CONTACT: GEORGE MCCRORY
300 Plaza Centre One
Iowa City IA 52242
(319) 384-0012; fax (319) 384-0024
Release: Oct. 3, 2001
Iowa Economic Forecast projects weak state income growth for 2001
CITY, Iowa -- In its latest Iowa Economic Forecast, the University of Iowa
Institute for Economic Research predicts weak income growth for 2001 and increase
only slightly into 2002.
Beth Ingram, Institute director and UI professor of economics said the forecast
for real personal income growth in Iowa stands at 1.3 percent for 2001, down
from 2 percent projection in June. This forecast is based on state income
data through the first quarter of 2001 and national income data through the
second quarter of 2001. The Institute released its report Friday, Sept. 28
at the Iowa Economic Forecasting Council meeting in Des Moines.
Ingram said the fourth quarter ending Dec. 31, 2000 was especially weak
in Iowa; real personal income fell at an annual rate of 0.09 percent. "We
now expect second quarter growth in Iowa to be a paltry 0.7 percent, while
third quarter income will decline by 1.1 percent, for a growth rate of 1.1
percent," she said. The overall income forecast for 2002 has been revised
to 3 percent, down from 3.6 percent forecast in June.
"However, our forecast indicates that income growth will pick up in
the fourth quarter of 2001, but this does not take into account any additional
economic consequences of the events of Sept. 11," Ingram said.
On a year-over-year basis, employment in the state fell by 0.7 percent in
the second quarter of 2001. In June, the Institute forecast virtually no growth
in employment in Iowa this year. It now expects employment to decline by approximately
half a percent, for a growth rate of 0.5 percent.
"This downward revision has also dampened our expectation for employment
growth in 2002; we now expect employment to grow by 1.5 percent instead of
the 2.1 percent forecast in June," Ingram explained.
The Institute also expects that the rate of state revenue growth will be
slow compared to historical standards, with revenue growth hovering between
3 and 4 percent over the next three years
For complete forecast data, see the Institute's website at http://www.biz.uiowa.edu/econ/econinst/.
or call Ingram at (319) 335-0897