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Forecast Projects 2 Percent State Income Growth In 2003

In its latest Iowa Economic Forecast, the University of Iowa Institute for Economic Research expects real income growth of 2 percent in 2003, down from a forecast of 2.6 percent in November 2002.

Beth Ingram, institute director and UI professor of economics, said the forecast is based on state income data through the third quarter of 2002. Real income growth for 2004 is expected to be 2.8 percent, up slightly from 2.7 percent forecasted in November.

Revenue growth for the current fiscal year, FY03, stands at 1.1 percent. The Institute is forecasting a growth rate of 1.1 percent for state tax revenue in the current year, followed by .6 percent revenue growth in FY 2004.

This forecast shows less revenue growth compared to the forecast completed in November 2002, which predicted a revenue growth of 2.1 percent for FY 2003, and 1 percent revenue growth in FY 2004. Ingram attributed revision to the expectation of less personal income in FY03 and a greater amount of information about current-year revenue growth.

The Institute's forecast also anticipates an increase of employment growth in Iowa in 2003 of .6 percent, followed by moderate growth of 2.2 percent in 2004. Employment had declined by .5 percent in 2002, Ingram noted.

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