University of Iowa News Release
March 13, 2006
This forecast was revised March 22. See News Release for more information.
Iowa Economic Forecast Predicts Growth In Employment, Slower Income Growth
In its latest Iowa Economic Forecast, the University of Iowa Institute for Economic Research predicts that employment will grow 1.9 percent in 2006, which would be the most rapid employment growth in Iowa since 1998.
Chuck Whiteman, Institute director and UI professor of economics, said the forecast was based on data through the end of 2005. He presented the forecast to the state's Council of Economic Advisors March 10 in Des Moines.
The employment forecast for 2006 is up significantly from December's forecast, which predicted 1.1 percent employment growth. The employment forecast for 2007 is for a growth rate of 1.8 percent in the non-farm sector, also up dramatically from 1 percent in December.
However, the Institute expects real personal income growth to be 1 percent in 2006, down from a forecast of 1.7 percent in July. For 2007, the Institute projects real personal income growth in the state to be 2.4 percent, unchanged from December.
"We're predicting a slight slowing of income growth from earlier forecasts, mostly due to a U.S. Commerce Department revision to personal income for the first two quarters of 2005. Mostly this is a timing issue; the prediction is that Iowa will see moderate income growth for the next two years," Whiteman said.
The Board of Regents, State of Iowa created the Institute for Economic Research in July 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, utilizing the latest developments in the latest advances in econometric theory.
STORY SOURCE: University of Iowa News Services, 300 Plaza Centre One, Suite 371, Iowa City, Iowa 52242-2500.
OTHER INFORMATION: See complete data at the University of Iowa Institute for Economic Research website http://www.biz.uiowa.edu/econ/econinst/.