August 9, 1997 in Nation/World

Idaho Forecast: Sunny And Bright Analysts See Steady Growth And More Jobs In State’s Future

Bob Fick Associated Press
 

Idaho’s economic explosion may be over, but the Batt administration’s new forecast projects sustainable, steady growth that should keep the state in America’s economic vanguard into the new century.

Administration analysts are even more optimistic today than three months ago about the availability of traditionally higher-paying jobs in the production of goods.

It left Gov. Phil Batt more optimistic about the state’s financial future than he has been since taking office 2-1/2 years ago.

“This good report card is built on a broad base,” the governor said. “We don’t have all of our eggs in one basket anymore, not nearly as much as we used to. By diversifying and broadening our economic foundation, we’re in a stronger position than ever.”

The resurrection from the near depression of the early and mid-1980s produced one of the strongest state economies in the nation. From 1987 through 1994, Idaho’s gross state product grew an average of 5.6 percent a year, ranking second only to Nevada’s 7 percent, according to the federal Bureau of Economic Analysis.

And, the state forecast said, “Idaho should remain near the head of the pack over the foreseeable future.”

Annual growth in the gross state product will only be half that great through 2000, but at 2.6 percent a year that is still enough to rank fifth nationally.

“The Idaho boom is history,” John Mitchell, U.S. Bank’s chief economist, said in his recent midyear review. “But developments that will support the complex of activity can be seen. The cattle market has improved, dairy is booming, chip prices have moved up and the cutbacks at the Idaho National Engineering and Environmental Laboratory may be over.”

Nonfarm employment should increase an average of 2.4 percent a year for the next 3-1/2 years - more than a full percentage point faster than job expansion nationwide, the state forecast said.

At the same time, Idaho’s average annual wage should rise 3.8 percent a year to just over $28,100 in 2000. That is a half percentage point higher than the national growth rate, and three-quarters of a percentage point higher than inflation during the same period to boost real spendable income.

The expansion of job opportunities only reflected Idaho’s attractiveness to employers. Regional Financial Associates recently rated the state 43rd nationally in the costs of doing business. Hawaii ranked first with the highest costs for labor, energy and taxes.

In nearly every sector of the economy, growth in Idaho will continue to outpace the nation’s. Even mining, which had sunk to 40 percent of its record labor force, will continue to add jobs in Idaho while payrolls decline nationally. More and more mines are regaining their economic feasibility as precious metal prices gradually rise.

The exception is timber, once the source of more high-paying jobs than any other goods-producing sector, now on a downward slide toward a record low work force of barely 13,100 people in 2000.

Housing starts projected to remain under 10,000 a year for the rest of the decade, combined with federal timber cuts dropping from half of the annual supply to less than a quarter, gave economists little reason for optimism in that industry.

The sector to perform below the national average is the one Batt has actively tried to check - state and local government. Annual increases in Idaho will run a quarter to three-quarters of a percentage point less than the national rate.

Batt’s campaign to rein in the growth of government through direct cuts on the state level and budget restrictions locally have had an impact.

In January 1994, just as the race for governor was heating up, the retiring Andrus administration projected a state and local government labor force in 1997 of just over 89,000. The new forecast put the total right now at just over 85,000.

But in holding the public payroll in check, the education system would wind up with 2,300 fewer teachers than projected 3-1/2 years ago - even as the population has been growing at two to three times the national rate.


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