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Release: Immediate

UI report predicts moderate growth for Iowa economy

IOWA CITY, Iowa -- The economy of Iowa will grow moderately for 1997 and 1998, with prospects for employment brightening, according to the Iowa Economic Forecast released today by the University of Iowa Institute for Economic Research.

The report was prepared for the Iowa Economic Forecasting Council which received it today in Des Moines.

According to the report:

-- Real personal income (that is, adjusted for inflation) can be expected to grow about 1.8 percent in 1997 and about 1.5 percent in 1998. That's down slightly from the June forecast of 2 percent for 1997 and 1.8 percent for 1998.

-- Non-farm employment is expected to grow nearly 2 percent in 1997 and 1.3 percent in 1998. That's up slightly from June's forecast of 1.4 percent growth in 1997 and 0.7 percent for 1998.

-- Most non-farm employment is expected in the service sector, which is expected to grow by about 4.4 percent in 1997.

Institute Director Beth Ingram says the Institute's model also predicts 2.2 percent growth in state tax revenue for fiscal year 1998, which is slightly higher than the official forecast of 1.4 percent.

The lower figures represent the effects of both state and federal tax cuts enacted in 1997.

The state's Revenue Forecasting Conference will meet later in the month to consider whether to change the official estimate for revenue growth.


EDITORS NOTE: Beth Ingram, director of the University of Iowa Institute for Economic Research, will be in Des Moines today (Sept. 18) to present the Iowa Economic Forecast to the Iowa Economic Forecasting Council. If you'd like comments on the report, contact Charles H. Whiteman, chair of the UI department of economics and former director of the Institute, at (319) 335-0831; or (319) 335-0834.