hub for specialized care. The healthcare sector is expected to continue expanding in the city, driven by an aging population and increased demand for services.

Manufacturing

Manufacturing remains a vital part of Peoria’s economy, accounting for about 1 in every 8 jobs. The city has long been known for heavy equipment and specialty manufacturing.

Major companies headquartered in Peoria include Caterpillar Inc. (construction and mining equipment), Komatsu Mining (mining equipment), RLI Corp. (insurance products), Keystone Steel & Wire (fencing and wire products), and Advanced Technology Services (industrial maintenance services).

Other major manufacturers with a significant presence include:

  • Caterpillar – over 3,500 employees
  • Komatsu – 1,200 employees
  • HiLex Corporation – 930 employees
  • Johns Manville – 860 employees
  • Keystone Steel & Wire – 780 employees

The manufacturing sector took a hit during the Great Recession with several plants closing or downsizing. However, Peoria has maintained its position as a manufacturing hub for central Illinois due to its skilled workforce and logistics infrastructure like major rail lines. Recent growth in advanced manufacturing and sustainable technologies points to a possible manufacturing revival in the city.

Finance and Insurance

Peoria has emerged as a regional center for back-office financial services and insurance. Major companies with large operations in Peoria include State Farm Insurance, Caterpillar Financial Services, Discover Financial Services, and Bank of America. These firms provide various support services like IT, customer service, sales, and claims processing for their respective companies.

Top finance and insurance employers include:

  • State Farm Insurance – over 4,100 employees
  • Caterpillar Financial Services – 1,300 employees
  • Discover Financial Services – 1,100 employees
  • Bank of America – 930 employees
  • RLI Corporation – 510 employees

The finance and insurance sector accounts for about 1 in every 12 jobs in Peoria. Proximity to Chicago and the presence of several Fortune 500 corporate operations have allowed this industry to thrive. The relatively low cost of living and doing business also makes Peoria attractive for back-office financial services.

Education

Peoria is home to several higher education institutions that are major employers in the city. Bradley University is the largest private employer with over 1,300 employees. Other colleges and universities include Illinois Central College (700 employees), Methodist College (230 employees), Brown Mackie College (190 employees), and University of Illinois College of Medicine Peoria campus (180 employees).

The public Peoria Public Schools district employs around 3,200 teachers, administrators, and staff across nearly 40 schools. There are also several smaller private schools in the city employing hundreds of additional teachers and staff.

Education ranks among the top 5 industries in Peoria, accounting for about 1 in every 15 jobs. The presence of several universities and colleges helps support a skilled local workforce. It also provides an important source of middle-class stability for the city’s economy.

Transportation and Warehousing

Due to its strategic location in the central Illinois region, Peoria has long been a transportation hub. The Greater Peoria Regional Airport provides commercial air service from major carriers like United Airlines, Delta Air Lines, and Allegiant Air. About 200,000 passengers pass through the airport each year.

Additionally, the Port of Peoria provides an important multimodal shipping hub with connections between river, rail, and highway networks. There are 7 major rail lines that run through the city making it a key node for freight traffic. Major companies with distribution centers in Peoria include Caterpillar, Komatsu, Dollar General, Macy’s, Amazon, and Walmart.

Top employers in the transportation and warehousing sector include:

  • FedEx – 900 employees
  • Caterpillar Logistics – 620 employees
  • Ozburn-Hessey Logistics – 430 employees
  • Illinois Railway – 380 employees
  • Keystone Steel & Wire Company – 210 employees

This sector accounts for around 5% of Peoria’s jobs. Logistics infrastructure and workforce capabilities related to distribution make Peoria strategically important for transportation and warehousing firms looking to serve the broader Midwest market.

Small Businesses and Startups

Small businesses are the backbone of Peoria’s economy, comprising over 85% of all businesses in the metro area. There are around 11,500 small businesses that employ fewer than 100 workers each. Major sectors for small businesses include healthcare, professional services, construction, retail, food services, automotive, and manufacturing.

Some of the largest small business sectors in Peoria include:

  • Restaurants – over 550 small businesses
  • Physician practices – over 350 small businesses
  • Misc. store retailers – over 300 small businesses
  • Religious organizations – over 300 small businesses
  • Construction contractors – over 250 small businesses

In recent years, Peoria has worked to cultivate a startup ecosystem to encourage new business formation and innovation. There are several co-working spaces, incubators, and resources available including:

  • Peoria Innovation Hub – startup incubator and co-working space
  • Bradley University’s Business and Engineering Convergence Center – incubator for student startups
  • Greater Peoria Economic Development Council – provides mentoring and support programs for small businesses
  • Peoria Area Chamber of Commerce – offers networking events, workshops, and other resources

Some successful startups launched in Peoria include transportation software provider RocketRoute, video production marketplace Framed.io, social shopping app Swogo, and mobile gaming company Ozobot. While still developing, Peoria’s startup ecosystem shows promise to diversify the economy and drive future job growth.

Real Estate and Construction

The real estate market in Peoria has remained relatively affordable compared to state and national averages. The median home value is around $116,000, having appreciated by 5% over the last year. Average monthly rents for apartments in Peoria are between $650 (1-bedroom) and $850 (2-bedroom).

Major residential developers active in the Peoria market include Hometown Companies, Pekin Development, and Irons Oaks Companies. On the commercial side, major developers include ICCWP Properties, Cullinan Properties, and KDB Group. Recent major construction projects include:

  • Water Street District – $100+ million mixed-use development along the riverfront
  • OSF HealthCare corporate headquarters – $80 million office campus
  • River Trail Apartments – $25 million luxury apartment complex
  • Junction City shopping center – $20 million retail center

The construction sector employs around 2,600 workers in the Peoria metro area across 350 companies. Major employers include ICCWP Construction, Mt.

Hawley Construction, River City Construction, Cullinan Properties, and Central Illinois Builders. While the industry took a hit after the housing bubble burst, construction activity has been steadily recovering driven by healthcare, commercial, and infrastructure projects.

Income and Wages

Peoria has a median household income of $55,000 which is on par with the national median. The per capita income is around $29,000. However, there is a significant variation in wages across industries:

  • Healthcare – average salary of $60,000
  • Finance – average salary of $58,000
  • Manufacturing – average salary of $45,000
  • Education – average salary of $42,000
  • Retail trade – average salary of $28,000

The major high-paying professions in Peoria include physicians, dentists, Nurse Practitioners, accountants, financial managers, engineers, software developers, and lawyers. Entry-level customer service and retail roles tend to be near minimum wage levels.

Peoria’s living wage ordinance requires employers with 15+ workers to pay at least $12 per hour. The city has a slightly lower than average cost of living compared to other Midwest cities which helps make wages go further. However, critics have argued that wages are too low especially in the thriving healthcare sector.

Government and Taxes

Peoria has a mayor-council form of municipal government. The current mayor is Rita Ali. The city levies a 1% sales tax on goods which generates over $30 million annually. Other taxes include:

  • Property tax – effective rate of 1.5%
  • Hotel/motel tax – 5% tax on lodging
  • Food and beverage tax – 1% tax on prepared food
  • Telecom tax – 6% tax on phone bills

Major tax revenue sources:

  • Sales tax – $30 million
  • Property tax – $25 million
  • State income tax – $15 million
  • Utility taxes – $14 million

The city has maintained a AA credit rating allowing it to borrow at favorable interest rates. The annual budget is around $200 million covering expenses for police, fire, public works, and other general services. Peoria provides an attractive tax environment for businesses with lower rates than Chicago. This helps offset the higher taxes at the state level.

Business Organizations

There are several prominent business organizations that serve the Peoria area:

Peoria Area Chamber of Commerce

  • Largest business association with over 1,400 member companies
  • Advocates for pro-business policies and economic growth
  • Offers networking events, workshops, career fairs, and other resources

CEO Council

  • Exclusive group of top executives from major companies
  • Focuses on public policy advocacy and talent attraction
  • Current membership includes leaders from Caterpillar, OSF, Komatsu, Bradley University, and others

Heartland Partnership

  • Economic development group covering the tri-county Peoria region
  • Recruits businesses to locate in the region and supports small business growth
  • Administers state and local business incentive programs

Central Illinois Manufacturers Association

  • Trade association representing manufacturers in the region
  • Offers training programs and networking events for manufacturing professionals
  • Advocates on business climate and workforce development issues

These organizations provide a unified voice for strengthening the regional economy and fostering a pro-business environment. They play an important role in the growth of Peoria’s key industries.

SWOT Analysis

Below is a SWOT analysis summarizing the key strengths, weaknesses, opportunities, and threats related to Peoria’s economy:

Strengths

  • Diverse economy led by healthcare, manufacturing, finance, education
  • Home to several major Fortune 500 operations like Caterpillar and OSF Healthcare
  • Logistics infrastructure with airport, river port, and rail access
  • Abundant technical training programs through colleges and employers
  • Lower cost of living and taxes versus Chicago

Weaknesses

  • Decline of heavy manufacturing over past decades
  • Population and job growth lagging national averages
  • Lower educational attainment levels than state/national averages
  • Downtown area struggled with some business closures
  • Limited public transit options outside the urban core

Opportunities

  • Growing advanced manufacturing, technology, and green energy industries
  • Revitalization of downtown and riverfront districts with new development
  • Expansion of passenger air service and freight capabilities at airport
  • Growth of healthcare sector with aging population
  • Attracting remote workers and companies in the post-Covid era

Threats

  • Competition from other Midwest cities for jobs and corporate relocations
  • Potential exodus of manufacturing jobs due to automation
  • Talent recruitment and retention challenges
  • Impacts of future economic downturns or recessions
  • Continued population declines hampering growth

Conclusion

In summary, while facing its share of challenges, Peoria retains a moderately strong economy anchored by major corporations and institutions. The city’s central location, logistics infrastructure, skilled workforce, and business incentives make it prized by companies looking to serve broader markets.

Peoria has proven its ability to reinvent itself throughout past economic shifts. Promising opportunities exist across industries like healthcare, technology, and advanced manufacturing. However, community leaders must proactively invest in talent, innovation, and infrastructure to ensure Peoria remains economically vibrant for decades to come.

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  • Head east on E Orchard Ave toward S Powerline Rd. The destination will be on your right just past S Elder St. Look for the green house with white trim. If you reach the intersection with S Fern St, you’ve gone too far. The total drive is approximately 0.2 miles from S Powerline Rd.
  • From downtown Nampa, take 3rd St S heading south. Turn right onto E Roosevelt Ave and continue for 1.8 miles. Turn left onto S Elder St and drive 0.1 miles until you reach E Orchard Ave. Take a right onto E Orchard Ave. The green house with white trim will be on your right just after turning.
  • Take I-84 W towards Nampa. Take exit 38 for Franklin Blvd toward Nampa/Caldwell. Turn right onto Franklin Blvd and drive 3.2 miles. Turn left onto E Orchard Ave and continue for 0.9 miles. The destination is the green house with white trim on the right just past S Elder St. The total drive from I-84 is approximately 4.5 miles.