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Idaho may see better economic times

Economist sees signs that state will recover

As the Kempthorne administration makes the final calculations on just
how bad its financial problems were in the last budget year, a regional
economist is forecasting an improving financial picture for the rest of
this year and next.

The Idaho Statesman

“Economic activity in Idaho is expected to strengthen in 2002´s second half, leading to a
conclusion of the state´s weakest performance since the 1980s,” economist Jeff Thredgold
concluded in his latest forecast.

“Idaho´s economy is expected to return to more solid growth in 2003,” he said.

Thredgold´s forecast offers the kind of outlook Gov. Dirk Kempthorne admitted he is counting
on to lift the state out of the current economic crisis without deeper spending cuts or, worse in
his view, a tax increase.

Cash previously earmarked for state building construction has already been diverted to
balance the 2001-2002 budget. Assuming June tax collections were off the 10 percent as
Kempthorne predicted, about $55 million will be needed to mop up the red ink.

Thredgold´s forecast acknowledges another drop in the state´s small business index — a
measure of economic health for the businesses that employ the vast majority of Idaho
workers. It slipped to 84.4 in June after rising well over 100 during 2000. Thredgold blamed it
on the economy´s failure to generate more jobs.

But he said it appears the job market has bottomed out, without suffering the significant
employment losses that other states have, “suggesting stabilization and better times ahead.”

The farm sector has seen improving prices, he said, and tourism activity, one of the state´s
top three revenue producers, appears to be rebounding following the slowdown last fall.

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