UI Economic Forecasting Institute Projects Average Growth in Iowa
"Current expectations are that employment and the purchasing power of our incomes will grow very close to, if not quite at, historical averages," said Charles Whiteman, who is director of the institute, professor of economics, and associate dean of the Tippie College of Business.
The institute predicts that Iowa personal income will grow about 2.1 percent in 2007 after being adjusted for inflation, after 3.2 percent growth in 2006. These figures are in line with expectations for the U.S. economy in general, the report said.
Employment growth has been relatively strong in Iowa in the past two years, Whiteman said, with growth in non-farm employment at 1.6 percent in 2005 and 1.7 percent in 2006. He said the prediction for 2007 now stands at 1.1 percent, exceeding the predicted population growth of one-half a percent by a wide margin.
The strongest employment growth category in Iowa is in durable goods manufacturing, which the institute expects to grow by 1.4 percent this year.
"The manufacturing sector of Iowa's economy grew by 2.9 percent in 2006 so while we are expecting it to slow this year, the state is still in much better shape than at the national level, where the manufacturing sector is expected to continue to decline," Whiteman said.
The Institute for Economic Research serves Iowans as an advisory group to the Governor's Council of Economic Advisors. The council's discussions are in turn used by the state's Revenue Estimating Conference in determining the official prediction of the rate of growth of tax revenues for the coming two fiscal years. The Board of Regents created the institute in 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, using the latest advances in econometrics.
Contact: Tom Snee, UI News Services, 319-384-0010