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Sept. 19, 2000

UI report predicts moderate economic growth in Iowa

IOWA CITY, Iowa -- The Iowa Economic Forecast points to a moderate pace of growth in the state's economy in 2000 and in 2001.

The University of Iowa Institute for Economic Research released the forecast today (Sept. 19) at the Iowa Economic Forecasting Council meeting in Des Moines.

"In line with national forecasts, we expect the Iowa economy to post moderate rates of growth in the final two quarters of 2000 before returning to trend-like growth in early 2001," said Institute director Beth Ingram, UI associate professor of economics.

The Institute's forecast for Real Personal Income growth in Iowa stands at 3.25 percent for 2000, down from 4.86 percent growth forecast in June. The current expectation for real personal income in 2001 will grow by 3.6 percent, up from 3.01 percent in the June forecast. Much of the revision for 2000 is due to slower-than-expected growth in quarter one, leading to lower expectations for the remainder of 2000, Ingram said.

The employment growth forecast for 2000 is up significantly from the forecast in June. We now expect employment to increase by 2.0 percent in 2000 (up from 1.1 percent in June) and by 1.0 percent in 2001 (up from 0.24 percent in June).

Employment growth is expected to be positive in all sectors of the Iowa economy except non-durable goods manufacturing through 2000 and 2001, with growth strongest in services and retail trade. The service sector now employs nearly 27 percent of the Iowa workforce, according to the Institute.

For more information, contact Ingram at (319) 335-0897 or Charles H. Whiteman, chair of the UI department of economics and former director of the Institute, at (319) 335-0834.