Rockies Top U.S. Average in Income Growth : Economy: The figures reflect strength in manufacturing and mining, and a slowdown in defense industries in New England.

L.A. Times Archives

Jan. 24, 1990 12 AM PT

From Associated Press

WASHINGTON — Personal income growth in the Rocky Mountain region topped the national average for the first time in six years in the third quarter of 1989, while it slowed in New England, the Commerce Department reported.

The department also said the Plains states registered the fastest growth rate, 9.2%, followed by a 9.1% advance in the Far West.

The department said Rocky Mountain income in the July-September quarter grew 8.7% over the same period of 1988, compared to a national growth rate of 8.5%.

It was the first time the Rockies registered above the national average since 1983 and reflected increasing strength in manufacturing and mining, the department’s Bureau of Economic Analysis said.

At the same time, the department said income growth in New England declined during the third quarter to an 8.2% rate from an 8.6% rate in the second quarter and 9.6% in the first.

The deceleration was blamed on slowdowns in the growth of construction and service payrolls.

Joining New England with growth rates below the national average were the Mid-Atlantic region, up 8.4%; the Southeast, up 8.3%; the Southwest, up 8.2%, and the Great Lakes, up 8.1%.

And, because of the effects of Hurricane Hugo last September, South Carolina posted the first decline in any state’s non-farm personal income growth since Nebraska and North and South Dakota recorded negatives in the fourth quarter of 1988 at the end of that year’s drought.

Hurricane Hugo, which hit South Carolina the hardest, also affected income growth in neighboring states because of extensive damage to rental properties. Excluding the effects of the storm’s damage, personal income would have increased 9.4% in South Carolina and 8.9% in the Southeast region.

Rudolph E. DePass, an economist for the Bureau of Economic Analysis, said automation has replaced much of the antiquated durable manufacturing and mining infrastructure in the Rocky Mountain region, making those industries more efficient and competitive.

But, he said, New England, which in recent years had built up defense-related high-tech industries, has been hit by the slowdown in defense spending. In addition, he said, there is a shortage of skilled workers in the region because of high-priced housing.

Nevertheless, DePass said New England still has a relatively high growth rate compared to other regions.

The Plains income growth was attributed to rebounding farm income after the drought and to strong durable and non-durable manufacturing. In the Far West, the report said, growth reflected strength in manufacturing, service industries and construction.

On the other hand, in both the Great Lakes and Mid-Atlantic regions, weakness in durable and non-durable manufacturing dampened growth. Weakness in motor vehicle production in Michigan particularly affected the Great Lakes region, the report said.

The Southwest suffered slow growth in payrolls of most major industries, with advances in service industries slower than in any other region.

States with the fastest growth in personal income were: North Dakota, 16.9%; Alaska, 15.3%; South Dakota, 13.4%; Nevada, 13.3%; Washington State and Hawaii, 11.1% each; Utah, 10.6%, and Minnesota, Florida and Iowa, 10.3% each.

States with the slowest growth, in addition to South Carolina, were: Wyoming, 5.4%; West Virginia, 6%; Oklahoma, 6.8%; Arkansas, 6.9%; Michigan, 7.2%; Louisiana, 7.3%; Nebraska, 7.4%; Kansas, 7.5%, and Ohio, 7.6%.

PERSONAL INCOME GROWTH BY STATE

Percent increase from third quarter, 1988, to third quarter, 1989 *

HIGHEST

1. N. Dakota: 16.9%

2. Alaska: 15.3%

3. S. Dakota: 13.4%

4. Nevada: 13.3%

5. Washington: 11.1%

6. Hawaii: 11.1%

7. Utah: 10.6%

8. Minnesota: 10.3%

9. Florida: 10.3%