THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Wednesday, August 24, 1994 TAG: 9408240488
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MARTIN CRUTSINGER, THE ASSOCIATED PRESS
DATELINE: WASHINGTON LENGTH: Medium: 78 lines
Disastrous floods, downsizing of the military and lingering effects of the 1990-91 recession all contributed to slow income growth in states large and small last year, the government reported Tuesday.
The Commerce Department released revised figures showing that North Dakota ranked dead last with no growth in per capita incomes, followed by Iowa and California.
Virginia, which matched the national average with 3.2 percent growth, ranked 34th in the United States. In the Southeast region, Virginia ranked 10th of 12 states in income growth, topping only Kentucky and Arkansas.
The poor showing in North Dakota and Iowa, as well as Nebraska and Minnesota - two other states in the bottom 10 - was blamed on substantial declines in farm income, reflecting crop damage and uninsured losses to farm property from last year's floods.
In California, the weakness was attributed to remaining effects of the recession - which hit California the hardest of any state - plus continued cuts in the military. Income growth in the state's aircraft industry, heavily dependent on military contracts, plummeted 14.2 percent last year, the Commerce Department said.
By contrast, Montana enjoyed the fastest income growth last year, a 6.3 percent spurt in per capita income that was nearly double the national average of 3.2 percent.
The Montana gain was credited to sharp gains in the state's lumber industry, which benefited from rising prices fueled by the boom in housing construction in much of the country.
For the nation as a whole, last year's 3.2 percent increase in per capita incomes - total personal income divided by the population - represented a downward revision from an initial estimate of 3.5 percent made in April. The 1993 increase compared with per capita income growth of 4.9 percent in 1992 and 2.8 percent in 1991.
Mark Zandi, an economist at Regional Financial Associates in West Chester, Pa., said many of the top 10 states, especially in the West and Southeast, were benefiting from strong population gains.
``A lot of western states are showing good income gains because of people and businesses leaving California, while the Southeast is benefiting from continued in-migration from people leaving the Northeast,'' Zandi said.
Connecticut continued to enjoy the highest level of per capita income, $27,957, in 1993 followed by New Jersey and New York. Mississippi was at the bottom, at $14,708, followed by Arkansas and Utah.
National per capita income was $20,781 last year. ILLUSTRATION: Color graphic
State rankings
Per capita income growth for 1993, based on the percentage change
from 1992.
VIRGINIA 3.2
National Average 3.2
Top 5
Montana 6.3
New Mexico 5.2
Florida 5.2
Idaho 5.2
North Carolina 4.8
Bottom 5
North Dakota 0
Iowa 0.8
California 1.3
New Hampshire 2
Washington 2.2
KEYWORDS: INCOME GROWTH by CNB