Montana State income growth twice national average

Average income in Montana climbed faster last year than in all but four other states, but still remains among the lowest in the country, the U.S. Bureau of Economic Analysis reported Tuesday.

The agency said the 4.4 percent growth in per-capita personal income in Montana from 2002 was nearly twice the national average increase of 2.3 percent. The change also improved Montana’s national income ranking from 45th to 44th, and means Montanans made 82 percent of what the typical American made during 2003.

By BOB ANEZ – Associated Press Writer

http://helenair.com/articles/2004/04/28/montana/a01042804_06.txt

However, a Montana economist cautioned that the new income figures are not necessarily reason for celebration.

Montana fares so well compared to other states only because so much of the rest of the country has been doing so poorly, said Paul Polzin, director for the Montana Bureau of Business and Economic Research.

‘‘The news may not be as good as it seems,” he said. ‘‘I suspect this is a reflection of the fact that the U.S. economy has performed dismally and the Montana economy has performed admirably.”

The growth in per-capita income, by itself, does not provide enough information to determine whether the Montana economy is actually on the mend, Polzin explained.

‘‘We don’t know whether the underlying fundamentals have improved that much and whether this is the beginning of an upward march in terms of our income rank,” he said.

For the latter to be under way, Montana would have to see a reversal of the income decline that occurred through the 1980s and 1990s, primarily due to the loss of high-paying natural resource jobs, Polzin said. And it’s too early to tell if that may be happening, he added.

But, Polzin said the increase still is noteworthy because it means Montanans saw their income go up more than twice as fast as the cost of living.

The BEA report measures personal income, which includes job earnings, dividend and interest earnings, and transfers such as Social Security and Medicare payments.

It said Montana’s average income increased from $24,831 to $25,920 last year. Only North Dakota, South Dakota, Wyoming and Nebraska had greater growth.

Polzin said that lineup isn’t surprising since all those states — like Montana — lack the manufacturing and online industries that were hardest hit in the recent recession.

The national average income was $31,632, or $5,712 more than made by the typical Montanan. Connecticut residents make the most money, an average of $43,173, and Mississippi brings up the rear with average income of $23,448.

Measured by individual industries, Montanans’ earnings were among the fastest-growing in the country last year, the BEA report showed.

Those working in the state’s robust construction industry saw earnings rise 14 percent, the biggest increase in the nation. Polzin said that mirrors the healthy job growth among construction companies as a result of federal funding fueling highway building and low interest rates sparking new housing and commercial projects.

Earnings for workers in Montana’s leisure and hospitality businesses increased 6 percent, the second highest in the nation for that industry. Natural resource and mining workers in Montana has a 5.8 percent increase in earnings, the fifth highest nationally. Professional and business services workers’ earnings rose 5.1 percent, ranking them ninth in the country.

The 3 percent decline in earnings among manufacturing workers in Montana was the 45th worst showing in that industry nationally, the BEA said.