Iowa Economic Forecast Updates Iowa Income Growth Rates in 2005 and 2006

According to its latest Iowa Economic Forecast, the University of Iowa Institute for Economic Research expects real personal income growth of 2.4 percent in 2005, down from a forecast of 3.7 percent in July. For 2006, the Institute projects real personal income growth in the state to be 1.9 percent, down slightly from 2.1 percent in July.

Charles Whiteman, Institute director and UI professor of economics, explained that slower growth is not due to lower predicted personal income for 2005 and 2006, but can be attributed to a revision by the U.S. Commerce Department to historical income data for 2004, used as a basis for the forecast. The current forecast compares that data with state income data through the second quarter of 2005.

The forecast projects the state could reach a milestone in 2006, with personal income in the state surpassing $100 billion, Whiteman added.

The Institute's forecast for employment is for a growth rate of 0.9 percent in employment, unchanged from July, and an increase of 0.9 percent in 2006, down slightly from July.

The Board of Regents, State of Iowa created the Institute for Economic Research in July 1975 to facilitate cohesive and continuing economic research and to establish a formal mechanism for providing interaction with, and economic research services to, government and industry. Each quarter, the Institute produces the Iowa Economic Forecast, which contains quantitative forecasts of economic conditions and tax revenues for the State of Iowa, utilizing the latest developments in the latest advances in econometric theory.

Contact: Charles Whiteman, Institute for Economic Research, 319-335-0834

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