Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, November 19, 1993 TAG: 9311200279
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Californians, hard hit by layoffs in the defense and aerospace industries, saw their incomes grow the least of any state over the 12 months ending in the second quarter of this year, the Commerce Department said Thursday.
Personal incomes grew 3.2 percent there, compared with a national average increase of 5.5 percent. Meanwhile, in adjoining Nevada, incomes shot up 10.7 percent, the best in the nation.
Economist Kurt Karl of The WEFA Group, a Bala Cynwyd, Pa., forecasting firm, said states in the Northwest and Rocky Mountain region are benefiting from migration out of California. Lower wages and housing costs in nearby states are luring away employers, he said.
``Companies are leaving and starting up [in neighboring states] . . . because of the heavier taxes and regulation in California and also the crowding in Southern California,'' he said.
Other slow-growing states included Rhode Island, 3.9 percent; Maine, Massachusetts and Louisiana, 4 percent; Delaware, Missouri and Ohio, 4.7 percent; and Maryland, Oklahoma and New York, 4.8 percent.
New England also has been hurt by defense cutbacks. Rust Belt manufacturing states such as Ohio and Michigan, which weathered the recession relatively well, are being held back now by the loss of export sales to recessionary Europe and Japan, Karl said.
Besides Nevada, states with fast-growing incomes included Utah, 8.6 percent; Minnesota, 7.9 percent; Florida, 7.8 percent; Idaho, 7.7 percent; Colorado, 7.6 percent; North Dakota and Arizona, 7.5 percent; New Mexico, 7.4 percent; and Oregon and South Dakota, 7.3 percent.
California also has been affected by a collapse of real estate values. Construction payrolls fell 5.2 percent there, compared with a gain of 4 percent nationally. Maine and Louisiana also saw construction payroll declines.
Fast-growing states generally are enjoying a rebound in construction and the manufacturing of durable goods.
``There's a huge construction boom going on in Nevada,'' said economist Paul Getman of Regional Financial Associates in West Chester, Pa. ``All the casinos are rebuilding. They're tearing down old casinos and putting in what they call family parks, which are sort of combination gambling establishments and mini Disney Worlds.''
Most states in the Southeast also showed above-average growth, although - except for Florida - they did not make it into the top 10. But Getman said growth there historically has been more consistent than in the Rocky Mountain region and Southwest.
``Nevada, Idaho, Utah and Arizona are notorious boom-and-bust states. They only know two speeds: full speed ahead and full stop. Right now they're at full speed, but they all underwent busts in the early and mid-1980s, so some of this is catchup,'' he said.
by CNB