Northwest Leads U.S. In Personal Income Growth Farm Income, Aerospace Industry Rebound Contribute To Strong Gains

Despite some big economic hits of late, Idaho surged to the top of the nation in personal income growth in the first quarter of this year.

And right behind the Gem State came Washington, fueled by strengthening aerospace and high-tech business.

The 1-2 finish came as a pleasant surprise to economists, some of whom see the rise - at least in Idaho - to be short-lived.

“I think Idaho is going to slow down,” said John Mitchell, economist for U.S. Bancorp in Portland. Recent layoffs at Hewlett-Packard and a hiring freeze at Micron Technologies Inc. in Boise likely will put a dent in such growth for the second quarter.

Farm income, buoyed by high grain prices, helped the average Idahoan earn 3.6 percent more money than in the same three months of 1995, according to the U.S. Department of Commerce.

“Farm income is a greater percentage of the total economy in Idaho than in other states,” Mitchell said. “Plus, Idaho has seen a surge of construction compared with the same period.”

Idaho’s growth, however, was substantially below the Batt administration estimates in its latest economic forecast. State economists had expected all personal income to increase 4.8 percent from the last quarter of 1995.

In Washington, workers saw wages grow 2.7 percent in January, February and March. Montanans saw a 1.8 percent increase, good enough for 12th best in the country.

An auto strike in Michigan pulled earnings down .6 percent, putting that state last for the first quarter.

Income growth outpaced inflation in 43 of the 50 states. Personal income is described as that received by all individuals from all sources, less Social Security payments.

The West had nine of the 13 states with the fastest growing incomes, due to increases in earnings in durable goods manufacturing, retail trade, construction and farming.

Mitchell believes that Washington’s growth, unlike Idaho’s, will continue as the Seattle area continues to surge.

“Eventually that will mean spinoff business for the rest of the state as companies look for lower costs and less congestion,” he said. “The centrifuge is getting hot, and the effects will be felt.”

In the same sense, Boise’s economic health determines much of what happens in Idaho. North Idaho observers had expected the economy, especially the construction sector, to slow.

But Kootenai County, Post Falls and Coeur d’Alene construction permits and their value are both up for the second quarter compared with the same three months of 1995.

, DataTimes MEMO: This sidebar appeared with the story: HIGHER INCOMES The Northwest had the highest increase in personal income during the first quarter of 1996: Idaho - up 3.6 percent Washington - up 2.7 percent Oregon - up 2.1 percent Montana - up 1.8 percent

The following fields overflowed: CREDIT = Eric Torbenson Staff writer The Associated Press contributed to this report.